Wilder’s Relative Strength Index Indicator vs. Stochastic Indicator

Indicator Exposes Bottoming Strength Prior to Gaps

The Stochastic Indicator is the most popular of all of the Price Oscillators available for stock chart analysis. Stock Indicators should be set up for your own personal Trading Style and trading parameters.

Being as specialized and proprietary as you can possibly be with your own unique set of trading indicators is a huge plus, and gives you a decided edge against the Professional Traders in the Stock Market.

Using an indicator that is overly popular can be detrimental to your success as a trader. It can be hard to switch to a less known indicator, because most traders want to be part of the crowd. But being part of the retail crowd means you are constantly at higher risk of whipsaw trades, as “Cluster Orders” are constantly being tracked by the High Frequency Trading Firms.

As with volume oscillators, a center line oscillation feature for Wilder’s Relative Strength Index Indicator adds depth to the analysis. Instead of looking at merely Overbought/Oversold patterns of highs and lows, when Wilder’s Relative Strength Index starts to waver around its center line it exposes the bottoming pattern of the stock before it gaps up.

Wilder’s Relative Strength Index is not widely used these days, and has the added feature of being highly adaptable and modified. Below in the middle chart window is an example of how I set up this indicator for my TechniTrader Students.

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Trade Wisely,

Martha Stokes CMT

TechniTrader technical analysis using a MetaStock chart, courtesy of Innovative Market Analysis, LLC dba MetaStock

Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses

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