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quincylin1 committed Aug 20, 2022
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Expand Up @@ -15,7 +15,7 @@ In RSI strategy, a market is oversold when the RSI is under 30, where a buy sign

<figure>
<div align="center">
<img src="../imgs/RSI.png" style="width:60%"/>
<img src="../imgs/RSI.png" style="width:70%"/>
</div>
<p align = "center">Figure 1: RSI strategy. A buy signal is triggered when the RSI is below 30 (oversold level), and a sell signal is triggered when the RSI is above 70 (overbought level). (Image courtesy to Investopedia)</p>

Expand All @@ -27,7 +27,7 @@ A Moving Average (MA), whether it is a Simple Moving Average (SMA) or an Exponen

<figure>
<div align="center">
<img src="../imgs/MA.png"/>
<img src="../imgs/MA.png" style="width:70%"/>
</div>
<p align = "center">Figure 2: MA Crossover strategy. The pale blue line is the short-term MA, and the dark blue line is the long-term MA. A sell signal is triggered when the short term MA crosses below the long-term MA (first crossover), and a buy signal is triggered when the short-term MA crosses above the long-term MA (second crossover). Image courtesy to Investopedia)</p>
</figure>
Expand All @@ -38,9 +38,9 @@ MACD stands for Moving Average Convergence Divergence. It is calculated by takin

<figure>
<div align="center">
<img src="../imgs/MACD.png"/>
<figcaption align = "center">Figure 3: MACD Crossover strategy. The orange line is the MACD line and the blue line is the signal line. A sell signal is triggered when the MACD line crosses below the signal line (first crossover), and a buy signal is triggered when the MACD line crosses above the signal line (second crossover). (Image courtesy to Investopedia)</figcaption>
</div>
<img src="../imgs/MACD.png" style="width:70%"/>
</div>
<p align = "center">Figure 3: MACD Crossover strategy. The orange line is the MACD line and the blue line is the signal line. A sell signal is triggered when the MACD line crosses below the signal line (first crossover), and a buy signal is triggered when the MACD line crosses above the signal line (second crossover). (Image courtesy to Investopedia)</p>
</figure>

## Bollinger Bands Strategy
Expand All @@ -50,19 +50,18 @@ Bollinger Bands consist of three lines. The middle line is the SMA of the close
One Bollinger Bands strategy relies on mean reversion, which assumes that if the price deviates substantially from the mean or average, it eventually reverts back to the mean price. Overbought and oversold conditions can then be identified based on this: when the price breaks below the lower Bollinger Band, prices have perhaps fallen too much and are due to bounce. On the other hand, when price breaks above the upper band, the market is perhaps overbought and due for a pullback (Figure 4) \[4\].

<figure>
<div align="center">
<div align="center" style="width:70%">
<img src="../imgs/BollingerBands.png"/>

<figcaption align = "center">Figure 4: Bollinger Bands strategy. The Bollinger Bands region is filled with pale blue. A sell signal is triggered when the close price breaks above the upper line, and a buy signal is triggered when the close price breaks below the lower line. (Image courtesy to Investopedia)</figcaption>
</div>
</div>
<p align = "center">Figure 4: Bollinger Bands strategy. The Bollinger Bands region is filled with pale blue. A sell signal is triggered when the close price breaks above the upper line, and a buy signal is triggered when the close price breaks below the lower line. (Image courtesy to Investopedia)</p>
</figure>

### References
#### References

\[1\] https://www.investopedia.com/terms/r/rsi.asp
- \[1\] https://www.investopedia.com/terms/r/rsi.asp

\[2\] https://www.investopedia.com/articles/active-trading/052014/how-use-moving-average-buy-stocks.asp
- \[2\] https://www.investopedia.com/articles/active-trading/052014/how-use-moving-average-buy-stocks.asp

\[3\] https://www.investopedia.com/articles/forex/05/macddiverge.asp
- \[3\] https://www.investopedia.com/articles/forex/05/macddiverge.asp

\[4\] https://www.investopedia.com/trading/using-bollinger-bands-to-gauge-trends/#:~:text=Bollinger%20Bands%C2%AE%20are%20a%20trading%20tool%20used%20to%20determine,lot%20of%20other%20relevant%20information.
- \[4\] https://www.investopedia.com/trading/using-bollinger-bands-to-gauge-trends/#:~:text=Bollinger%20Bands%C2%AE%20are%20a%20trading%20tool%20used%20to%20determine,lot%20of%20other%20relevant%20information.

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