THE R.K Trader

RSI indicator RSI stands for Relative Strength Index — it's a momentum oscillator used in technical analysis to measure the speed and change of price movements . 🔍 What is RSI? RSI helps traders identify overbought or oversold conditions in a market. It ranges from 0 to 100 . Default setting is 14 periods (usually days, but can be minutes, hours, etc.). 📈 How to Read RSI Above 70 : Market is considered overbought → potential for a price drop . Below 30 : Market is considered oversold → potential for a price rise . Between 30 and 70 : Neutral zone (no strong signals). 🧮 RSI Formula RSI is calculated using: ini Copy Edit RSI = 100 - ( 100 / ( 1 + RS)) Where RS (Relative Strength) is: ini Copy Edit RS = Average Gain over 14 periods / Average Loss over 14 periods 📊 Example: If over the last 14 days: Average gain = $1 Average loss = $0.50 Then: ini Copy Edit RS = 1 / 0.5 = 2 RSI = 100 - ( 100 / ( 1 + 2 )) = 66.67 ...

MACD. MACD stands for Moving Average Convergence Divergence — it's a popular momentum and trend-following indicator used in technical analysis of stock, forex, and crypto markets. 🔍 What is MACD? MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA : java Copy Edit MACD Line = 12 EMA - 26 EMA A 9-period EMA of the MACD line is also plotted — this is called the Signal Line . 📊 Components of MACD MACD Line : Shows the difference between the 12-day and 26-day EMA. Signal Line : A 9-day EMA of the MACD line — used to generate buy/sell signals. Histogram : The difference between the MACD Line and the Signal Line. 📈 How to Use MACD MACD Crossover : Bullish signal : When the MACD line crosses above the signal line. Bearish signal : When the MACD line crosses below the signal line. Zero Line Cross : When MACD crosses above zero → possible upward trend. When MACD crosses below zero → ...

Indices  The term "indices" is the plural of "index" , and its meaning depends on the context in which it's used. Here are a few common contexts: 1. Mathematics / Programming Index refers to the position of an element in a list or array. Indices are multiple positions. Example: python Copy Edit arr = [ 10 , 20 , 30 ] # Index 0 = 10, Index 1 = 20, etc. "The indices of this array range from 0 to 2." 2. Finance An index is a statistical measure of change in a market. Indices (like the S&P 500, Dow Jones, Nasdaq) track the performance of groups of stocks. Example: "Stock market indices are used to gauge the health of the economy." 3. Publishing / Books An index is the alphabetical listing at the end of a book with topics and page numbers. Indices are multiple such lists (rare usage). 4. Databases / Search Engines An index helps speed up the retrieval of data. Indices refer to multiple ...

ITM,OTM,ATM  The terms ITM , OTM , and ATM refer to the moneyness of options—essentially, whether exercising an option would be profitable, based on the current price of the underlying asset. Here’s what each one means: 🔵 ITM (In the Money) Call Option: ITM when the current price of the underlying is above the strike price . Example: Stock is $110, Call strike = $100 → ITM by $10. Put Option: ITM when the current price of the underlying is below the strike price . Example: Stock is $90, Put strike = $100 → ITM by $10. ✅ Profitable to exercise (excluding premium paid). ⚪ ATM (At the Money) An option is ATM when the strike price ≈ current price of the underlying asset. Example: Stock is $100, Call or Put strike = $100. ⚖️ Break-even point (no intrinsic value). 🔴 OTM (Out of the Money) Call Option: OTM when the stock price is below the strike price . Example: Stock is $90, Call strike = $100 → OTM by $10. Put Option: OTM when the stock p...

Option Greeks Option Greeks are key metrics used to measure the sensitivity of an option’s price to various factors. They help traders understand the risks and potential rewards involved in options trading. The Main Option Greeks: What It Measures What It Means for Traders Delta (Δ) How much the option price changes with a $1 move in the underlying asset Shows directional risk; e.g., Delta = 0.5 means option price moves $0.50 if the underlying moves $1 Gamma (Γ) Rate of change of Delta for a $1 move in the underlying asset Measures stability of Delta; high Gamma means Delta changes rapidly, more sensitivity Theta (Θ) Time decay — how much the option price decreases as time passes Options lose value as expiration approaches; Theta tells you how fast Vega (ν) Sensitivity to volatility changes in the underlying asset Higher volatility usually increases option price; Vega measures this effect Rho (ρ) Sensitivity to interest rate changes Impact of interest rate changes on option price (...

Technical indicator Technical indicators are mathematical calculations based on price, volume, or open interest data of a financial asset, used by traders to analyze market trends, momentum, volatility, and potential entry or exit points. What Do Technical Indicators Do? Help identify market direction (uptrend, downtrend, sideways) Signal overbought or oversold conditions Show momentum and strength of price moves Confirm or predict trend reversals or continuations Types of Technical Indicators Trend Indicators Show the direction and strength of a trend. Moving Averages (MA): Smooth price data to identify trend direction. Examples: Simple Moving Average (SMA), Exponential Moving Average (EMA) MACD (Moving Average Convergence Divergence): Shows momentum and trend changes. Momentum Indicators Measure speed or strength of price movement. Relative Strength Index (RSI): Measures if an asset is overbought or oversold (typically over 70 = overbou...