The Qstick indicator is an exponential moving average of the difference between the open and close. The “stick” in the name comes from candlestick charting. The body of a candlestick is from the open to the close. A white candlestick is an up and a black candlestick is a down day. Positive Qstick values indicate a majority of up days; negative values, a majority of down days.
To interpret the Qstick, look for a buy signal when it crosses above zero, and a sell signal when it crosses below zero. Also look for a buy signal when the Qstick is very low and turns up, and a sell signal when it is very high and turns down. A moving average of the Qstick can be used as a trigger line (look for the Qstick to cross the trigger). You can also look for divergence between the Qstick and price to indicate the end of a trend or as a non-confirmation of a price move.
The Qstick indicator was developed by Tushar S. Chande and Stanley Kroll and is described in their 1994 book The New Technical Trader.
Copyright © 2016, FM Labs, Inc.