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Post a LessonAnswered on 02/03/2020 Learn Tuition/BCom Tuition/Stock and Commodity Markets
Siddharth Shetty
Full Time Trader and Stock market enthusiast
Let me clear two assumptions for you now
1. All indicators either follow the price or lead-based on momentum but are dependent on the underlying stock. A stock with a clear trend and behaviour will also have signs which will give clear direction.
2. Every symbol has an active working percentage which is not stagnant. Like RSI can provide you 70-80% accuracy on a trending market, but if the market is sideways it's skill might go below 40%
So after you've understood the above, it's pretty simple.
For your question a) it may be because the market dynamics have changed and hence the indicator is less useful for the current scenario.
b) the index will always be based on the underlying stock, so if the stock is manipulated or has unclear/choppy trend, the indicator will also give ambiguous results.
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