Custom Charts
You have to select
1) The market your stock is in
2) The ticker of your stock
You are then shown a stockprice chart of the ticker you have chosen with the
choice of 5 overlays and 5 indicators, these can be shown above or below the
stockprice chart. The Overlays and Indicators are explained below.
Overlays
Horizontal Line
This draws a horizontal line at the level which you have to indicate. A handy overlay
to show support or resistance levels
The first variable is the stockprice at which the horizontal line will be shown
Simple Moving Average
A moving average which gives equal weighting to each day's stock price data
Should be used when the stock is 'trending' i.e. bullish or bearish trend
The first variable is the number of days used for the Simple Moving Average
Exponential Moving Average
A moving average which places a greater weighting to recent data
Should be used when the stock is 'trending' i.e. bullish or bearish trend
The first variable is the number of days used for the Exponential Moving Average
Bollinger Bands
An overlay developed by John Bollinger. Three lines with the middle line being a SMA Simple
Moving Average. The upper band is the SMA plus 2 standard deviations. The lower band is the
SMA minus 2 standard deviations. Standard deviation is a statistical concept, 2 standard deviations
ensures that 95% of the price data falls between the upper and lower band.
If the stockprice is above the upper band, it is considered overextended and should fall. The reverse
is true if the stockprice falls below the lower band.
If the bands are tight together it indicates that stock volatility is low, if the bands are very wide it conversely
indicates that stock volatility is high. This volatility indication can be used to help decide which option strategy would be appropriate.
The first variable is the simple moving average. The second variable is the number of standard deviations
Bollinger Bands (area)
The same as Bollinger Bands, but the area between the upper & lower band is shaded in.
The first variable is the simple moving average. The second variable is the number of standard deviations
Parabolic SAR (Stop And Reverse)
An overlay developed by Welles Wilder. When the dotted line appears below the stock price, the last dot is meant to be used
as a trailing stop, if it is reaches the stock price a Sell signal is generated. Conversely, if the dotted line is above the stock price
and gets hit a Buy signal is generated
Is best used when a stock has an strong established trend, bullish or bearish
The first variable is the step, the higher the number, the more sensitive the overlay will be to price fluctuations. The second variable
is the maximum step, the higher the number, the closer the trailing stop will be to the stockprice.
Zig Zag
This overlay is a line which swops direction after certain criteria is met. It is used to reduce stockprice 'noise'. It is best
used in combination with Fibonacci levels & Elliot Wave Theory
The first variable is a percentage number which if reached or exceeded will generate a new ZigZag line
Zig Label
Has the same functionality as Zig Zag, except it does not show lines but stockprice at which the variable criteria has been met
The first variable is a percentage number which if reached or exceeded will generate a new Zig label.
Support & Resistance
Two lines are shown, a red line shows a potential resistance level, a green line shows a potential support line.
Fibonacci retracements
The top line indicates the highest stockprice and the lowest line indicates the lowest stockprice in the given timeframe.
The three middle lines are 38%, 50% and 62% retracement lines (for clarification if you have a 100% retracement the
stockprice would be the same as the lowest stockprice in the given timeframe. The three middle retracement lines are
possible support levels,
The first variable is used to decide from how many days back, the Fibonacci levels will apply.
Indicators
PC ratio
A contrarian indicator, the total daily amount of Put contracts divided by the total daily amount of Call contracts
If the PCratio number is extremely high (relative to previous PCratio numbers), it would imply that there are too many people
bearish and a reversal in stockprice is likely. If the number is relatively extremely low the opposite applies.
POI/COI ratio
The POI/COI ratio (Put Open Interest /Call Open Interest) is similar to the Pcratio number. The total number of open
Put contracts id divided by the total number of Open Call contracts.
If the POI/COIratio number is extremely high (relative to previous POI/COIratio numbers), it would imply that there are too many people
bearish and a reversal in stockprice is likely. If the number is relatively extremely low the opposite applies.
20HV/IV
This indicator is used to see if the options are cheap or expensive. The 20 day historical stock volatility is divided by the
Implied Volatility (derived from the volatility of At The Money options). If the 20HV/IV is higher than 1 the option volatility
is higher than the stock volatility, so you can assume that the options are relatively expensive.If the 20HV/IV is lower than 1, options
are relatively cheap.  
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