Technical Analysis

Is the procedure of studying the patterns of the financial instrument's price over time, to predict the future price.

For example if the financial instrument is a stock that is traded in wall street, the bull pattern can show to the investor that the stock price is in the upward direction and there is good probability that the price will continue to go up.  The bear pattern on the other hand will predict that the stock price is in the downward trend and would be going down in future. 

Candlestick Patterns.

A candlestick is the away of showing a stock or other financial assets price movement over time. It starts with Opening price of the day, Maximum price for the day, Minimum price of the day & closing price. The green candlestick presents that the closing price is higher than opening price, and red candlestick means the opposite. 

Candle stick patterns

Bullish chart patterns

Consolidation chart patterns

Bearish chart patterns

  • Ascending Triangles

    These formations occur when there is a slope of higher lows and a resistance level 

  • Head & Shoulders
  • Hammer or Shooting Star
  • Bullish engulfing
  • Piercing Line
  • Morning Star
  • Three white soldiers
  • Cup & Handle
  • Doji

    A doji occurs when the opening and closing prices are basically the same price, resulting in a very small body. Note that the length of the upper and lower shadows (which reflect the intra-period prices) has no effect on the closing price. The interpretation of the basic doji is that there is no clear direction for the market. This should make you wary until a stronger indication presents itself.

  • Spinning Top
  • Falling three methods
  • Rising three methods
  • Gravestone & Dragonfly Doji
  • Accumulation/Distribution indicator
  • Descending Triangles

    There is a succession of lower highs which constitute the upper line. The lower line represents the support level which the price is having difficulty breaching.

  • Inverse Hammer
  • Bearish engulfing
  • Hanging man
  • Shooting star
  • Evening star
  • Three black crows
  • Dark cloud cover

Trend Indicators

Volatility Indicators

Momentum Indicators

Volume Indicators

  • Moving Averages

    Moving averages are lagging indicators i.e. based on events that have already occurred. 

    A simple moving average is the most basic type of moving average. It is calculated by taking a series of prices, adding these together and then dividing the total by the number of data points. 

    An exponential moving average (EMA) is similar to SMA, but whereas SMA removes the oldest prices as new prices become available, an exponential moving average calculates the average of all historical ranges, starting at the point you specify.

  • Moving Averages Convergence Divergence - MACD
  • Parabolic Stop & Reverse (Parabolic SAR)
  • Bollinger Bands

    Bollinger Bands identify the degree of real-time volatility for a stock. 

    Bollinger Bands are placed over a price chart and consist of a moving average together with upper and lower bands. The area between the moving average line and each band produces a range, or channel. Bollinger Bands show relative volatility changes through the width of the bands themselves — the wider the bands, the greater the volatility.

    The area above the moving average is referred to as the buy channel as spot rates displayed in this region remain higher than the moving average and suggest upward momentum.

    Conversely, spot rates falling below the moving average are in the sell channel as the spot rate is declining more rapidly than the moving average which suggests that the exchange rate has downward momentum.

  • Average True Range
  • Standard Deviation
  • Stochastic Oscillator

    Oscillators are repetitive actions that move (or oscillate) above and below an equilibrium, and are used by analysts to provide insight into potential future market direction.

    Stochastic oscillator It has two lines. 

    • %K, also known as “stochastic fast”, tracks the current market rate for the stock.

    %K = 100 x (Closing Price - Lowest Price of N Periods) / (Highest Price of N Periods - Lowest Price of N Periods)

    • %D, known as the signal line, typically uses the last three valuations of %K to create a moving average of the %K stochastic. Because %D is a moving average of %K, it is referred to as "stochastic slow"since it reacts more slowly to market price changes than %K.

    %D = 3 – Period Moving Average of %K

    When %K crossing over %D, then its considered a buy signal. The reverse is a sell signal.

    When %K crosses the 50 line on the scale, then again its considered as a buy signal & vice versa

  • Commodity Channel Index (CCI)
  • Relative Strength Index
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