Qstick indicator was created by Tushar Chande. Its main idea is the mathematical expression of prevailing Trends and their Strength in Candlestick chart.
Qstick calculation is very simple. It is based on EMA calculation. The EMA is not calculated from Close prices, as we were used to, but it is calculated from the difference Close - Open prices.
Qstick = MAx (Close – Open)
MAx = Chosen MA of the difference (Close – Open)
Qstick is an oscillator. It oscillates around the Zero line.
Qstick express the fact whether more of the Candles close Higher or Lower (green and red candles or white and black candles). If the indicator value is negative, it means that more of the candles began to close lower. It means the Bears are stronger and there is a preasure to Sell. If the Q stick value is positive, it means the Bulls get stronger and its better to go Long.
Qstick can be used as an alternative to Candlestick chart. Its values show us what trend prevails on the market.
How to use Qstick:
- If Qstick crosses Zero line upwards it's a signal to go Long (the preasure to Buy is stronger). If Qstick crosses Zero line downwards the preasure to sell is stronger, so we go Short.
- Signals to go Long or Short can be generated by the Qsick and its MA crossings, too. If Qstick crosses its MA upwards, we Buy and vice versa.
- We can also trade the positive and negative divergences if there are any.