Question

A Simple Moving Average is slower to responding to price changes then a weight Moving Average

True or False

One reason why price oscillators are useful is because momentful tends to lead price

True or False

The trend of each cycle is most strongly influenced by the trend of the next longest cycle

True or False

Divergences and failure swings are most useful for an RSI indicator when they occur below 70 or above 30

True or False

Answer 1

1) TRUE

Weighted moving average gives more weight to recent prices and less weight to old prices, while simple moving average gives equal weight to all the prices hence ineffective in capturing the recent price changes.

2) TRUE

Price oscillators are mainly used to find the time period during which particular stock / commodity is overbought / oversold and attempt to confirm the bullish or bearish moves. This momentum helps in finding the price direction

3) FALSE

Trend of each cycle is generally influenced by trend of the previous cycle.

4) FALSE

Stock is considered overbough when RSI is above 70 and oversold when RSI is below 30