Monitor of oversold/overbought conditions - rising/falling volum
1 step - - calculate difference between rising anda falling stocks and ETFs
2 step - - calculate 9-period moving avverage
3 step - - calculate bolinger bands (i use indicator "BB Percentile Suite")
Usage
Overbought when last 9 days prevail voumes on rising stocks. BB in upper threshold.
It means that the crowd already bought a lot of stocks. All - optimists. So - market need to calm down and will go down. Crowd always buys on tops and sells on bottoms.
Vice versa for oversold conditions
2 step - - calculate 9-period moving avverage
3 step - - calculate bolinger bands (i use indicator "BB Percentile Suite")
Usage
Overbought when last 9 days prevail voumes on rising stocks. BB in upper threshold.
It means that the crowd already bought a lot of stocks. All - optimists. So - market need to calm down and will go down. Crowd always buys on tops and sells on bottoms.
Vice versa for oversold conditions