Accumulation Distribution Line

: A momentum indicator that attemptsto gauge supply and

demand by determining whether investors are generally accumulating(buying) or
distributing (selling) a certain stock by identifying divergences between stock price and
volumeflow.Itiscalculatedusingfollowingformula:

Acc/Dist=((closelow)(highclose))/(highlow)*periodsvolume.

For example, many up days occurring with high volume in a downtrendcould signalthat the
demand for the underlying is starting to increase. In practice, this indicator is used to find
situations in which the indicator is heading in the opposite direction as the price. Once this
divergence hasbeenidentified,thetraderwillwaittoconfirmthereversalandmakehisorher
transaction.

Advance /Decline Ratio: Amarket breadth indicator used in technical analysisto compare
the number of stocks thatclosedhigherwiththenumberofstocksthatclosedlowerthantheir
previous days closing prices. To calculate the advance/decline ratio, divide the number of
advancing shares by the number of declining shares. The A/D ratio can be calculated for
varioustimeperiods,suchasoneday,oneweekoronemonth.

Investors can compare the moving average of the A/D ratio to the performance of a market
index such as NYSEorNasdaqtoseewhetheroverall marketperformanceisbeingdrivenby
a minority of companies. This comparison can provide perspective on the cause of an
apparent rally or selloff. Also, a lowA/Dratio can indicate an oversold market, while ahigh
A/D ratio can indicate an overbought market.Thus,theA/Dratiocanprovideasignalthatthe
marketisaboutchangedirections.

Arms Index TRIN : A technical analysis indicator that compares advancing and declining
stock issues andtrading volume asan indicator of overall market sentiment. Thearmsindex
or
TRIN (
TR
aders IN
dex), is used as a predictor of future price movements in the market
primarilyonanintradaybasis.

TheArmsindexiscalculatedasfollows:

TRIN
:(advancingissues/decliningissues)
(volumeofadvancingissues/volumeofdecliningissues)

An Arms index value above one is bearish, a value below oneis bullish and a value of one
indicates a balanced market. Traderslooknotonlyat thevalueoftheindex,butalsoathowit
changes throughout the data. Traders look for extremes in theindex value for signs that the
marketmaysoonchangedirections.

Aroon Indicator : A technical indicator used for identifying trends in an underlying security
and the likelihood that the trends will reverse. It is made up of two lines : one lineis called
Aroon up, which measures the strength of the uptrend, andthe otherline is called Aroon
down, which measures the downtrend. The indicator reports the timeitistakingfortheprice
to reach, from a starting point, the highest and lowest points over a giventime period, each
reportedasapercentageoftotaltime.

Both the Aroon up and the Aroon down fluctuate betweenzero and 100,withvaluescloseto
100 indicating a strong trend, and zero indicating a weak trend. The lower the Aroon up, the
weaker the uptrend and the stronger the downtrend, and vice versa. The main assumption
underlying this indicator is that stocks price will close at records highs in an uptrend, and
recordlowsinadowntrend.

This indicator is very similar to the directional movement index (DMI), which is also a very
popularindicatorusedtomeasurethestrengthofagiventrend.

Average Directional Index : The averagedirectionalindex(ADX)isatrend indicatorusedto

measure the strength and momentum of an existing trend. This indicators main focus isnot
the direction of the trend, but with the momentum. When the ADX is above 40, the trend is
considered to have a lotof directional strength either up or down,dependingonthecurrent
direction of the trend. Extreme readings to the upside are considered to be quite rare
compared to low reading. When the ADX indicator is below 20, the trend is consideredtobe
weakornontrending.

Bollinger Band : A band plotted two standard deviations away from a simple moving
average.

In this example of bollinger bands, the price of the stock is banded by an upper and lower
bandalongwitha21daysimplemovingaverage.

Because standard deviation is a measure of volatility, bollinger bands adjust themselves to

the market conditions. When the markets become more volatile, the bands widen (move
further away from the average), and during less volatile periods, the bands contract (move

closer to the average). The tightening of the bands is often usedby technical traders as an
earlyindicationthatthevolatilityisabouttoincreasesharply.

This is one of themost popular technical analysis techniques. Thecloserthepricesmoveto

the upper band, themore overbought themarket,andthecloserthepricesmovetothelower
band,themoreoversoldthemarket.

Band Envelope : A type of technical indicator typically formed by two moving averages that
define upper and lower price range levels. An envelope is a technical indicator used by
investors andtraderstohelpidentifyextremeoverboughtandoversoldconditionsinamarket.
The envelopes, which typically appear overlaid on a price chart, are alsousefulinidentifying
tradingrangesforaparticulartradinginstrument.

A moving average envelope calculates two moving averages using the high price and low
price inputs. Bothaverages are calculatedusingpricedatafromthesamenumberofbars,as
determined by the input length. Theaverageofthehighpriceisincreasedbyauserspecified
percent and then plotted. The envelope inputs can be customized to suit each investors or
tradersstyleandpreferences.

While traders may interpret and apply the information in unique ways,many traders use an
envelope so that a sell signal occurs when price reaches the upper band, signifying an
overbought market, and abuysignaloccurswhenpricedropstothelowerband,representing
an oversold market. Since a trading instruments price tends to stay within the range
represented by an envelope, the theory is that prices will continue to bounce between the
upperandlowerthresholds.

Intraday Momentum Index (IMI)

: A technical indicator that combines aspects of candlestick
analysis with relative strength index (RSI). The intraday momentum index, or IMI, provides
investors with potential buying and selling days based off of signals created on individuals
days.

Investors use technical indicators to estimate when a stock should be bought or sold.
Technical analysis,which usestechnical indicators, examines the relationshipbetweenstock
price and volume over varied periods of time. Indicators, such as the relative strength index
and Bollinger bands, seek to identify buy and sell signals without examining a stock's
fundamentals. As such,they aregenerally considered moreusefulforshorttermtradersthan
longterminvestors.

The intraday momentum index looks at the relationship between a stocks open and close
price over the courseof the day, rather thanhowtheopen/ closeorcevariesbetweendays.
It combines some features of the relative strength index, namely therelationshipbetweenup
closes and down closes and whether there is an indication that as stock is overbought or
oversold, with candlestick charts. Candlestick charts for a given day contain a real body
highlighting the gap between the open andcloseprice,andpricepointsabovetheheightand
lowcalledupperandlowershadows.

Technical investors can use the IMI to anticipate when a stock is overbought . The IMI is
calculated as the sumof up days divided by the sum of up days plus the sumofdowndays,
or ISup / ( ISup + IS down). This is then multiplied by 100. If the resulting number is greater
than 70 the stock isconsidered overbought, while a figure less than30meansthatastockis
oversold. The Investor will look at the IMIover a period of days, with14 daysbeingthemost
commontimeframetolookat.

Chaikin Volatility or Chaikin Oscillator : An oscillator which measures the accumulation

distribution line of the MACD. The chaikin Oscillator is calculated by subtracting a 10 day
EMA from a 3 day EMA of the accumulation distribution line, and outlines the momentum
impliedbytheaccumulationdistributionline.

The goal of thechaikin lineis to recognize moving momentum levels withintheMACD,more

specifically the accumulation distribution line, in hopes of being able to act on said
momentum. By being able to recognize momentum, technical traders hope that the
momentumisthefirststepinthedevelopmentofatrendthattheycancapitalizeupon.

Chande Momentum Oscillator : It is createdby calculating the difference between thesum

of all recent gains and the sum of all recent losses and then dividingtheresultbythesumof
all price movement over the period. This oscillator is similar to other momentum indicators
such as theRelativeStrengthIndexandthestochastic Oscillatorbecauseitisrangebounded
(+100and100).

Commodity Channel Index (CCI) : An oscillator used in technical analysis to help determine
when an investment vehicle has been overbought and oversold. The commodity channel
index, quantifies the relationship between the assets price, a moving average (MA) of the
assets price, and normal deviations (D) from that average. It is computed with the following
formula.

TheCCIhasseensubstantialgrowthinpopularityamongsttechnicalinvestorstodaystraders
often use the indicator todetermine cyclical trends in not only commodities, butalsoequities
andcurrencies.

The CCI, when used in conjunction with other oscillators, can be a valuable tool to identify
potential peaks and valleys in the assets price, and thus provide investors with reasonable
evidencetoestimatechangesinthedirectionofpricemovementoftheasset.

Detrended Price Oscillator (DPO) : An oscillator that strips out price trends in an effort to
estimate the length of price cycles from peak to peak, or trough to trough. Unlike other
oscillators such as the stochastic or MACD, detrended price is not a momentum indicator. It
highlights peaks and troughs in price, which are used to estimateentryandexitpointsinline
withthehistoricalcycle.

Calculation:Price(X/2+1)periodsagominusXperiodsimplemovingaverage
whereXisthenumberofperiods20or30periodsincommon.


The cycles are created because the indicator is displaced back in time. The chart below
shows the indicator does not appear at the far right of thechart, and is therefore not a real
time indicator. The historical peaks and troughsintheindicator provideapproximatewindows
of time when it is favorable to look for entries and exits, based on other indicators or
strategies.

In above example, stock in Armonk, NYSE : IBM is bottoming approximately every1.5to2.0

months. Upon noticing the cycle, look for buy signals that alignwiththistimeframe.Peaksin
price are occurring every1.0 to 1.5 monthslook for sell/shortening thesignals thatalignwith
thecycle.

Average Directional Index ADX

: An indicator used in technical analysis as an objective
value for the strength of the trend. ADX is nondirectional so it willquantify atrendsstrength
regardless of whetheritisupordown.ADXisusuallyplottedinachartwindowalongwithtwo
lines known as the
DMI ( Directional Movement Indicators
). ADX is derived from the
relationshipoftheDMIlines.

Analysis of ADX is a method ofevaluatingtrendand canhelptraderstochoosethestrongest

trendsandalsohowtoletprofitsrunwhenthetrendisstrong.

Divergence :
When the price of anasset and anindicator,indexorotherrelatedassetmove
in opposite directions. In technical analysis, traders make transactiondecisionsbyidentifying
situation ofdivergence,wherethepriceofastockandasetofrelevantindicators,suchasthe
moneyflowindex(MFI),aremovinginoppositedirections.

In technical analysis, divergence is considered either positive or negative, both of which are
signals of majorshiftinthedirectionoftheprice.Positivedivergenceoccurswhenthepriceof
a security make a new high, but the indicator fails to do the same and instead closes lower
thantheprevioushigh.

Donchian Channels : A moving average indicator which plots the highest and high and
lowestlowoverthelastperiodtimeintervals.

The Donchian Channel is a simple trend followingbreakout system.Thesignalsderivedfrom

thissystemarebasedonthefollowingbasicrules:

1:WhenpriceclosesabovetheDonchianChannel,buylongandcovershortpositions
2:WhenpriceclosesbelowtheDonchianChannel,sellshortandliquidatelongpositions.

Double ExponentialMovingAverage ( DEMA):TheDEMAisacalculationbasedonbotha

singleexponentialmovingaverage(EMA)andadoubleEMA.

The DEMA is a fast actingmoving averagethatismoreresponsivetomarketchangesthana

traditional moving average. It was developed in an attempt to create a calculation that
eliminated some of the lag associated with traditional moving averages. The DEMA can be
used as a stand alone indicator and can be incorporated into other technical analysis tools
whoselogicarebasedonmovingaverages.

Force Index : The Force Index is an oscillator that fluctuates above and below the zero. It
combines price movement and volume to assess theforce behindpricemovementsandspot
potentialtrendchanges.Usethefollowingcalculationtoproducea1periodForceIndex.

>ForceIndex(1)=[close(currentperiod)close(priorperiod)]xvolume

AlexanderEldersuggestedusinga13periodForceIndex.

>ForceIndex(13)=13periodexponentialmovingaverageofForceIndex(1)
The 13 periodForceIndexconfirmsshorttermuptrendswhen abovezero,andconfirmsshort
term downtrends when belowzero. When the Force Index Diverges with price,it indicates a
trendchangebecoming.

Heikin Candle or Heikin ashi Technique

: A type of candlestick chart that shares many
characteristics with standard candlestick charts, but differs because of the values used to
create each bar. Instead of using the openhighlowclose(OHLC) bars like standard
candlestickcharts,theHeikinAshitechniqueusesamodifiedformula

close=(open+high+low+close)/4
open=[open(previousbar)+close(previousbar)]/2
high=max(high,open,close)
low=min(low,open,close)

The heikin ashi technique is used by technical traders to identify a given trend more easily.
Hollow candles with no lower shadows are used to signal a strong uptrend, while filled
candleswithnohighershadowareusedtoidentifyastrongdowntrend.

This technique should be used in combination with standard candlestick charts or other
indicatorstoprovideatechnicaltradertheinformationneededtomakeaprofitabletrade.

Ichimoku Cloud : a chart used in technicalanalysis that shows support and resistance,and
momentum and trend directions forasecurityorinvestment.Itisdesignedtoproviderelevant
information ataglanceusingmovingaverages(tenkansenandkijunsen)toshowbullishand
bearish crossover points. The clouds (kumo, in japanese) are formed between spans of the
average of the tenkan sen and kijun sen plotted six months ahead (senkou span B), and of
themidpointofthe52weekhighandlow(senkouspanB)plottedsixmonthahead.

The Ichimoku Cloud provides more data points that the standard candlestick chart. The
overall trend is up when prices are above the cloud, down when prices arebelow the cloud
and flatwhentheyareintheclouditself.When SenkouspanAisrisingaboveSenkouspanB
the trend is stronger upward, and it is typically colored green. When Senkou span B rises
above Senkou span B, the trend is stronger downward and is denoted with a red colored
cloud.

Keltner Channel : Avolatilitybasedenvelopeindicatorthatmeasurethemovementofstocks

inrelationtoanupperandlowermovingaverageband.

This indicator isusedbysophisticatedinvestorstopredictthetrendofthemarket.Anoverbuy

occurs when prices move above the upper band, and an oversell occurs when prices move
belowthelowerband.

Moving AverageConvergenceDivergence(MACD
):Atrendfollowingmomentumindicator
that shows the relationship between two moving averages of prices.TheMACDiscalculated
by subtracting the 26day exponential moving average (EMA) from the12 day EMA. A nine
day EMA of the MACD, calledthe signal line, is then plottedontopoftheMACD,functioning
asatriggerforbuyandsellsignals.


TherearethreecommonmethodsusedtointerprettheMACD:

1: Crossovers As shown in the chart above, when the MACDfallsbelowthesignalline,itis

bearish signal,which indicates that it may be time to sell. Conversely, when the MACDrises
above the signal line, the indicator gives a bullish signal, whichsuggest that the price of the
asset is likely to experience upward momentum. Many traders wait for a confirmed cross
above the signal line before entering into a position to avoid getting faked out or entering
intoapositiontooearly,asshownbythefirstarrow.

2: Divergence : When the security prices diverges from the MACD.It signals the end ofthe
currenttrend.

3: Dramatic rise When the MACD rises dramatically that is, the shorter moving average
pulls away from the longer term moving averageit is a signal that the security is overbought
andwillsoonreturntonormallevels.

Traders also watch for a move above or below the zerolinebecausethissignalstheposition

of the short term average relative to the long term average. When the MACDis above zero,
the short term average is above the long term average, which signals upward momentum.
The oppositeis true when theMACDisbelowzero.Asyoucansee from thechartabove,the
zerolineoftenactsasanareaofsupportandresistancefortheindicator.

McClellan Oscillator:Amarketbreadthindicatorthatisbased onthedifferencebetweenthe

number of advancing and declining issues on the NYSE. It is primarily used for short and
intermediatetermtrading.

To calculate subtract a 39 day EMA (of advancing issues declining issues) from a 19 day
EMA(ofadvancingissuesdecliningissues)

Simplified, it looks as follow : (19 Day EMA of Advances Declines) (39 Day EMA of
AdvancesDeclines)

Usually, a small numberof stocksmaking largegainscharacterizesaweakeningbullmarket.

This gives the perception that the overall market is healthy, but in reality it isnt, as rising
prices are being driven by a small number of stocks. Conversely, when a bear market isstill
declining, but a smaller amount of stocks are declining, an end to the bear market may be
near.

McClellan Summation Index: TheMcClellanSummationIndexisalongtermversionofthe

McClellan Oscillator. It is a market breadthindicator,andinterpretationissimilartothatofthe
McClellanOscillator,exceptthatitismoresuitedtomajortrends.

Usually, a small numberof stocksmaking largegainscharacterizesaweakeningbullmarket.

This gives the perception that the overall market is healthy, but in reality it isnt, as rising
prices are being driven by a small number of stocks. Conversely, when a bear market isstill
declining, but a smaller amount of stocks are declining, an end to the bear market may be
near.

Money Flow Index (MFI) : A momentum indicator that uses a stocks price and volume to
predict the reliability ofthecurrenttrend.BecausetheMoneyFlow Indexaddstradingvolume
totheRelativestrengthIndex(RSI),itsometimesreferredtoasvolumeweightedRSI.

Arriving at the index figure requires several steps. The developer of the Money Flow Index,
suggestedusinga14dayperiodforcalculations.

1:DeterminetheTypicalPriceasfollows:(high+low+close)/3
2:CalculatetheRawMoneyFlow:TypicalPricexVolume
3: Identify the Money Flow Ratio: (14 period Positive Money Flow) / (14 period Negative
MoneyFlow)

( Note : Positive money values are created when the typical price is greater than the
previous price value.Thesumofpositivemoneyoverthenumberofperiodsusually14days
isthepositivemoneyflow.Theoppositeistrueforthenegativemoneyflowvalues)
4:Finally,arriveattheMoneyFlowIndex.Thisis:100[100/(1+MoneyFlowRatio)]

Many traders watch for the opportunities that arise when the MFI moves in the opposite
direction as the price. This divergence can often be a leading indicator of a change in the
currenttrend.

Parabolic SAR orParabolicindicator:Atechnicalanalysisstrategythatusesatrailingstop

and reverse method called SAR, or stop and reversal, to determine good exit and entry
points.

AlsoknownasParabolicStopandReverse(PSAR)

In this method if the stock is trading below the parabolic SAR (PSAR) you should sell.If the
stockisabovetheSARthenyoushouldbuy(orstaylong).

Performance Indicator or KeyPerformanceIndicator(KPI):Asetofquantifiablemeasure

that a company orindustry uses to gauge or compare performance interms ofmeeting their
strategic and operational goals. KPIs vary between companies and industries, depending on
theirprioritiesorperformancecriteria.AlsoreferredtoasKeysuccessIndicators(KSI)


A company mustestablishitsstrategicandoperational goalsandthenchoosetheKPIswhich
best reflect those goals. For example, if a software companys goal is to have the fastest
growth in its industry, its main performance indicator may be the measure of revenuegrowth
year on year. A companys KPIs will be stated in its annual report. Also KPIs will often be
industrywidestandards,likesamestoresalesintheretailsector.

Pivot
: A price level established as being significant either because the market fails to
penetrate it or because a sudden increase in volumeaccompaniesamovethroughthat price
level

As a technical indicator, the pivot price is similartoresistanceorsupportlevels.Ifthepriceis

exceeded,abreakoutisexpectedtooccur.

Price Volume Trend or Volume Price Trend Indicator (VPT) : A technical indicator
consisting of a cumilative volumbe line that adds or subtracts a multiple of the percentage
change in share price trend and current volume, depending upon their upward or downward
movements.

This indicator is used to determine the balance between a stocks demand and supply. The
percentage change in the share price trend denotes the relative supply or demand of a
particularsecurity,whilevolumeindicatestheactualsizeoftheforces.

RMO : This indicator is a gauge to market direction. It is displayed as a histogram. As a

bullish buy sign, wewill look for the point at which the histogram shows movement crossing
the oscillators zero line going upwards. If it should go down and cross the line going down,
thatwouldbeoursellsignorashortsellsign.

Rate of Change:Thespeedatwhichavariablechangesovera specific periodoftime.Rate

of change isoften used when speaking about momentum, and itcangenerallybeexpressed
as a ratio between a change in one variable relative to a corresponding change in another.
Graphically,therateofchangeisrepresentedbytheslopeofaline.

Rate of change is oftenillustrated by the Greek letter delta. Manytraderspaycloseattention

to the speed at which one variable changes relative to another. For example, option traders
study the relationship between the rate of change in the priceof an option relative to asmall
changeinthepriceoftheunderlyingasset,knownasanoptionsdelta.

Automated Bond System ABS : The electronicsystemontheNYSEthatrecordsbidsand

offersforinactivelytradedbondsuntiltheyarecanceledorexecuted.

Because the bid and askprices of inactively traded bonds arent constantly changing due to
demand and supplyconditions, investors looking for a quote mayhave difficulties.Byhaving

all inactive bonds electronically monitored, the NYSE is able to keepagoodinventorofbond

prices,justincaseaninvestorisinterestedinpurchasingthem.

Relative Strength Index (RSI) : A technical momentum indicator that compares the
magnitude of recent gains to recent losses in an attempt to determine overbought and
oversoldconditionsofanasset.Itiscalculatedusingthefollowingformula:

RSI=100100/(1+RS*)

*WhereRS=Averageofxdaysupcloses/Averageofxdaysdowncloses

As you can see from the chart, the RSI ranges from 0 to 100. An asset is deemed to be
overbought oncethe RSIapproaches70 level, meaningthatitmaybegettingovervaluedand
is a good candidatefor a pullback. Likewise, if the RSI approaches 30,itisanindicationthat
theassetmaybegettingoversoldandthereforeliketobecomeundervalued.

A trader using RSI should be aware that large surges and drops in the price of an asset will
affect the RSI by creating false buy or sell signals. The RSI is best used as a valuable
complementtootherstockpickingtools.

Stochastic Oscillator
: A technical momentum indicator that compares a securitys closing
price to its its price range over a given time period. The oscillators sensitivity to market
movements can be reducedbyadjustingthetimeperiodorbytakingamovingaverageofthe
result.Thisindicatoriscalculatedwiththefollowingformula.

%K=100[(CL14)/(H14L14)]

C=themostrecentclosingprice
L14=thelowofthe14previoustradingsessions.

H14=thehighestpricetradedduringthesame14dayperiod.

%D=3periodmovingaverageof%K

Thetheory behindthisindicatoristhatinanupwardtrendingmarket,pricestendtoclosenear
their high, and during a downward trending market, prices tend to close near their low.
Transaction signaloccur when the %K crossesthroughathreeperiodmovingaveragecalled
the%D.

Stochastics RSI or StochRSI : An indicator usedin technical analysis that rangesbetween

zero and one and is created by applying the stochastic oscillatorformulato a set of Relative
Strength Index (RSI) values rather than standard price data. Using RSI values within the
stochastic formula gives traders an idea of whether the current RSI value is overbought or
oversold a measure that becomes specifically useful when the RSI value is confined
betweenitssignallevelsof20and80.

The StochRSI is deemed to be oversold when the value drops below 0.20, meaning the RSI
value is trading at the lower end of its predefined range, and that the short term direction of
underlying security may be nearing a correction. Conversely, a reading above 0.80suggests
the RSI may be reaching extreme levels and could be used to signal a pullback in the
underlyingsecurity.

TRIX or Triple Exponential Average : A momentum indicator used bytechnicaltradersthat

shows thepercentagechangeinatripleexponentiallysmoothedmovingaverage.When TRIX
is applied to triple smoothing of moving averages it is designed to filter out pricemovements
that are considered insignificant or unimportant. TRIX is also implemented by technical
traders to produce signal that are similar in nature to the Moving Average Convergence
Divergence(MACD).

TRIX has become a popular technical analysis tool to aid chartists in spotting diversion and
directional cues in stock tradingpatterns. Although many considerTRIX to be very similarto
MACD, the primary difference between the two is that TRIX outputs are smoother duetothe
triplesmoothingoftheexponentialmovingaverage(EMA).

True Strength Index TSI

: A technical momentum indicator that helps traders determine
overbought and oversold conditions of a security by incorporating the short term purchasing
momentum of the market with the lagging benefits of moving averages. Generallya 25 day
EMA is applied to the differencebetweentwoshare prices,andthena13dayEMAisapplied
to the result, making the indicator more sensitive to prevailing market conditions. After the
data is smoothed, some calculations are done to make theindicatorfallinarangefrom+100
to100orfrom+1to1

A signal line (7 day EMA) is usually added as it is to the moving average convergence
divergence indicator to help identify reversals. In addition, values of 25 and +25, like the
levels of 30 and 70 used in the relative strength index, can also be used to identify levels
where a security is overbought or oversold. The true strength indicator is a variation of the
relativestrengthindex.

Ulcer Index UI
: A technical indicator that measures downside risk, in terms of both depth
and duration of price declines. The Ulcer Index(UI) increases in value as the price moves
farther away from a recent high, and falls as the price rises to new highs. The indicator is
usually calculated over 14 days, with the UI showing the percentage drawdown a trader can
expectfromthehighoverthatperiod.

ThegreaterthevalueoftheUI,thelongerittakesforastocktogetbacktotheformerhigh.

Theindicatoriscalculatedinthreesteps:

1:PercentageDrawdown=[(close14periodHighclose)/14periodhighclose]x100
2:SquaredAVerage=(14periodSumofPercentageDrawdownSquared)/14
3:UlcerIndex:SquarerootofsquaredAverage.

It is used for analyzing mutual funds, the indicator only looks at downside risk, not overall
volatilitylikestandarddeviation.

Which price high is used intheUIcalculationisdeterminedbyadjustingthelookbackperiod.

A 14 day Ulcer Index measures decline off the highest point in the last 14 days. A 50 day
Ulcer indexmeasuredeclinesoffthe50dayhigh.Alongerlookbackperiodprovidesinvestors
withamoreaccuraterepresentationofthelongertermpricedeclinestheymayface.Ashorter
termlookbackperiodprovidestradersagaugeofrecentvolatility.

use the UlcerIndextocomparedifferentinvestmentoptions.AloweraverageUImeanslower

drawdown risk compared to an investment with a higher average UI. Applying a moving
aeragetotheUIwillshowwhichstocksandfundshavelowervolatilityoverall.
Watching for spikes in UI which are beyond normal can also be used to indicate times of
excessivedownsiderisk,whichinvestorsmaywishtoavoidbyexitinglongpositions.

UltimateOscillator: A Technicalindicatorwhichusestheweightedaverageofthreedifferent
time periods to reduce the volatility and false transaction signals that are associated with
manyotherindicatorsthatmainlyrelyonasingletimeperiod.

This is a range bound indicator, which means the value fluctuates between o and 100.
Similar to the RSI, levels below 30 are deemed to be oversold, and levels above 70 are
deemed to be overbought. Transaction signals are derived by finding situations where the
price is going in opposite directions that the indicator. Once this divergence has been
identifiedthetraderwillwaittoconfirmthetransactionbyusingothertechnicalindicators.

Volatility : 1: A statistical measure ofthe dispersion of returns for a givensecurityormarket

index. Volatility can eitherbe measured by using the standard deviation orvariancebetween

return from that same securityor marketindex.Commonly,thehigherthevolatility, theriskier

thesecurity.

2: A variable in option pricing formulas showing the extent to which the return of the
underlying asset will fluctuate between now and the options expiration. Volatility, as
expressed as a percentage coefficient within optionpricingformulas,arisesfromdailytrading
activities.Howvolatilityismeasurewillaffectthevalueofthecoefficientused.

In otherwords,volatilityreferstotheamountofuncertaintyorrisk aboutthe
size of changes in a securitys value. A higher volatility means that a securitys value can
potentially be spread out over a larger range of values. This means that the price of the
security can change dramatically over a short time period in eitherdirection.Alowervolatility
meansthatasecuritysvaluedoesnotfluctuatedramatically,butchangesinvalueatasteady
paceoveraperiodoftime.

One measure of the relative volatility of a particular stock to the market is its beta. A beta
approximates the overall volatility of a securitys return against the returns of a relevant
benchmark. For example, a stock with a beta value of 1.1 as historically moved 100% for
every 100% move in the benchmark, based on price level. Conversely,astockwithabetaof
0.9hashistoricallymoved90%forevery100%moveintheunderlyingindex.

On Balance Volume (OBV)

: A momentum indicator that uses volume flow to predict
changes in stock price. On Balance Volume is a metric which increases sharply without a
significantchangeinthestocksprice,thepricewilleventuallyjumpupward,andviceversa.

The theory behind OBV is based on the distinction between smart money namely,
institutional investors and less sophisticated retail investors. As mutual funds and pension
funds begin to buy into an issue that retail investors are selling , volume mayincrease even
as the price remainsrelativelylevel.Eventually,volumedrives thepriceupward.Atthatpoint,
largerinvestorsbegintosell,andsmallerinvestorsbeginbuying.

The following chartdepicts OBV. Iftodayscloseisgreaterthanyesterdaysclose,thentoday

volume is addedtoyesterdaysOBV,andisconsideredupvolume.However,iftodaysclose
is less than yesterdays close, todays volume is subtracted from yesterdays OBV and is
considereddownvolume.

Williams %R : In technical analysis, thisisamomentumindicatormeasuring overboughtand

oversold levels, similar to a stochastic oscillator. It compares a stocks close to the highlow
rangeoveracertainperiodoftime,usually14days.

It is used to determine marketentryandexitpoints.The Williams%R producesvaluesfrom0

to 100, a reading over 80 usually indicates a stock is oversold, while reading below 20
suggestastockisoverbought.