Jack Schwager is probably not an unfamiliar name to our traders, he is the author of the "Market Wizards" series. In this article, let's take a look at the indicators this trader dubbed the market witch uses for his analysis and why he uses them.


  • Trend Weight (TW): This indicator helps traders to grasp major trends in the market. The value on this indicator shows the strength of the trend, and they also give the trader the signal to join a trend when it first starts. The main role of this indicator is to keep you on track in the market and to provide you with profitable trading orders under the right market conditions.
  • Overbought / Oversold (OBOS): This is again a trend reversal indicator that also alerts traders when the trend is up or down excessively. This indicator helps traders grasp when it is possible to exit early when trading in the trend.
  • Direction Weight (DW): This indicator combines the above 2 indicators into one.
  • All of these metrics range in value from +100 to -100.

And here's why Jack Schwager likes to use these metrics:
  • These indicators look simple, just a line or chart on the indicator, very easy to recognize trading signals. In short, they are very easy to use.
  • They provide potential buy and sell signals with small losses and larger profits.
  • Indicators are made up of historical price data with a variety of market conditions, not just data from recent years.
  • Price action is measured in the direction of the direction and strength of the trend as well as the overbought/oversold poles. These are important elements to incorporate into a trading system.
  • The signals of these indicators can help traders grasp the long-term trend in order to capture large market moves. But it can also be used for short-term traders when trading with the trend.

Through the reports he uses, we can also see that he is a trend trader. And the information you need to know to build a strategy is the trend, its strength, when it changes (overbought zone, oversold zone). This is also information from the following sales message.

Also from this business mindset, we can see that in order to be profitable in the long term, we should choose trend trading, engage when the trend is of good quality, and not be reversed. And exit when the signal reverses.