What Happens in Indices Trading After Coppock Curve Bullish Crossover Indices Trading Signal
Coppock Curve Bullish Crossover Signal is a signal that shows the stock indexes price is closing higher than it opened. Once there is a bullish Coppock Curve crossover signal the indices prices on the stock indices chart are expected to keep move in a bullish upward indices trend - this means that the indices prices are expected to keep closing higher.
The Coppock Curve bullish crossover signals - The average stock indexes price on a stock indices chart will keep closing higher than it opened as long as the Coppock Curve bullish crossover signal remains bullish.
After Coppock Curve Bullish Crossover Signal - traders should open buy stock indexes trades as this is a bullish signal.
If the Coppock Curve signals crosses below the Coppock Curve bullish crossover mark - then this shows that indices prices are no longer closing higher than they opened and the bullish momentum has reduced and traders should close their open buy stock indexes trades if they had opened trades based on this Coppock Curve Bullish Crossover Signal.
Coppock Curve Bullish Crossover Indices Trading Signal
Coppock Curve indicator was used for technical analysis of Stocks & Commodities in the beginning but was later used to trade Indices.
The principle behind this is the psychology of trading, based on the theory that human habit is predictable. And stock indexes price movement always oscillates in a zigzag manner.
The principle of adaptation-level applies to how stock indexes price reacts at certain levels, stock and stock indices prices will react in the same way or pattern as those observed historically.
Indices Technical Analysis and Generating Indices Trading Signals
In indices trading, The moving average is the simplest form of an adaptation-level, the stock indexes price will oscillate around the moving average. This forms the basis of this indicator, which is a longer term oscillator based on this adaptation-levels(moving average), but in a different way.
Oscillators usually begin by calculating a % change of the current stock indexes price from some previous stock indexes price point, where the previous stock indexes price point is the reference point (adaptation-level).
Edwin Coppock reasoned that the stock indexes trading market participants' emotional state could be quantified by summing up the % changes over the recent past to get a general sense of the stock indexes trading market's longer term momentum.
For example, If we compare indices prices relative to a year ago and we see that this month the stock indexes trading market is up 20% compared to a year ago, last month it was up 15% over a year ago, and 10%, 7.5% and 5% respectively the months before that, then we may determine that the stock indexes trading market is gaining momentum.
Basic signals can also be generated using the Coppock Curve to trade market reversals from extreme stock indexes price levels. Looking for divergence and indices trend line breaks may also be combined to confirm the signal.