A candlestick chart is a graphical representation of price action over a given time period. Each candlestick on the chart represents a specific time period, typically one day. The candlestick is composed of a “body” and “wicks”. The body represents the open and close price for the given time period, while the wicks represent the … Read more
A breakout is a move by a security that moves outside of a defined trading range. A breakout can occur either to the upside or the downside. A downside breakout typically occurs when the security moves below a support level, while an upside breakout typically occurs when the security moves above a resistance level. What … Read more
When looking at a bar chart to monitor prices, traders will typically use the following methods: 1. Price Action: This method looks at the bars themselves to interpret what the market is doing. For example, if the bars are getting shorter, it may indicate that the market is losing steam and may be due for … Read more
The Price Rate of Change Indicator (ROC) measures the percent change in price from one period to the next. The ROC calculation compares the current price with the price “n” periods ago. The plot forms an oscillator that fluctuates above and below the zero line as the price changes. The further the oscillator moves from … Read more
The True Strength Index (TSI) is a technical indicator that measures the momentum of a security’s price by comparing the magnitude of recent gains to recent losses. The TSI is calculated by first determining the price change over a certain period, and then taking the absolute value of that change. The resulting value is then … Read more
Confirmation in technical analysis is when a signal is generated by one indicator and then confirmed by another. This increases the validity of the signal, as it is less likely to be a false positive. There are many different ways to confirm signals, but some common methods include using a different indicator to generate the … Read more
A trend trading definition can be quite simple or quite complex, depending on who you ask. Generally, though, trend trading refers to a strategy in which a trader looks to enter into a trade in the direction of the underlying trend. There are a few different ways to measure or identify a trend, but one … Read more
A Shooting Star Is a technical analysis pattern in stock trading that can be a sign of a reversal in the current trend. What is a hammer in trading? A hammer is a candlestick pattern that occurs after a period of decline and signals a potential reversal in the underlying security. The hammer candlestick is … Read more
How to Calculate Pivot Points. What is R1 R2 R3 pp S1 S2 S3? The terms R1, R2, and R3 refer to the three resistance levels that are typically used by technical analysts when charting a stock. The term “pp” stands for pivot point, which is the point at which the stock is considered to … Read more
The Saucer Pattern is a reversal pattern that is found on bar charts. It is characterized by a series of three downtrends followed by a break above the resistance of the third downtrend. The pattern is considered to be complete when the stock price closes above the resistance level. What are the 5 patterns? 1. … Read more
