Divergence Indicator

Trading Library Divergence Indicator tl;dr The Divergence Indicator is a technical tool used by traders to spot potential trend reversals by comparing price action with the movement of technical indicators like RSI, MACD, or Stochastic Oscillator. When the price and the indicator move in opposite directions, it signals that momentum is weakening and a reversal … Read more

Distribution

Trading Library Distribution tl;dr Distribution in trading is the phase where large investors or institutions sell their holdings to retail traders after a period of price increase. It is usually signaled by declining volume during rising prices or increased selling pressure. By spotting signs of distribution, traders can prepare for potential price reversals or the … Read more

Directional Movement Index (DMI)

Trading Library Directional Movement Index (DMI) tl;dr The Directional Movement Index (DMI) is a tool used by traders to assess the strength of trends in the market. It consists of three parts: +DI (positive directional indicator), -DI (negative directional indicator), and ADX (Average Directional Index). The DMI helps traders identify whether a market is in … Read more

Detrended Price Oscillator (DPO)

Trading Library Detrended Price Oscillator (DPO) tl;dr The Detrended Price Oscillator (DPO) is a tool used by traders to isolate and identify short-term price cycles by removing the long-term trend from the data. It helps highlight oscillations within a trend, making it easier for traders to spot entry or exit points. When the DPO is … Read more

Depth of Market (DOM)

Trading Library Depth of Market (DOM) tl;dr Depth of Market (DOM) is a tool that shows the supply and demand at different price levels in real-time. It provides insights into market liquidity and helps traders understand the potential impact of large orders on price movement. By analyzing the DOM, traders can assess market depth, predict … Read more

Debt-to-Equity Ratio

Trading Library Debt-to-Equity Ratio tl;dr The Debt-to-Equity Ratio is a financial metric that compares a company’s total debt to its shareholders’ equity. It helps investors assess the company’s financial leverage and risk. A low ratio (below 1) indicates less reliance on debt, which is generally safer, while a high ratio (above 1) indicates higher leverage … Read more

Current Ratio

Trading Library Current Ratio tl;dr The Current Ratio is a financial metric that measures a company’s ability to cover its short-term liabilities with its short-term assets. A ratio higher than 1 suggests good liquidity, meaning the company can meet its short-term obligations. A ratio below 1 could signal potential liquidity issues. It’s an essential tool … Read more

Currency Pairs

Trading Library Currency Pairs tl;dr Currency pairs are the foundation of forex trading, where two currencies are traded against each other. The first currency in the pair is the base currency, and the second is the quote currency. Traders buy or sell currencies based on their expectations of future price movements. Major pairs, like EUR/USD, … Read more

Cup and Handle Pattern

Trading Library Cup and Handle Pattern tl;dr The Cup and Handle pattern is a bullish chart pattern that signals a potential breakout to the upside after a period of consolidation. The pattern consists of a rounded “cup” followed by a smaller pullback or “handle.” When the price breaks above the resistance at the top of … Read more

Cumulative Delta

Trading Library Cumulative Delta tl;dr Cumulative Delta tracks the difference between buying and selling volume over time to gauge market momentum. It shows whether there’s more buying or selling pressure and helps traders confirm price trends, spot divergences, and identify potential reversals. Rising Cumulative Delta indicates bullish momentum, while falling Cumulative Delta suggests bearish momentum. … Read more