Technical analysis, also known as charting, is the study of the trading history (the price and volume over time) of any type of traded market (stocks, commodities, etc.) to attempt to predict future prices. continued…
Accumulation/Distribution index is a technical analysis indicator created by Marc Chaikin. It’s a cumulative total volume, adding or subtracting each day’s volume in proportion to where the close is between the day’s high and low. continued…
Algorithmic trading is the use of very complex computer programs to trade financial instruments (e.g., stocks, bonds, etc.) in electronic markets. This is useful only in markets that offer some sort of electronic access. continued…
Average True Range (ATR) is a technical analysis indicator developed by J. Welles Wilder, based on trading ranges smoothed by an N-day exponential moving average.
The range of a day’s trading is simply high - low. True range extends it to yesterday’s closing price if that was outside today’s range, ie.
true range = max(high,closeprev) - min(low,closeprev) continued…
Bollinger Bands is a technical analysis tool invented by John Bollinger in the 1980s. They evolved from the concept of trading bands, and can be used to measure the relative highness or lowness of price.
A bottom is an event in technical analysis, where prices reach a low, then a lower low, and then a higher low.
The first low signifies the pressure from selling was greater than the pressure from buying. The second lower low suggests that selling still had more pressure than the buying. The third higher low suggests that buying pressure will not let prices fall as low as the previous low. This turning point from selling pressure to buying pressure is called a bottom. continued…
A breakout is when prices pass through and stay through an area of support or resistance.
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1. A security represents the fair market value as agreed between buyers and sellers i.e. bulls and bears.
2.Change in the prices are the results change in investors expectations of securities future price. continued…
A candle line is the basic symbol representing the change of data in a candle chart.
The candle line consists of a body (a rectangular box or a horizontal line segment), an optional upper shadow (a vertical line segment) and an optional lower shadow (a vertical line segment). continued…
A candlestick chart is a style of bar-chart used primarily to describe price movements of an equity over time.
It is a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. It is most often used in technical analysis of equity price patterns. continued…
The Commodity Channel Index (CCI) is an oscillator originally developed by Donald Lambert. He introduced this new oscillator in an article published in the October 1980 issue of Commodities magazine (now known as Futures magazine).
The CCI is calculated as the difference between the price of a commodity and its simple moving average, divided by the normal deviation of the price. continued…