Momentum, Direction, and Divergence

By William Blau

Book Overview

A guide to the latest, most promising technical indicators andtheir applications

Momentum, direction, and divergence are the three basic componentsof nearly all technical indicators used in the analysis of stockand commodities trading. And for those who understand them andtheir applications, they are also the pillars of a high-performancetrading strategy. In this groundbreaking book, technical wizardWilliam Blau schools financial professionals in all three.Combining the latest financial information with dozens ofeye-opening graphics, Blau clearly, concisely, and with a minimumof complex mathematics:
* Introduces the principle of double smoothing and develops potentnew indicators based on double smoothing techniques
* Describes the uses and limitations of a variety of notabletechnical indicators
* Explains momentum, direction, and divergence and new ways toapply them
* Presents the True Strength Index and shows how it candramatically improve most directional indicators
* Provides new ways of identifying divergence that makeimplementation far simpler than ever before

MOMENTUM, DIRECTION, AND DIVERGENCE

The Wiley Trader's Advantage is a series of concise, highly focusedbooks designed to keep savvy traders in tune with the latestsuccessful strategies and techniques used by the keenest minds inthe business.

In this latest volume, technical expert Bill Blau shows you howmomentum, direction, and divergence form the basis of mosttechnical indicators and how they can work for you to provide aconsiderable competitive advantage. Clearly, concisely, and with aminimum of complex mathematics, Blau shows you how to understandand apply them. Integrating the latest financial insights with morethan 75 easy-to-follow graphics, Blau describes the uses andlimitations of many of today's most notable technical indicators.He then demonstrates a variety of ways in which the principles ofmomentum, direction, and divergence can be used to create aversatile new set of technical indicators or to improve theeffectiveness of the most widely used traditional indicators.

Focusing on the groundbreaking double smoothing concept, which heintroduces for the first time in this book, William Blau:
* Develops reliable new momentum indicators based on doublesmoothing techniques
* Shows how these indicators improve the effectiveness of mostpopular oscillators, including the RSI, MACD, and stochasticindicators, by solving a host of timing problems
* Combines the standard Welles Wilder techniques with his originalTrue Strength Index to improve the effectiveness of mostdirectional movement indicators
* Introduces new ways of identifying divergence that makeimplementation simpler than ever
* And much more

A complete guide to the most potent new indicators and theirapplications, Momentum, Direction, and Divergence is anindispensable resource for traders, portfolio managers, and allfinancial professionals.

• Format: Hardcover
• Language: English
• ISBN: 0471027294
• ISBN13: 9780471027294
• Release Date: March 1995
• Publisher: Wiley
• Length: 160 Pages
• Weight: 0.90 lbs.
• Dimensions: 0.7" x 6.3" x 9.4"

Customer Reviews

EXTREMELY great book

OK where did my previous review of this book go? I wrote it months ago was it lost? Can't be bothered writing the whole thing again, so in summary: it is an excellent book, picks a main concept of smoothing and constructs some excellent indicators, and many different ones, has great ideas, inspires great ideas, has code / formulas you name it, extremely worthwhile for anyone who is serious and capable of putting these things into use.That means constructing them and understanding them.Some reviewers seem disappointed ... I suspect some people think "momentum" is some magic bullet that will get them into a stock before it moves, other reviewers are arguing definitions, all I can say is that when I first got hold of this book I took a look and did not really like it, but after working my way through it found it to be truly a gem.Very worthwhile.And where did my previous review go? grrrr

An idea stimulator

A fascinating and practical book. Some of Blau's systems can be immediately applied to whatever type of trading system you are currently using. I especially enjoyed his discussion of filtering techniques, which reduce false indications in areas of price congestion. Blau presents this information is a very clear, concise way than can easily be understood by almost anyone. I'm very impressed.If I had to pick one characteristic of the book that I did not like, it would be that it was too short. It would have been helpful to include more backtesting data, and maybe some more chart analysis. The end seems to leave the reader wanting more. A truly great read for the trading hobbyist or professional!

the best I've read .. and I have read a lot !

brilliant... introduces the concept of using moving averages on "momentum" indicators as opposed to the traditional moving average on price. Teaches how the concept of moving averages on "price" produces lag and then highlights the strengths of trading with momentum indicators by way of double smoothing. The best book I have seen on momentum trading .... bar none.

The finest book on momentum investing on the market.

This is a no nonsense book by a true professional for traders who use momentum oscillators. I've successfully used Blau's oscillators for several years; one is the best I've found--period (and I won't disclose which one!!). He ranks with the best and seems not to be recognized. TradeStation code is included.

Excellent Book for Momentum and Trend Followers

This is probably one of the best book I have seen in Technical Analysis. Blau explains clearly in simple English how 'Momentum and Direction' works. Divergence is little tough to understand, overall I think. I would recommend this to anyone who wants to understand Momentum/Direction.