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Technical Indicators

The primary objective of using technical indicators is to predict the future price levels or simply the general price direction.

Technical Indicators - Theoretical Background

Technical indicators are a result of mathematical calculations that can be used with the stock’s price and/or volume. They are used by both short-term active traders and also by long-term investors. Active traders use technical indicators primarily for analyzing short-term price movements while long-term investors use them to help identify good entry and exit points for the stock by analyzing the long-term trend.

The momentum indicators are used to identify an overbought or oversold condition. They’re good warning flags to help you time a trade, whether that means getting in or getting out of a position. The trend indicators are used to provide an objective measure of the direction of the trend and spotting points when a trend may be ending or a new trend may be starting to emerge.

A statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame. Value at risk is used by risk managers in order to measure and control the level of risk which the firm undertakes. The risk manager's job is to ensure that risks are not taken beyond the level at which the firm can absorb the losses of a probable worst outcome.

PortfolioSelector Technical Indicators

Utilizing "a stop-light" like color scheme, PortfolioSelector provides technical indicators for each portfolio in a easy to read table. The primary focus is on indicators that work well together with the statistical management/optimization approach.

  • Momentum Indicators - these are early entry and exit indicators designed to predict price movements.
  • Trend-following Indicators - these indicators follow the price action and attempt to provide an objective measure of the direction of the trend.
  • Risk Indicators - these factors measure and quantify the level of financial risk and also deviations from the normality of asset returns and are used to indicate vulnerability to extreme negative returns.
  • Percentile - this indicator provides the percentile measurement of the current stock price.

You can enter up-to 100 stocks in the Watch List.

With PortfolioSelector, you can use the technical indicators to:

  • Determine a short-term and long-term trends
  • Determine entry and exit signals
  • Solve for the optimal portfolios at the efficient frontier endpoints
  • Determine an optimized portfolio just by selecting a desired optimal portfolio return value
  • Determine optimized stock portfolios that meets your investment return goals
  • Compute alternative portfolio combinations
  • Perform your own analysis and scenarios
  • Minimize investment risk and maximize return

The creation of optimal portfolio is not just a problem of finding attractive investments. Utilizing the state-of-the-art quadratic optimization engine that is capable of solving the most challenging optimization tasks, PortfolioSelector provides a comprehensive portfolio optimization and analysis solution.


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