Studies: Descriptions and Formula

Study Lines (Applies to all studies)

Show - Place a check mark next to the study Line, Average, or Spread to display them on the chart, or in a selected sub-chart.
Color - Double-click on a color box to change the color of the corresponding line.
Style - Select a line style from the Style drop-down box.
Marker - Select a marker from the drop-down list to change the display of the line.
Color - The next color box changes the color of the selected marker.

Below is a description of each of the chart studies in alphabetical order.

Accumulation Swing Index

The Accumulation Swing Index (ASI) identifies the core swing movements of a market. The open, high, low, and close prices are used to calculate a swing line. The swing line often mirrors a 1 period moving average of the close. Buy or Sell the market when the ASI exceeds previous significant high or low swing points. Click the Studies button on the Chart Toolbar and then select Accumulation Swing Index to draw the study on a chart. An optional moving average of the ASI can be displayed with the study. read more »

Bollinger Bands

One of the most useful technical concepts developed in recent years is trading bands. Trading bands are lines drawn at a fixed interval around a moving average. They are widely used to determine overbought/oversold levels. Bollinger Bands are bands that vary in distance from the moving average as a function of the market's volatility. A moving standard deviation is calculated and placed above and below a moving average. A 20 period simple moving average is recommended. Click the Studies button on the Chart Toolbar and then select Bollinger Bands to draw the Bollinger Bands study on a chart.

Parameters

Multiplier 1 - Expands 1st study channel lines outward.
Multiplier 2 - Expands 2nd study channel lines outward.
Plot % Band - Place a check mark in the 'Plot % Band' check box to enable a %B Indicator. In this case, the 'Spread' study line will change to '% Band'. If you enable this Study Line then an indicator will be plotted that represents where the close price is in relation to the Upper and Lower Bands. For example, if the close is exactly in the middle of the Upper and Lower band range, then the %B Indicator will be 50.
Spread/Ave - Place a check mark in the 'Spread/Ave' box to normalize the spread value. The spread is divided by the median average line.
2nd Band - Place a check mark next to '2nd Band' to display a second band at twice the distance of the first band.
Expand Scale - Place a check mark next to 'Expand Scale' to change the chart scale when the band exceeds its range.

Bollinger Bands Calculations
Simple Moving Average = Sum of last N data points / N. This will be the middle line.
Deviation = (Price of data point - Average) ^ 2 calculated for the last N bars.
Mean Deviation = Sum of Deviations / N calculated for the last N bars.
Standard Deviation = Square Root of (Mean Deviation)
Bollinger Bands Lines = Simple moving average line plus and minus the Standard Deviation x Multiplier

How to use the Bollinger Bands Stud
Sharp moves tend to occur after the bands tighten to the average line. A move outside the bands calls for a continuation of the current trend, not an end to it. Bottoms or tops made outside the bands followed by bottoms or tops made inside the bands call for reversals in the trend. A move originating at one band tends to go all the way to the other band. This observation is useful for projecting price movements early on.

Chaikin Indicator

The Chaikin Indicator is based on the premise that Volume will flow in or out of a market shortly before a top or bottom. The Chaikin Indicator adds or subtracts a percentage of a bar's Volume to a cumulative sum. The direction of the study is more important than the actual value of the study. When the studies fail to move in the same direction as the chart prices, a divergence exists and warns of a possible reversal in the market direction. Click the Studies button on the Chart Toolbar and then select Chaikin Indicator to draw the study on a chart.

Parameters

Average - Number of N periods used in the optional moving average of the Chaikin Indicator line.

Chaikin Indicator Calculations
Chaikin = Previous Bar's Chaikin + (current Volume * (Close - ((High+Low)/2) / (High - Low))
Credit is given to Marc Chaikin for development of the Chaikin Indicator and Chaikin Oscillator. The Chaikin Oscillator can be displayed on a chart by doing a study on a study using the MACD (exponential) study on the Chaikin Indicator. A 10 period exponential average of the Chaikin Indicator is subtracted from a 3 period average of the Chaikin Indicator.

Color Band

The Color Band study is used to display bands or markers on a chart. The color and location of the bands or markers are calculated from specified Study and Trend conditions. Click the Studies button on the chart Toolbar and then select Color Band to draw the study on a chart.

The Color Band study allows you to place a marker, arrow, band, etc., on the chart to indicate the location of turning points or conditions that have been met for the selected study. The following chart positions can be selected in the properties window. read more »

Commodity Channel Index

The Commodity Channel Index (CCI) is a timing study that measures the variation of a symbol's price from its statistical mean. It is most useful for charts that follow a cyclical pattern. The CCI study can optionally plot a Moving Average of the CCI. The study can also draw Divergence, Hidden Divergence, and Trend lines on the study. Click the Studies button on the Chart Toolbar and then select Commodity Channel to plot the study on a chart. read more »

Parameters

Bars - Number of periods used in the simple moving average calculation of the CCI.
Average - Specifies the number of periods for the moving average line of the CCI.
Multiplier - Increase or Decrease the CCI multiplier. This will adjust the vertical height of the CCI lines. This value is often set to 150. Lower the multiplier to decrease the height and amplitude of the CCI lines, so that you can view CCI spikes that plot outside the study window.
Threshold - This value is used to filter the Regular and Hidden Divergences. If the CCI line is not greater than this value, then a Divergence will not be shown. A value from 150 to 200 is often used.
Regular Divergence - Place a check mark in the 'Regular Diverge' box to show Divergence Lines on the chart. Regular Divergence occurs at a high point when the Price is moving higher and the CCI is moving lower. Divergence occurs at low points when the Price is moving lower and the CCI is moving higher. The Divergence lines will plot from study peaks. Corresponding Divergence lines will be plotted on the chart bars. The 'Risingâ€¦Falling' colors for the CCI line will be used for the Divergence lines. Use the 'Threshold' parameter to filter the number of divergences that occur. If the CCI line is not greater than the 'Threshold' value, then a Divergence will not be triggered.
Hidden Divergence - Place a check mark in the 'Hidden Diverge' box to show Hidden Divergence Lines. Hidden Divergence is the opposite of Regular Divergence. Hidden Divergence occurs at a high point when the Price is moving lower and the CCI is moving higher. Hidden Divergence occurs at low points when the Price is moving higher and the CCI is moving lower. The 'Risingâ€¦Falling' colors for the CCI Average line will be used for the Hidden Divergence lines.
Trend Lines - Place a check mark in the 'Trend Lines' box to display Trend Lines on the CCI study. Trend lines will be automatically plotted from key High and Low swings on the CCI. The 'Risingâ€¦Falling' colors for the CCI Spread will be used for the Trend Line colors.
Woodies - Place a check mark in the 'Woodies' box to display the CCI study in a manner similar to that promoted in the Woodies CCI chat group. The colors and style of the study will be drawn differently. The study calculations will still be the same. The 'Average' parameter will change to the 'Trigger' parameter. This parameter is the number of bars used for the Woodie trend coloring. If the 'Trigger' parameter were set to 6, then with fewer than 6 bars the histogram would plot using the Spread Above color. At bar 5, the histogram would plot using the Spread Below color. In an Uptrend at >=6 bars, the histogram would use the Spread Above Marker color, and in a Downtrend, the color will be the Spread Below Marker color.
ZLR Levels - Place a check mark next to 'ZLR Levels' to see the Zero Line Reject levels.

Commodity Channel Index Calculation
Simple Moving Average = Sum of the last N Prices / N
Mean Deviation = Sum of last (Data Point Price -Average) / N
CCI = 150 x (Data Point Price -Simple Moving Average) / Mean Deviation

How to use the Commodity Channel Index
High CCI values indicate that current price levels are higher than normal. Low CCI values indicate that current price levels are lower than normal. Watch for the CCI line and its moving average line to cross. Also watch for divergence between the Price and the CCI. A divergence is usually followed by a correction in the market price.

Directional Movement Index

The Directional Movement Index provides an indication of how much directionality (trending) is in a market. The +DI, -DI, and Average Directional Movement Index (ADX) lines are displayed on the chart. The +DI line measures upward movement. The -DI line measures downward movement. The ADX line measures the overall trending strength of a market. The lines are scaled from 0 to 100. Click the Studies button on the Chart Toolbar and then select Directional Movement to place the study on a chart.

Parameters

Bars - Number of N periods used in the moving average calculations. A value of 14 is recommended.
Average - Normally not used (will have a value of 1). Can be used to smooth all three lines a 2nd time.

Directional Movement Index Calculations
There are multiple calculations for the Directional Movement Index study. In summary, the True Range for each bar is calculated first. If a bar is trending up then the portion of the bar's True Range that is trending up is summed over N periods. This value is divided by the sum of the True Ranges over N periods to obtain the +DI value. If a bar is trending down then the portion of the bar's True Range that is trending down is summed over N periods. This value is divided by the sum of the True Ranges over N periods to obtain the -DI value. The difference of +DI and -DI are then divided by the sum of +DI and -DI to obtain a Directional Movement Index. This value is averaged over N periods to obtain the Average Directional Movement Index (ADX) value. For a detailed formula listing refer to Welles Wilders book, New Concepts in Technical Trading Systems.

How to use the Directional Movement Index
Watch for the +DI line to cross the -DI line. Watch for markets that have the highest ADX values. Generally, markets that are trending will have an ADX value greater than 25. A +DI value of 20 means that twenty percent of the average True Range for the last N bars has been in an upward direction. A -DI value of 15 means that fifteen percent of the average True Range for the last N bars has been in an down direction.

Divergence

The Divergence study is actually a Study on a Study. A second study is needed in order for the Divergence study to work. For example, first place a Stochastics study on a chart. Then place the Divergence study on the chart. Open the Properties window for the Divergence study and select the Stochastics study to be the 'Data Point'. The Divergence study will then show on the chart all of the places where the Stochastics study is diverging from the Prices on the chart. Divergence occurs when the Price is going higher, and the Stochastics study is moving lower. Or, when the Price is moving lower, and the Stochastics study is moving higher. Lines will be drawn on the chart that show where the Divergences occur. Click the Studies button on the Chart Toolbar and then select Divergence to draw the study on a chart. read more »

Parameters

Threshold - This value is used to filter the Regular and Hidden Divergences. For example, if the Divergence study is placed on a CCI study line, then if the CCI line is not greater than the Threshold then a Divergence will not be shown. A Threshold value from 150 to 200 is often used for the CCI study. If the Divergence is placed on a Stochastic study, then use a Threshold number like 60. This will filter out any divergences that occur in the 40 to 60 range of the Stochastic value. In this case, the Threshold value will calculate up from 0 (0 + 60 = 60), and down from 100 (100 â€“ 60 = 40) to create an upper and lower Threshold range.

Study Lines

Regular Divergence - Place a check mark in the 'Regular' box to show Regular Divergence. Regular Divergence occurs at a high point when the Price is moving higher and the specified study is moving lower. Divergence occurs at low points when the Price is moving lower and the study is moving higher. The Divergence lines will plot from study peaks. Corresponding Divergence lines will be plotted on the chart bars. Use the 'Threshold' parameter to filter the number of divergences that occur. If the study value is not greater than the 'Threshold' value, then a Divergence will not be triggered.
Hidden Divergence - Place a check mark in the 'Hidden' box to show Hidden Divergence. Hidden Divergence is the opposite of Regular Divergence. Hidden Divergence occurs at a high point when the Price is moving lower and the study is moving higher. Hidden Divergence occurs at low points when the Price is moving higher and the study is moving lower.
Trend Line - Place a check mark in the 'Trend Line' box to display Trend Lines on the study. Trend lines will be automatically plotted from key High and Low swings on the study.

Donchian Channel

The Highest High and Lowest Low of the last N bars are used to draw the channels. An optional Midpoint line can also be plotted. The Donchian Channel can be used as a breakout system. When the market closes above the Donchian Channel then buy the market. When the market closes below the Donchian Channel then sell the market. This strategy works well in trending markets. If the markets are moving sideways, then reverse the strategy. Buy when the market touches the bottom channel. Sell when the market touches the top channel. Click the Studies button on the Chart Toolbar and then select Donchian Channels to draw the study on a chart.

Parameters

Upper - Enter the number of bars to test for the Highest High
Lower - Enter the number of bars to test for the Lowest Low
Plot % Band - Place a check mark in the 'Plot % Band' check box to enable a %B Indicator. In this case, the 'Spread' study line will change to '% Band'. If you enable this Study Line then an indicator will be plotted that represents where the close price is in relation to the Upper and Lower Bands. For example, if the close is exactly in the middle of the Upper and Lower band range, then the %B Indicator will be 50.
Mark NR Bars - Place a check mark in the 'Mark NR Bars' box to activate the Narrow Range Bars study. This feature will mark the narrowest range bar in the past X bars, using both the 'Upper' and 'Lower' parameter settings. The Narrow Range Bars will be indicated by the currently selected Marker. A Marker on the Upper and Lower settings can be viewed. Example, you could have a 7 NR bar marker on the upper channel and a different parameter such as 13 for the lower channel marker, simultaneously from one study.
2nd Band - Plot a second band at twice the distance.
U/D Expands - Place a check mark in the 'U/D Expands' check box to change the behavior of the 'Offset +U/D-' setting. If the box is unchecked, then all the Donchian lines will adjust up and down in the same direction. If you place a check mark in the 'U/D Expands' box, then the Upper and Lower channel lines will expand in opposite directions, when the 'Offset +U/D-' setting is changed.

Ensign Map

The Ensign Map is a timing tool developed by Howard Arrington that forecasts the price movement and Timing for the day. Watch for the market to trade along with the forecast line. The calculations for the lines are proprietary to Ensign Software. For more information on this study please visit the Ensign Software web site. Click the Studies button on the Chart Toolbar and then select Ensign Map to place the study on a chart. read more »

Parameters

Size - The Size Parameter adjusts the vertical height of the forecast lines to match the chart bars.
Invert Pattern - Place a check mark in the 'Invert Pattern' box to invert the lines (upside-down). You can also press the letter 'i' on the keyboard to invert the pattern.
Lock Shift L/R - Place a check mark in the 'Lock Shift L/R' box to prevent the study lines from shifting Left or Right when the mouse is dragged on the chart.
Show Title - Place a check mark in the 'Show Title' box to display a study title on the top row of the chart.
Equal Weights - Place a check mark in the 'Equal Weights' box to specify that each bar in the chart file be given equal weighting in the Map calculation. This is the preferred setting. Uncheck the box to give more weighting to the most recent chart file bars.

Ergodic Indicator

The Ergodic Indicator is an Average of an Average of the Net Change, divided by an Average of an Average of the Absolute Value of the Net Change. Basically, the study will display which way the market is trending. Watch for a turn in the indicator to indicate a turn in the market. Watch for Divergence between the Indicator and the price. Click the Studies button on the chart Toolbar and then select Ergodic Indicator to draw the study on a chart. read more »

Parameters

Ave1 - Number of N bars, used to calculate the first Average of the Net Change (13 is often used).
Ave2 - Number of N periods used in the Average of the Ave1 (5 is often used).
Average - Optional Average line of the Ergodic Indicator (5 is often used).

Heikin-Ashi

The Heikin-Ashi study is an average bar study. In Japanese 'Heikin' means 'Average', and 'Ashi' means 'Bar'. Some averaging formulas are used to generate a Heikin-Ashi Open, High, Low, and Close price for each bar. These prices can then be plotted as Candlesticks, Bars, or Lines. The study will mirror the bar type that a chart's main bars are formatted for. For example, if the main bars on a chart are in a Candlestick format, then the Heikin-Ashi study will display as Candles. Click the Studies button on the Chart Toolbar and then select Heikin-Ashi to place the study on a chart. read more »

Heikin Ashi Calculations
haOpen = (haOpen of Previous bar + haClose of Previous bar) / 2
haClose = (Open + High + Low + Close) / 4
haHigh = The highest price of either the High or the haOpen
haLow = The lowest price of either the Low or the haOpen

Keltner Channel

The Keltner Channel draws two band lines around a moving average line. The band distance from the moving average line is calculated based on the True Range for each bar. The True Range is averaged over N periods and then added or subtracted from the moving average line. The average True Range is multiplied by a multiplier number to adjust the band distance. The band distance will narrow if the average True Range values are small. This indicates low volatility. The band distance will increase in volatile wide ranging markets. Watch for the price to penetrate the upper or lower channels. A move outside the bands calls for a continuation of the current trend. Click the Studies button on the Chart Toolbar and then select Keltner Channel to draw the Keltner Channel study on a chart.

Parameters

Multiplier - Used to adjust the distance of the Bands from the middle line (usually a value from .5 to 2).
Average - Number of N periods used for the Moving Average (middle line).
Plot % Band - Place a check mark in the 'Plot % Band' check box to enable a %B Indicator. In this case, the 'Spread' study line will change to '% Band'. If you enable this Study Line then an indicator will be plotted that represents where the close price is in relation to the Upper and Lower Bands. For example, if the close is exactly in the middle of the Upper and Lower band range, then the %B Indicator will be 50.
Spread/Ave - Place a check mark in the 'Spread/Ave' box to normalize the spread value. The spread is divided by the median average line
2nd Band - Plot a second band at twice the distance.
Expand Scale - Place a check mark next to 'Expand Scale' to change the chart scale when the band exceeds range.

Keltner Channel Calculations
Moving average line = Select from Simple, Exponential, Weighted, or Smoothed averaging.
True Range = High or Low (Substitute the previous bar's Close for the High, if higher than the current High, and substitute the previous bar's Close for the Low, if lower than the current Low)
Average True Range (ATR) = Average of each bar's true range using N periods
Upper Channel = Moving average line + ( ATR * Multiplier)
Lower Channel = Moving average line - ( ATR * Multiplier)

MACD Oscillator

The Moving Average Convergence Divergence (MACD) study shows the relationship between two moving averages. The MACD is calculated by subtracting two moving averages. A moving average of the MACD line is then calculated, to act as a Trigger line. Watch for the MACD line and the Trigger line to cross. The study is often drawn as a Spread histogram, representing the difference between the MACD line and the Trigger line. If the MACD is displayed as a Spread histogram, watch for the histogram level to cross up or down through the zero line. Click the Studies button on the Chart Toolbar and then select MACD Oscillator to draw the study on a chart. read more »

Parameters

Ave 1 - Number of N periods used in the first moving average (a value of 5 is often used).
Ave 2 - Number of N periods used in the second moving average (a value of 35 is often used).
These 2 average lines are then subtracted from each other to produce the MACD value.
Average - Number of N periods used to average the MACD value. This is the Trigger line.
A value of 9 is often used.

MACD Calculation
Ave1 = A Moving average of the last N periods as specified by the Ave1 parameter and Data Point.
Ave2 = A Moving average of the last N periods as specified by the Ave2 parameter and Data Point.
MACD = Ave1 - Ave2
Average of MACD (Trigger) = A Moving average of the MACD for the last N periods as specified by the Average parameter. The calculation for the Trigger line will be an Exponential Moving average of the MACD, unless the 'Simple' check box is checked (then it will be a Simple Moving average).

Market Facilitation Index

The Market Facilitation Index (MFI) uses both price and volume analysis. The MFI is the ratio of the current bar's range (high-low) to the bar's volume. The efficiency of price movement is measured by comparing the current bar's MFI value to the previous bar's MFI value. If the MFI increased, then the market is facilitating trade and is more efficient, implying that the market is trending. If the MFI decreased, then the market is becoming less efficient, which may indicate a trend reversal. A moving average of the MFI line can also be displayed. Click the Studies button on the Chart Toolbar and then select Market Facilitation Index to draw the study on a chart.

Parameters

Average - Number of N periods used in the optional moving average of the MFI.

MFI Calculation
MFI = (High-Low) / Volume

Moving Average

Moving Averages are used to smooth price data and indicate a trend in the market. Two moving average lines can be displayed with each application of the study. Each average can have unique data points. Watch for the moving average lines to cross, or watch for the market to penetrate a moving average line. When two moving averages are used, the longer term average is used to indicate the trend and the short term average is used for timing purposes. Several different Moving Average calculations can be used, including: Simple, Exponential, Weighted, Smoothed, and Volume Weighted average. Click the Studies button on the Chart Toolbar and then select Moving Average to add a Moving Average study on a chart. read more »

Parameters

Ave 1 - Number of N periods used in the first moving average line.
Ave 2 - Number of N periods used in the second moving average line.
Data Points 1, 2 - A Data Point for Ave 1 and Ave 2 can be selected independently.

Moving Average Calculation
Simple = (Sum of the last N prices) / N
Exponential = Prev Bar's Ave Value + ((Current Price - Prev Bar's Ave Value) / Alpha) where Alpha = (N+1)/2
Smoothed = Prev Bar's Ave Value + ((Current Price - Prev Bar's Ave Value) / Alpha) where Alpha = N
Weighted Average - This average places emphasis on the most recent data. A 3 period weighted average will calculate as follows:

Weighted Average = ((Price * 3) + (Price1 * 2) + (Price2 * 1)) / 6
Price=Current Bar Price, Price1= Bar Price one bar ago, Price2= Bar Price two bars ago
6 is used for the divisor, and equals the total number of weights in the formula 3 + 2 + 1

Volume Weighted Moving Average (VWMA) - The Volume Weighted Moving Average
weights the price of each bar with the volume of that bar. For example, a 5-period VWMA sums the (Price x Volume) for the last 5 bars, and then divides this value with the sum of the Volumes for the 5 bars. Bars with higher volumes are weighted higher than low volume bars.

On Balance Volume

The On Balance Volume study is a running total of the Volume based on the direction of each bar. The Volume is added to the total if the current bar closes higher than the previous bar. The Volume is subtracted from the total if the bar closes down. A moving average of the On Balance Volume line can be optionally calculated to act as a trigger line. Watch for the On Balance Volume line to cross the zero level, or to cross the trigger line. The direction is more important than the actual value of the study. The study is based on the premise that Volume will flow in or out of the market shortly before a top or bottom. When the studies fail to move in the same direction as the chart prices, a divergence exists and warns of a possible reversal in the market direction. Click the Studies button on the Chart Toolbar and then select On Balance Volume to draw the study on a chart.

Parameters

Average - Number of N periods used in the optional moving average of the On Balance Volume line.

On Balance Volume Calculations
On Balance Volume = Previous Bar's On Balance Volume total + current Volume (if the bar closes higher than previous bar)
On Balance Volume = Previous Bar's On Balance Volume total - current Volume (if the bar closes lower than previous bar)
Average = Moving average of the On Balance Volume value for the last N periods

Overlays

Overlay charts can be applied to a Host chart. This allows you to look at 2 different charts in the same chart window. Overlay Charts can also be subtracted or divided to create Spread Charts and Ratio Charts. The original chart is called the 'Host' chart. An Overlay chart is placed on the Host chart just like studies are placed on a chart. The Overlay charts become 'Chart Objects' of the Host chart. The Properties of Overlay Charts, Spread Charts, and Ratio Charts can be accessed by clicking the Chart Objects button (or pressing Ctrl-O on the keyboard).

The Overlay feature is used to open two or more charts in the same chart window. Chart Overlays are used to compare relative movements between a Host chart and the Overlay charts. An Overlay chart can be customized with its own colors, chart scaling, and chart type. Each Overlay chart can also be offset up or down, or multiplied by a number to adjust the scale of the chart. The Overlay can also be inverted upside down.

To place an Overlay chart on a Host chart click the Studies button and then select 'Overlay Chart'. The 'Chart Overlay' properties window will be displayed. Type a chart filename in the 'Symbol' entry box (ex. IBM ) and then click OK. The entered chart will be overlaid on the Host chart.

The Overlay chart time frame will always be the same as the Host. For example, a Daily chart can only be overlaid with other Daily charts. Entering a filename extension (like .D for daily charts) is not necessary for the Overlay chart name since the time frame will always match the Host chart.

The Overlay chart will be synched-up with the Host chart so that each host bar has a matching Overlay bar for each time period. If bars are missing from the Overlay chart, a synthetic bar will be created to fill the time. Bars that exist in the Overlay data but not in the Host will be skipped and not displayed. In short, the Host chart is the master in which the Overlay must coincide. Since an Overlay chart is a 'Chart Object' of the Host chart, a request to remove all Chart Objects from the Host chart will also remove the Overlay.

This is an example of a chart with several overlay charts:

Bar colors and styles can be selected for each individual chart in the Overlay Properties Window. read more »

Spread Charts
A Spread Chart is created by subtracting an Overlay chart from a Host chart. Spread charts can be opened in two ways.

1) Enter Symbol--Symbol in the Charts panel (example: IBM--MSFT.D). Note: There are 2 minus signs that separate the symbols. The first symbol will be the host, the second symbol will be the overlay spread symbol. Enter the Time Frame after the 2nd symbol.

2) Add the Overlay study object to a Host chart, then specify the overlay â€˜Chart Typeâ€™. Open the Properties window for the Overlay, and then select 'Spread Line' or 'Spread Chart' from the 'Chart Type' drop-down list to cause the Overlay chart to be subtracted from the Host. For example, to display a spread chart of IBM minus MSFT, first display the IBM chart as the Host, then click the Studies button and select 'Overlay Chart'. Enter MSFT in the 'Symbol' entry box. Select 'Spread Chart' as the Chart Type and then click OK. The resulting spread calculation will be displayed on the Host chart as either a Line or as Spread Bars. Optional multipliers or price offsets can be entered in the 'Parameters' panel to adjust the value of the Host and Overlay chart data.

NOTE: The selections of 'Spread Chart' and 'Ratio Chart' will plot as bars, where open prices give a specific point for the open evaluation, close prices give the close evaluation, and then the high and low of the bars is the maximum or minimum evaluations from the pairings. This is the best reconstitution of the bar range that we can assemble after the fact from the bar history.

Ratio Charts
A Ratio Chart is created by dividing an Overlay chart into a Host chart. Select 'Ratio Line' or 'Ratio Chart' from the 'Chart Type' drop-down list to cause the Overlay chart to be divided into the Host. For example, to display a Gold and Silver ratio chart do the following. The following example divides the July 2007 Silver chart into the June 2007 Gold chart. First display the GC M7 chart as the host, then click on the Studies button and select Overlay Chart. Enter SI N7 in the 'Chart' entry box. Select 'Ratio Chart' as the Chart Type and then click OK. The resulting ratio calculation will be displayed on the Host chart as Ratio Bars. Optional multipliers or price offsets can be entered in the 'Parameters' panel to adjust the value of the Host and Overlay chart data.

Parameters

Invert Pattern - Invert the overlay chart upside down. Inverted overlays will be drawn using the 2nd color, instead of the 1st color.
Lock Shift L/R - Prevent the overlay from being dragged left or right (synched with the Host chart).
Extend Hashes - Doubles the width of the open and close hash marks on each Overlay bar.
Show Values - Display the Overlay chart values in the studies window (at the left edge of the chart).
Show Title - Display the Overlay chart symbol on the chart (top left corner).
The Parameters panel contains the following options:
Overlay - Enter a multiplier number for the Overlay chart. For example, entering a value of 10 will cause the Overlay chart to be multiplied by 10. Enter a value of 1 if no adjusting is desired.
Host - Enter a multiplier for the Host chart. For example, entering a value of 5 will cause the host chart to be multiplied by 5.

Parabolic Stop

The Parabolic Stop study is a trailing stop. As time progresses the stop accelerates towards the market prices at a specified rate. The stop moves in the direction in which the trade was initiated, regardless of the current market direction. When the data point price penetrates the stop then the position is reversed. The extreme high or low of the previous trade becomes the initial stop value. Watch for the price to penetrate the Parabolic stop line. When the price penetrates above the high stop line or below a low stop line, it indicates a possible continuation of price movement in that direction. The software will track the possible implied profit (P) in points, winning trades (W), and losing trades (L) for this study in the study values sub-window at the left edge of the chart. Click the Studies button on the Chart Toolbar and then select Parabolic Stop to place the study on a chart.

Parameters

Maximum - The Acceleration Maximum limits the acceleration of the stop value towards the market price (usually 20).
Acceleration - This value is added to the acceleration factor each period (usually 2). This increases the acceleration.
Visible Trades - Place a check mark in the 'Visible Trades' box in the properties window to display profit, winners, and losers for only the visible bars on the chart. Uncheck the box to display trade information for the entire chart.

Parabolic Stop Calculations
InitialStop = High Price (when long) or Low Price (when short)
Parabolic Stop = PreviousStop + (Acceleration Factor * (InitialStop -PreviousStop))
Acceleration Factor = Previous Acceleration Factor + Acc
(until Acceleration Factor = Acceleration Maximum)

Pesavento Patterns

To place Pesavento Patterns on a chart, click the Studies button and then select Pesavento Patterns. Ensign Windows uses pattern analysis to create the lines. Significant trend tops and bottoms are connected. A line is also drawn for the current trend swing even though it hasn't confirmed its top or bottom yet. The last swing is dynamic and can change, but eventually will become a permanent swing as the market changes directions. The lines are useful for identifying possible Elliott wave patterns and Fibonacci levels. Fibonacci Zone labels can be displayed on the chart between significant swing peaks. The Pesavento Patterns tool is totally automatic.Â Â The swings, triangles and their percentage labels, and the Fibonacci levels are drawn automatically and update in real time as bars are added to the chart and create new swings. Try to identify trends that contain 5-wave or 3-wave Elliott wave patterns. read more »

Parameters

Min Size - Enter Zero to include Swing Patterns of any size. Enter a Size amount to limit the Pattern lines to only those swings that are greater than the Size entry.
Min Bars - Enter Zero to include all Patterns. Enter minimum Bars amount to exclude all Patterns that do not include at least a minimum number of Bars
%Labels - Display Fibonacci Zone price labels on the chart. The Fibonacci Zone percentages are .382, .6, .618, .707, .786, .841, 1.0, 1.272, 1.414, 1.618, 2.0, 2.42, 2.618. If the retracement is within 4 percent of a Zone percent level, then the Zone percent level will be shown. Otherwise the Actual percent level will be shown. The labels on the Pesavento Patterns will be drawn with the following colors: The Fib Zone levels will print using the same color as the Swing lines. The Actual percent levels will print using the font color of the Chart scale prices.
Actual % - Display all Labels with the Actual retracement percent levels of each swing, rather than a Fibonacci Zone percentage.
Fibonacci 1 - Display Fibonacci retracement lines based on the current Swing.
Fibonacci 2 - Display Fibonacci retracement lines based on the 2nd and 3rd previous Higher or Lower Swings.
SR Levels - Display horizontal support and resistance lines from each Swing point.
2nd Location - Causes Markers to be plotted in an offset position (at the 2nd location) rather than the default.
Left Location - Causes Markers (like $) to be plotted to the Left of the point rather than the Right.
Auto Min Size - This box will cause the study to auto find the best fit for Min Size. This allows you to place the study on any chart and get a good pattern.
Min. Size as % - Place a check mark in this box to cause the â€˜Min Sizeâ€™ allowed to be calculated based on a percentage value rather than a price value. Example, if 2 is entered as the â€˜Min Sizeâ€™, then it will not allow any swings less than 2 percent corrections. It filters out the small swings.

Point and Figure

The Point & Figure study presents the Price movement of a chart without any regard to Time. The Point & Figure study only represent Price movement. Traditional Point & Figure charts display columns of Xs and Os. The 'X' columns represent up movements in price, the 'O' columns represent downward movements in price. Ensign Windows uses colored square boxes for the up and down columns, instead of Xs and Os. The up and down column colors can be customized. A new Box is drawn whenever the market price moves up or down by the specified Box size parameter. The Point & Figure columns denote support and resistance levels. Watch for the market to break above or below previous columns as an indication of market direction.Click the Studies button on the Chart Toolbar and then select Point & Figure to activate the study on a chart. A series of Point & Figure columns will overlay the chart.

Parameters

Box - A Point & Figure column is made up of vertically stacked boxes. Specify the size of the boxes here. Different Box sizes will be required for different charts and chart time frames. For example, a daily stock chart may work well with a Box size of 1 dollar. An E-mini S&P 5-minute chart may look best with 0.25 Box size.
Reverse - Reverse size. A new Point & Figure column is started on a chart after the market has corrected or retraced a certain number of boxes. Specify the Reverse number of boxes here. Example, if the Box size is 2 and a new column is desired after a 3 box correction, then enter 3 for this parameter. When the chart price movement corrects by $6.00 dollars ( 3 x $2.00), a new column will be started on the chart in the opposite direction. Remember, it doesn't matter how long a correction takes to occur because Time is not represented in the Point & Figure columns. A new column will only be started by a movement in Price that is equal to the Reverse criteria. By adjusting the Box and Reverse parameters, a user can control the sensitivity of the Point & Figure columns to Price movements.
Chart Range - Place a check mark in the 'Chart Range' box to plot the Point & Figure using the chart price range, otherwise the Point & Figure will auto-scale itself in the sub-window.
Right Half - Place a check mark in the 'Right Half' box to plot the Point & Figure in the right half of the sub-window
Left Half - Place a check mark in the 'Left Half' box to plot the study in the left half of the sub-window.

Predictive Average

The Predictive Average study plots a line on the chart. An optional moving average of the Predictive Average can also be plotted. The uniqueness of the Predictive average originates from its attempt to remove the lag that normal averages have. The formula calculates a moving average line, and then a moving average of the first average. The difference between the two lines is then calculated. This spread value (difference) is then added to the first line to calculate the Predictive average value. Click the Studies button on the Chart Toolbar and the select Predictive Average to apply the study on a chart.

Parameters

Predictive - Enter a moving average value. Number of N periods to use for both the first and second average in the formula.
Average - Optionally, enter a moving average value to plot a moving average of the Predictive average line.

Price Histogram

The Price Histogram study draws horizontal lines on a chart. The lines are drawn at different lengths and price levels. The length of a line represents the number of times that the market has traded at the given price level. Longer lines indicate that the market has traded many times at the given price level. Shorter lines indicate that the market has not traded many times at the given price level. Click the Studies button on the Chart Toolbar and then select Price Histogram to plot the study on a chart.

A Control Point line will mark the Longest Histogram line. Two Range Band lines will mark a specified Range of Histogram bars that extend upward or downward from the Control Point. The Price Histogram lines will be colored based on the Range% parameter. Lines that are within the Range will be colored with the 'Inner Range' color. Lines that are outside the Range will be colored with the 'Outer Range' color. Example, a Range% entry of 70 will cause the nearest 70% of the Histogram lines (to the Control Point) to be colored with the 'Inner Range' color. The other 30% will be colored with the 'Outer Range' color.

Value areas on the chart are represented by the group of long Price Histogram lines (near the Control Point). These value areas show you where the market is in balance (with equal buyers and sellers). The market price will often return to value areas. Sections of short Price Histogram lines display where the market has broken out of a value area and is moving towards a new value area. read more »

Abbreviations

PH - Price Histogram
TPO - Trade Price Opportunity
VAH - Value Area High
VAL - Value Area Low
POC - Point of Control
RTH - Real Time Hours, day session
DYO - Design Your Own study
GV - Global Variable

Parameters

Range% - Enter a percent number (like 70). The Inner Range lines will be contained within this Range of the Price Histogram. The Outer Range lines will be outside of this range. The Range Band lines will mark the specified Range% price levels.
Minutes - Enter an optional number of Minutes. If the 'Study Mode' is set to 'Minutes' then the Price Histogram will restart after the specified number of minutes. Example, an entry of 135 will cause the Price Histogram to start over every 135 minutes.
Restart - Enter an optional Restart time. If the 'Study Mode' is set to 'Restart Time' then the Price Histogram will restart at the specified Restart time. Example, an entry of 1000 will restart the Price Histogram at 10:00 AM on the chart.
Box Size - The PH can control the box size in points, which if zero, will use the default tick size. But with a value entered, you can force a larger or smaller box size than would be the default.
Initial % - Controls the size of the 2 additional bands drawn above and below the Initial Range. The entry of 50 would then draw a band of 2nd color from 100% to 150% and a 3rd color from 150% to 200%, and the image repeated below the Initial Range, with 2nd color from 0% to -50% and 3rd color from -50% to -100%.Â

Study Mode

24 H Globex - Combines both sessions with a boundary on the Globex open.
24 H RTH Open - Shows a boundary on the day session open time.
Globex & RTH- Shows a Price Histogram on each of the session opens.
Visible Bars - Makes one histogram for all bars present in the chart view.
Minutes - Restart on either session open time, and the duration of the histogram is the Minutes parameter, such as 120 for a 2 hour histogram.
Restart Time - This selection will restart a new Price Histogram at the specified 'Restart' time.
Two Day - Causes the PH to start at the beginning of yesterday on which the price action of today is added.
Three Day - Shows two prior days plus today in the PH.

In addition to the standard properties, the Price Histogram Properties window has the following selections:

Extend Bands - Place a check mark in the 'Extend Bands' box to extend the length of the Range Bands and Control Point lines from prior Price Histogram groups.
Plot Leftward - Place a check in the 'Plot Leftward' box to plot the Price Histogram lines to the left (instead of to the right).
Extend POCs - Plots all the Control Point lines to the right edge of the chart.
Virgin POCs - Plots to the right edge all Control Points that have not been retraced upon.
Show all POCs - Show all Control Points from the beginning of the chart.
High and Low - Show the session High and Low above the top of the PH and bottom of the PH.
TPO Counts - The TPO counts show on the same location above and below the PH following the High and Low prices.
CQG Method - The CQG method check box is used to select either the eSignal method of the CQG method for calculating the Value Area.Â These are theÂ two methods most widely used for calculating POC, VAH, andÂ VAL. Â They are similar, yet have some slight differences in calculating the value area in how they handle TPO counts that are equal.Â This a private property which permits either method to be used with histograms on any chart. To use the eSignal method leave the box unchecked.

Positive or Negative Volume Index

The Positive Volume Index (PVI) and Negative Volume Index (NVI) are used to identify bull and bear markets. PVI is based on the assumption that uninformed traders dominate trading on active (high volume) days. NVI assumes that smart money dominates trading on quiet (low volume) days. The author of these studies, Norman Fosback, maintains that there is a 67% probability of a bear market when PVI is below its 1 year moving average. The probability drops to 21% when PVI is above the moving average.

Interpretation of the PVI and NVI assumes that on days when volume increases, the crowd-following uninformed investors are in the market. Conversely, on days with decreased volume, the smart money is quietly taking positions. The NVI displays what the smart money is doing. Note: The PVI is not a contrarian indicator. Even though the PVI is supposed to show what the not-so-smart-money is doing, it still trends in the same direction as prices.

Click the Studies button on the Chart Toolbar and then selectÂ PVI or NVI Volume IndexÂ to display the study on a chart. The Properties window allows you to customize the PVI chart.

Parameters

AVG - Number of N periods used in the optional moving average.
Formula - Select either 'Pos. Vol' or 'Neg. Vol' to choose a PVI or NVI chart display.

Rainbow Histogram

The Rainbow Histogram study uses coloring to visually show the volume at each price (how many shares or contracts were traded). Red represents the hottest trading (highest volume). Blue represents the lowest volume areas. This study allows you to easily determine high and low volume areas on the chart by looking at the Rainbow coloring.

As the market moves forward through time, the coloring will cool off (since the effect of a past high volume area has less and less impact on the market). The rate of the cooling can be controlled with a Decay percent parameter (a decay value of 3 to 5 percent is recommended).

The Rainbow Histogram can be plotted as solid lines (solid flame) or single lines. A Threshold parameter allows you to limit how much Rainbow coloring will be plotted on the chart. For example, a higher Threshold value will cause the study to stop plotting low volume areas and only plot hot areas.

Click the Studies button the Chart Toolbar and then select Rainbow Histogram to apply the study on a chart.

Parameters

Decay - Enter a percent number (like 3 or 5) to change the decay rate of the Rainbow coloring. A higher decay value will cause the hot areas to cool off quicker.
Threshold - Optionally, enter a Threshold value to limit the plotting of the Rainbow colors. For example, a value of 7 could cause the study to only plot hot and warm areas.
Cover Image - Place a check mark in the 'Cover Image' box to cause the study to plot completely on top of the chart bars.
Solid Flame - Place a check mark in the 'Solid Flame' box to cause the study to plot with solid horizontal coloring. Uncheck the box to plot single horizontal color lines.
Hide Image - Place a check mark in the 'Hide Image' box to hide the Rainbow study.

Rate of Change

The Rate of Change (ROC) study calculates and displays the 'Percentage' change between two bars. A percentage is calculated from the bar N bars ago to the current bar. This number is plotted around a zero line. An optional moving average of the ROC can also be displayed. The trading direction of a market often changes when the ROC line crosses the zero level. Watch for the ROC line to cross the zero level, or to cross its moving average line. Click the Studies button on the Chart Toolbar and then select Rate of Change to draw the study on a chart.

Click the chart objects button on the toolbar, then select Rate of Change and click Properties to customize the chart.

Parameters

Bars - Number of bars used to compare the price N bars ago with the current bar's price.
Average - Number of N periods used in the optional moving average of the study line.
Spread - Select 'Left', 'Center', or 'Right' to shift the spread histogram lines one pixel to the left or right on the chart. This may be desirable if the histogram lines overlay and hide chart bars.

Regression Channel

The Regression Channel study calculates a regression point for each bar on the chart. The 'Least Squares' method is used to calculate the regression points. The regression points are connected and an optional channel is drawn on both sides of the regression line. The distance between the regression line and the channel lines can be a Percentage distance or a Standard Deviation distance. When the price penetrates the upper channel, the market will often continue in that direction. When the price penetrates the lower channel, the market will often continue in that direction. A move outside the bands calls for a continuation of the current trend. If the channel lines are not visible on the chart, then decrease the 'Percent' parameter entered. The channels will be drawn off the top and bottom of the chart if the Percent Parameter is too large for the chart time frame and price scale. read more »

Click the Studies button on the Chart Toolbar and then select Regression Channel to draw the Regression Channel study on a chart.

Parameters

Percent - Multiplied with the regression line to determine the channel distance. A value between .05 and 5 is normally used, depending on the chart time frame and price scale.
Bars - Number of bars used in the regression line formula.
Spread - Select 'Left', 'Center', or 'Right' to shift the spread histogram lines one pixel to the left or right on the chart. This may be desirable if the histogram lines overlay and hide chart bars.
Plot % Band - Place a check mark in the 'Plot % Band' check box to enable a %B Indicator. In this case, the 'Spread' study line will change to '% Band'. If you enable this Study Line then an indicator will be plotted that represents where the close price is in relation to the Upper and Lower Bands. For example, if the close is exactly in the middle of the Upper and Lower band range, then the %B Indicator will be 50.\
2nd Band - Place a check mark next to '2nd Band' to display a second band at twice the distance.
r-Squared - Place a check mark next to 'r-Saquared' to change the chart scale when the band esceeds range.
Plot Slope (LRS) - Place a check mark in the 'Plot Slope (LRS)â€™ box to plot the Linear Regression Slope instead of the actual Regression lines.
Standard Dev - Place a check mark in the 'Std. Dev.' box to calculate the distance between the Regression line and the Channel lines based on the Standard Deviation. For example, an entry of 2 in the 'Multiplier' parameter box will draw channel lines at a distance of 2 Standard Deviations from the regression line.

Regression Channel Calculations
The regression line uses the least squares method to calculate a data point for each bar.
N = Number of bars in each sample
X = Bar Index from 1 to N
Y = Data Point price at Bar(X)
Slope = (N * Sum(X*Y) - Sum(X)*Sum(Y)) / (N*Sum(X^2) - Sum(X)^2)
Regression Price = (Sum(Y) - slope * Sum(X)) / N
Upper Channel = Regression price + (Current Data Point Price * Percent entry)
Lower Channel = Regression price - (Current Data Point Price * Percent entry)

Relative Strength

The Relative Strength Index (RSI) is used to measure overbought and oversold conditions. The RSI is calculated from the Net Change of each bar. The average Up Net Changes and the average Down Net Changes are used to calculate an Index from 0-100. An optional moving average of the RSI line can be calculated and displayed to act as a trigger line. RSI values above 80 indicate a possible overbought market condition and that a reversal or correction in the market is possible. RSI values below 20 indicate a possible oversold market condition. Click the Studies button on the Chart Toolbar and then select Relative Strength to draw the study on a chart. read more »

Parameters

Bars - Number of bars used to calculate the up closes and down closes for the last N bars (14 is often used).
Average - Number of periods used in the optional moving average of the RSI line.
Fisher Transform - Place a check mark in the 'Fisher Transform' box to stretch the scale of the RSI. The formation doesn't change but the values will be exaggerated.
2nd RSI Line - Place a check mark in the '2nd RSI Line' box to cause the average line to calculate an independent 2nd RSI, rather than an Average of the 1st RSI. This allows you to display 2 RSI lines with different BARS parameters.
Spread - Select 'Left', 'Center', or 'Right' to shift the spread histogram lines one pixel to the left or right on the chart. This may be desirable if the histogram lines overlay and hide charts.

Relative Strength Index Calculations
RS = AverageUpNetChanges / AverageDownNetChanges
RSI = 100 - ( 100 / (1 + RS))
Moving Average of RSI = Moving average of the RSI value for the last N periods

Stochastic

The Stochastics study calculates a value between 0 and 100 which represents the relation of the Current price to the highest high and lowest low of the last N bars. For example, if N is equal to 10 then the Current price is compared to the high low price range of the last 10 bars. The Stochastics value will be 100 if the Current price is equal to the highest high of the last 10 bars. The Stochastics value will be 0 if the Current price is equal to the lowest low of the last 10 bars. The Stochastics value will be 50 if the Current price is exactly in the middle of the price range of the last 10 bars. The Raw Stochastics value is often called Fast %K. A moving average of the Fast %K value is calculated to obtain a smoother value. The smoothed value is called both Fast %D or Slow %K. A moving average of Slow %K is calculated to obtain a 2nd smoothed value. This value is called Slow %D.

In summary, the initial stochastics value (Fast %K) is averaged twice to obtain the Slow %K and Slow %D values. These values are then plotted on the chart. Stochastic values above 80 indicate a possible overbought condition. Values below 20 indicate a possible oversold condition. Watch for divergence between the %D line and the price. A divergence occurs when the %D value starts to go up while the price of the bars is still going down. When a divergence occurs, a possible trigger is the %K crossing the %D line. Click the Studies button on the Chart Toolbar and then select Stochastics to draw the study on a chart. read more »

Parameters

Bars - Number of bars to use in the calculation. For example, an entry of 10 will determine the price range of the last 10 bars (highest High - lowest Low). Increase N to include more bars in the high low range. Decrease N to include fewer bars in the high low range.
%K - Moving average value for the 1st smoothing. A value of 3 calculates a 3 period average of the Fast %K value. An entry of 1 will plot the Fast %K line with no smoothing. Any entry greater than 1 outputs a Slow %K value.
%D - Moving average value for the 2nd smoothing. A value of 5 calculates a 5 period average of the %K value. If the entry for %K is 1, then the output for the %D entry will be Fast %D. If the %K entry is greater than 1, then the %D averaging will output a Slow %D value. See the Stochastics Calculations below for further clarification.
Location - A study can be plotted directly on the chart or in one of nine sub-windows. Select the location from the drop-down box.
Formula - The moving averages can be calculated in different ways by selecting formulas from the drop-down box.
Spread - Select 'Left', 'Center', or 'Right' to shift the spread histogram lines one pixel to the left or right on the chart. This may be desirable if the histogram lines overlay and hide charts.

Stochastic Calculations
Fast %K = 100 * (C -LL) / (HH -LL) where C = close of the current bar
Fast %D = moving average of Fast %K LL = lowest low for the last N bars
Slow %K = Fast %D HH = highest high for the last N bars.
Slow %D = moving average of Slow %K

Stochastic Momentum Index

The Stochastic Momentum Index was developed by William Blau. While the regular Stochastics study displays a value showing relation between the current close and a high/low range, the SMI shows you where the close is relative to the Midpoint of the recent high/low range. The result is an oscillator that ranges between +/- 100 and is a bit less erratic than an equal period Stochastic study.

Parameters

Bars - Number of bars to use in the calculation. For example, an entry of 10 will determine the MidPoint of the price range of the last 10 bars (highest High - lowest Low). Increase N to include more bars in the high low range. Decrease N to include fewer bars in the high low range.
Ave 1 - Specifies a moving average period for the Spread of the Close to the Bar Midpoint.
Ave 2 - Specifies a moving average period for the High-Low bar range.
Average - A moving average of the SMI line. Normally, an Exponential Moving average. Place a check mark in the 'Simple' box to calculate the 'Average' using a Simple average formula.
Formula - The moving averages can be calculated in different ways by selecting formulas from the drop-down box.
Spread - Select 'Left', 'Center', or 'Right' to shift the spread histogram lines one pixel to the left or right on the chart. This may be desirable if the histogram lines overlay and hide charts.
% Scale - Place a check mark in the ' % Scale' box to plot the study on a 0 to 100 scale.

Three Point Break

The Three Point Break Study looks similar to the Point & Figure study. Colored square boxes are used to draw up and down columns. A new up column is added if the previous high price is exceeded by the current price. If there is neither a new high or low, nothing is drawn. If a rally is strong enough to form three consecutive up columns, then the low of the last three up columns must be exceeded before a down column is drawn. If a sell-off is strong enough to form three consecutive down columns, then the high of the last three down columns must be exceeded before an up column is drawn. The columns represent support and resistance levels. Watch for the market to break above or below previous columns as an indication of market direction.

Click the Studies button on the Chart Toolbar and then select Three Point Break to activate the study on a chart. A series of columns will overlay the chart. If desired, hide the chart bars by selecting Show | Chart Bars from the pop-up menu if desired (or pressing Ctrl-X on the keyboard).

Parameters

Reverse - The Three Point Break uses this parameter to determine how many columns will trigger a reverse condition. The suggested default is 3.
Location - A study can be plotted directly on the chart or in one of nine sub-windows. Select the location from the drop-down box.
Chart Range - If the study is plotted in a sub-window, then the 'Chart Range', 'Right Half', and 'Left Half' options can be used. Place a check mark in the 'Chart Range' box to draw the study using the chart price ranges, otherwise the study will auto-scale itself.
Right Half - Place a check mark in the 'Right Half' box to draw the study in only the right half of the sub-window. This allows you to place one study in the right half and one study in the left half of the same sub-window.
Left Half - Place a check mark in the 'Left Half' box to draw the study in the left half of the sub-window.
Reset Daily - Place a check mark in the 'Reset Daily' box to cause the study to reset at the beginning of each trading day.

Trailing Stop

The Trailing Stop study applies a trailing stop to a chart. When the position is Long and a new Higher high bar is made, the Trailing stop value does not move. Otherwise the Trailing stop value is moved to the Lowest price of the last N bars minus a slack distance. When the position is Short and a new Lower low bar is made, the Trailing stop value does not move. Otherwise the Trailing stop value is moved to the Highest price of the last N bars plus a slack distance. The Slack distance is equal to the smallest (High-Low) bar range of the N most recent bars. The study is used to keep traders in their trades. Positions are exited or reversed when the stop is penetrated. To place the Trailing Stop study on a chart, click the Studies button and then select Trailing Stop.

Parameters

Bars - Indicates the number of N bars to use in the stop calculation.
Location - A study can be plotted directly on the chart or in one of nine sub-windows. Select the location from the drop-down box.
Visible Trades - Place a check mark in the 'Visible Trades' box to show only the trades that are currently visible on the chart.

How to Use
Increase the 'Bars' parameter value to make the stop less sensitive. Decrease the 'Bars' parameter value to tighten the stop values. Watch for the price to penetrate the Trailing Stop lines. Price penetration above or below the stop line indicates a possible continuation of the market in the same direction. The software will track the implied profit (P) in points, winning trades (W), and losing trades (L) for this study in the study values sub-window at the left edge of the chart.

Triple Average

The Triple Average study does exactly what the name implies. The study calculates an Average of an Average of an Average. Three lines can be plotted on the chart. The lines can be calculated using any of the 10 average formulas.

Parameters

Ave 1 - Specifies a moving average period for the first line.
Ave 2 - Specifies a moving average period for the second line.
Ave 3 - Specifies a moving average period for the third line.
Location - A study can be plotted directly on the chart or in one of nine sub-windows. Select the location from the drop-down box.
Data Point - This study can be calculated from one of several data point prices selected from the drop down menu.

Trix Oscillator

The Trix Oscillator displays the percent rate of change of a triple moving average. The study is designed to keep you in trends. The Trix indicator oscillates around a zero line. The triple averaging filters out insignificant moves. Trades should be placed when the indicator changes directions. Divergence between the Trix and the market price can also help identify turning points.

Parameters

Ave 1 - Specifies a moving average period for the first line calculation.Â Select the formula for the triple averages from the drop-down box.
Ave 2 - Specifies a moving average period for the second line calculation.
Ave 3 - Specifies a moving average period for the third line calculation. A Percent Rate of Change is calculated from this value.
Average - The moving average can be calculated in different ways by selecting formulas from the drop-down box.

Ultimate Oscillator

The Ultimate Oscillator was developed by Larry Williams. This study uses the sums of three oscillators, each using a different time parameter. The study is used to show buying or selling pressure. Study values range from 0 to 100. The market is considered overbought if the oscillator is greater than 70, and oversold if less than 30. Three time frame parameters are used by the study and can be customized. Typical values are 7, 14, and 28. Click the Studies button on the Chart Toolbar and then select Ultimate Oscillator to plot the study on a chart.

Parameters

Period 1 - Specifies a time period for the first calculation.
Period 2 - Specifies a time period for the second calculation.
Period 3 - Specifies a time period for the third calculation.
Average - The moving average can be calculated in different ways by selecting formulas from the drop-down box.

Uniform Channel

The Uniform Channel study is used to display 2 channel lines on either side of a Moving Average line. The distance between the channel lines and the Moving Average is a percentage. Watch for the price to penetrate the upper or lower channel. A move outside the bands calls for a possible continuation of the current trend. If the channel lines are not visible on the chart, then decrease the 'Percent' parameter. The channels will be drawn off the top and bottom of the chart if the 'Percent' parameter is too large. Click the Studies button on the Chart Toolbar and then select Uniform Channel to draw the Uniform Channel study on a chart.

Parameters

Percent 1 - Multiplied with the Moving Average to determine the channel distance from the moving average line. A value between .05 and 5 is normally used, depending on the chart time frame and price scale.
Percent 2 - Multiplied with the Moving Average to determine the channel distance from the moving average line. A value between .05 and 5 is normally used, depending on the chart time frame and price scale.
Plot % Band - Place a check mark in the 'Plot % Band' check box to enable a %B Indicator. In this case, the 'Spread' study line will change to '% Band'. If you enable this Study Line then an indicator will be plotted that represents where the close price is in relation to the Upper and Lower Bands. For example, if the close is exactly in the middle of the Upper and Lower band range, then the %B Indicator will be 50.
Spread/Ave - Place a check mark in the 'Spread/Ave' box to normalize the spread value. The spread is divided by the median average line.
2nd Band - Place a check mark next to '2nd Band' to display a second band at twice the distance.
Expand Scale - Place a check mark next to 'Expand Scale' to automatically change the chart scale when the band exceeds its range.

Uniform Channel Calculations
Upper Channel = Moving average line + (Current Data Point Price * Percent entry)
Lower Channel = Moving average line - (Current Data Point Price * Percent entry)

Volatility Stop

The Volatility Stop is a trading system that reverses its position whenever the chart price penetrates the stop line. The average true range is multiplied by a specified value and then added to the lowest close (since entering the trade) while short, or subtracted from the highest close (since entering the trade) while long. The study also calculates the profit (P) in points, winning trades (W), and losing trades (L). These values are displayed in the study window (left edge of the chart). Click the Studies button on the Chart Toolbar and then select Volatility Stop to place the study on a chart.

Parameters

Bars - Specifies the number of Bars to use in the Average True Range calculation.
Multiplier - This value adjusts the sensitivity of the study. Increase the value to widen the stop.
Visible Trades - Place a check mark in the 'Visible Trades' box in the properties window to display profit, winners, and losers for only the visible bars on the chart. Uncheck the box to display trade information for the entire chart.

Volatility Stop Calculations
True Range = High - Low
(Substitute the previous bar's Close for the High, if higher than the current High.)
(Substitute the previous bar's Close for the Low, if lower than the current Low.)
Average True Range (ATR) = Exponential moving average of each bar's true range using N periods.
Volatility Stop (when short) = Lowest Close (since entering the trade) + (ATR * Multiplier)
Volatility Stop (when long) = Highest Close (since entering the trade) - (ATR * Multiplier)

VWAP Bands

VWAP is a trading acronym for Volume-Weighted Average Price, the ratio of the value traded to total volume traded over a particular time horizon (usually one day). It is a measure of the average price traded at over the trading horizon.

The aim of using a VWAP trading target is to ensure that the trader executing the order does so in-line with volume on the market. Ensign's VWAP is measured across a day from the evening session open through the day session close. The VWAP can be shown with Standard Deviation bands based on the distance of the price from the VWAP. The Multiplier parameter can be used to space the bands. read more »

Parameters

Multiplier 1 - Increase the value to widen the band outwards.
Multiplier 2 - Increase the value to widen the band inwards.
Plot % Band - Place a check mark next to 'Plot % Band' to enable a percent band instead of a spread.
Spread/Ave - Place a check mark in the 'Spread/Ave' box to normalize the spread value. The spread is divided by the median average line.
2nd Band - Place a check mark next to '2nd Band' to display a second band at twice the distance.
Restart @ DSO - Place a check mark next to 'Restart DSO' to automatically restart calculations at the Day Session Open.

William's %R

The William's %R study is used to display possible overbought and oversold areas. The study value represents the location of the current price (in percent), in relation to the highest high and lowest low price range of the last N bars. If N=10, the current price is compared to the high low price range of the last 10 bars. A current price equal to the highest high of the last 10 bars will have a %R value of 0. A current price equal to the lowest low of the last 10 bars will have a %R value of 100. A current price exactly in the middle of the price range of the last 10 bars will have a %R value of 50. This value is called the raw %R. A moving average of the %R value can be calculated to obtain a smoother value. Click the Studies button on the Chart Toolbar and then select William's %R to activate the Larry William's %R study on a chart.

Parameters

Bars - Value of N bars. An entry of 10 will determine the price range of the last 10 bars (highest High - lowest Low). Increase N to include more bars in the high low range. Decrease N to include fewer bars in the high low range.
%R - An entry of 1 is recommended for this box. A value greater than 1 will average the %R line. For example, an entry of 3 will calculate a 3 period average of the raw %R value.
Average - An optional average of the %R line. An entry of 1 is recommended.