Now it’s your turn. At this point of the course we have set a task to reinforce what we’ve shown you. This task will require you to use a charting package to carry out the exercise. You can set up a free practice trading account with access to charts here.
Goal: To reinforce what lagging and leading indicators are used for in practice.
Exercise: Apply a 20 period SMA and a standard 14-period RSI indicator to a chart. Look back, at the major turning points in price what was each indicator doing? Can you identify any divergence? Did the lagging indicator lag the price action, did the leading indicator lead it?
Difficulty: 2/3
Time to complete: 30 minutes
Solution….don’t press play until you’ve done your bit:
