This code exploress three trading strategies: MACD, Bollinger Bands, and MFI on the Crude Oil (CL) and Heating Oil (HO) future indexes. Each strategy indicates when the best time to either buy and sell the two assets.
Moving Average Convergence Divergence (MACD) is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. MACD triggers technical signals when it crosses above (to buy) or below (to sell) its signal line. The MACD histogram (MACD - Signal Line) indicates a dip's velocity or rise in a stock or asset.
Bollinger Band is a technical analysis tool defined by a set of trendlines plotted two standard deviations (positively/upper and negatively/lower) away from a simple moving average (SMA). Whenever a stock closing price passes, these deviations indicate a good time to buy/sell.
MFI (Money Flow Index) or also known as Volume Weighted RSI, is an oscillator that uses price and volume data to determine when an asset is either overbought or oversold. Like RSI, a level above 80 is considered overbought, which indicates to buy, and below 20 is considered under-sold and indicates to buy.