Coppock Curve technical indicator was introduced by E.S. Coppock in 1965. The indicator was designed to help the longtime investors in the market. Primarily the indicator was designed for a monthly timescale. earlier the indicator was used to create buy opportunities. Buy position was created when the curve moved to positive territory from negative. Later seeing the indicator creates a similar opportunity for sellers also, the indicator was used to short sell a stock when the indicator enters the negative zone. By default, the indicator uses 10 period WMA (weighted moving average) for smoothing out. An 11 period and a 14 period ROC (rate of change) indicator. The indicator is basically a smoothed momentum oscillator that moves from positive to negative territory above and below zero line indicating buy and sell signals. Zerodha Kite charts are equipped with this indicator for traders.
How to set up Coppock Curve Technical Indicator in Zerodha Kite?
- Go to MarketWatch.
- Choose the stock you are going to trade.
- Right click on the stock and select chart from graphic icons.
- Chart window of the stock opens.
- Go to studies. Select studies.
- Go to Coppock Curve and click on it.
- A small window opens with default parameters of the indicator.
- Once the parameters are selected, the Done command is chosen, the parameters window goes off the screen and the indicator is plotted on stocks price.
How to trade intraday using Coppock Curve Technical Indicator?
- The indicator shows price trend and trading opportunities.
- The picture above shows Reliance Industries stock price movement with respect to the indicator.
- The chart shows 1 min. timeframe.
- The strategy shows the price trend. Understanding price trend from this indicator is important before creating a position.
- In 1-minute chart, traders may find many whipsaws which will be eliminated if longer time frames are used and this indicator is used with a combination of other indicators.
- Create short position when the oscillator goes below zero line creating sell signals.
- Exit from the stock or create fresh buy position the oscillator goes above zero line.
- The indicator works well in monthly time frame creating buying and selling opportunities. But these signals are very few though very few whipsaws can be found.
The Coppock Curve technical indicator was mainly introduced to find out the long-term buying opportunities in the S&P 500 index. Though it was initially used in the monthly chart traders can use this analysis in daily, weekly as well as intraday charts as well. Technically using Coppock Curve with support and resistance gives a better accuracy.
Indrajit is a professional blogger and trading system developer. Amibroker expert, WordPress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely.
Categories: Technical Indicators