Tutorial - Chart Indicators

Chart indicators are technical analysis tools which plot additional information onto a chart for the purpose of pin-pointing or predicting significant moments in the life of a data series. They are created by taking the underlying data values and applying them in a mathematical formula to produce a different series of values for plotting. Many indicators require input values to calculate properly. Where these are required, default values are supplied. Regardless of the frequency you select, the default values are based on a daily frequency.

In this tutorial you will add a moving average crossover indicator as an overlay on the AMP price chart. You will then add a Volume subchart.

To add a chart indicator

Method one: using the dialog bar

  1. In the AMP chart, click the Add Indicator icon. The Add Indicator dialog box displays a list of the available indicators.

  2. Select Moving Average Crossover, then click Next. The Add Indicator dialog box displays default moving average values for the periods 1 and 2. These values are for a daily chart and represent a 5 day and 12 day moving average respectively.

  3. Click Finish. Two moving average lines are overlaid on the AMP chart.

  4. Select Daily from the frequency list.

The Moving Average Crossover indicator is used to identify buy and sell signals. When the lines cross in an upward trend, this is a buy signal. When the lines cross in a downward trend, this is a sell signal. In either case both lines must be moving in the same direction.

Tip: Hover the mouse over the lines on the chart and notice that the data ToolTip now displays all the values plotted for a data point.

 

Method two: using the pop-up menu

  1. Right-click in the AMP chart.

  2. Select the menu path Edit Chart > Add Indicator. The Add Indicator dialog box opens.

  3. Double-click on Volume. The volume indicator does not require input values so it is plotted directly into the chart frame as a histogram subchart. In this subchart, a bar shows the volume traded in each time period on the chart.

To change a chart indicator

In this exercise you will change the values used in the moving average crossover to be 14 days and 30 days.

  1. Right-click in the AMP chart and choose the menu path Edit Chart > Edit Indicator. The Edit Indicator dialog opens and displays the values currently used by the Moving Average Crossover.

  2. Change Period 1 to 14 and Period 2 to 30.

  3. Click Finish. The moving average lines are smoothed out to reflect the longer periods.

To remove a chart indicator

Method one

  1. Right-click in an empty section of the Volume subchart. The chart menu displays.

  2. Select the menu path Edit Chart > Delete Indicator. Because the Volume indicator was the only indicator in this subchart it is removed.

If there are other indicators, the Delete Indicator dialog box opens and lists all indicators in the subchart. To delete one indicatory, click the indicator and click OK.

Method two

  1. Right-click on or near one of the Moving Average Crossover lines to open the chart menu.

  2. Rest the mouse over the arrow to the right of Edit Chart and choose Delete Indicator. The moving average lines are removed from the chart.