Category · 226 articles
Technical analysis
Technical analysis studies the history of price and volume to judge where a market may go next. It works on charts with three kinds of tools: the patterns price draws, the indicators computed from prices, and the chart types and scales that display them. This hub gathers all 226 technical analysis guides on the site, grouped by topic.
What has been tested
Most of technical analysis is a set of claims that can be checked against history. This site checks the pattern claims: each chart and candlestick pattern is written as a strict rule, searched for in the full history of crypto, forex, stocks, ETFs, indices and commodities, and compared with random bars of the same assets. The verdict tests the excess return over the rest of the market, and each trade is compared with the same trade on random dates. Results are corrected for the number of tests, and the whole pipeline must find no proven edge on random-walk prices before a number is published. Many well-known patterns do no better than chance on this data. See the pattern statistics table and the methodology.
Indicators, drawing tools such as Fibonacci levels and Gann angles, and theories such as Elliott waves are not measured on the test bench. Their guides describe how traders use them; some also run a rule on real bars (Bitcoin, the S&P 500 ETF, EUR/USD) and give the sample size, and those worked examples are not bench results.
Where to start
New to charts: how to read stock charts, then support and resistance and trend trading. Before trading any method, backtest it: the same idea, applied to patterns, runs the statistics on this site. To practice on charts, TradingView has drawing tools for trend lines, Fibonacci retracements, Gann fans and several patterns (affiliate link).
Start here
How to Read Stock Charts: Candles, Volume, Timeframe and LevelsHow to read a stock chart step by step: the quote, candles, volume, timeframe and log scale, then trend and levels, on real S&P 500 ETF prices.
Support and Resistance: How to Find the Levels and How Often They HoldHow to find support and resistance, and how often it held: on the S&P 500 ETF, swing lows held their first test 62.5% of the time, third and later tests 36.8%.
Head and Shoulders Pattern: How to Spot, Trade and Test ItHow to spot the head and shoulders pattern, confirm the neckline break, set the stop and target, and what 7,405 tested patterns show about its reliability.Tested against chance
Relative Strength Index (RSI): Formula, the 70 and 30 Levels, and What They Did on Real PricesOn the S&P 500 ETF, five of six RSI crosses above 70 were followed by a higher close 20 days later. Wilder's formula and what the 70 and 30 levels did.
Fibonacci Retracement: Levels, How to Draw Them and How Reliable They AreFibonacci retracement levels (23.6% to 78.6%): where the ratios come from, how to draw them by rule, and where 156 real corrections actually ended.
Backtesting: How to Test a Trading Strategy and the Pitfalls That Fake the ResultsBacktesting replays a strategy's rules on past prices. The method step by step, five pitfalls that fake results, and why the best rule came 16th of 17.
Candlestick patterns
Usually one to five candles (a few, such as the hikkake and the island reversal, span more), each tested on the bench. Grouped by type on the candlestick patterns page.
Above the Stomach Candlestick Pattern: Rules, Examples and Tested ResultsAbove the stomach candlestick rules, real examples and 62,685 daily trades tested: the 2:1 setup hit its target 37.3% of the time vs 36.5% at random.Tested against chance
Concealing Baby Swallow Candlestick Pattern: Rules, Trading and BacktestConcealing baby swallow candlestick pattern: exact rules, trade setup and backtest. Our bench finds it nowhere in the full history of any market.Tested against chance
Cradle Candlestick Pattern: Rules, Trading and Tested ResultsCradle candlestick pattern rules, real examples and a test on 3,782 daily trades: 39.4% hit 2:1 vs 35.3% on random dates, no clear edge.Tested against chance
Hammer Candlestick Pattern: A Complete Guide to Trading ReversalsHow to spot, confirm and trade the hammer candlestick, and what followed 15,363 daily hammers: no significant excess return over the rest of the market.Tested against chance
Homing Pigeon Candlestick Pattern: Rules, Trading and Tested ResultsHow to spot and trade the homing pigeon. Tested on 2,432 daily cases: 55.5% rose in 10 days, vs 54.1%, but it did not clearly beat random days.Tested against chance
Inverted Hammer Candlestick Pattern: A Complete GuideWhat the inverted hammer candlestick is, how to confirm it and how it did: on 3,241 daily trades, the 2:1 setup did not clearly beat random dates.Tested against chance
Ladder Bottom Candlestick Pattern: Definition, Trading Rules and Tested ResultsRules, psychology and trade setup of the ladder bottom. Tested on 44 daily cases: 54.5% rose 10 days later, against 54.3% for random days on the same assets.Tested against chance
Matching Low Candlestick Pattern: Rules, Trading and Tested ResultsHow to spot and trade the matching low candlestick pattern. Tested on 1,844 daily cases: 53.3% were higher 10 days later, vs 54.2% for random days.Tested against chance
Morning Star Candlestick Pattern: How to Identify and Trade ItHow to identify the morning star candlestick pattern, confirm it and trade it, with test results on 3,039 daily occurrences against random dates.Tested against chance
Piercing Line Candlestick Pattern: How to Spot It, Trade It and What the Data ShowsHow to spot and trade the piercing line candlestick pattern. On 2,320 daily trades, 36.6% hit a 2:1 target vs 35.6%: it did not clearly beat random dates.Tested against chance
Stick Sandwich Candlestick Pattern: Rules, Trading and Tested ResultsStick sandwich candlestick pattern: rules and tests. On US stocks, 40.5% of trades hit a 2:1 target vs 34.8% on random dates, a gap that is not significant.Tested against chance
Takuri Candlestick Pattern: Definition, Trading Rules and Tested ResultsTakuri candlestick pattern tested on 10,013 daily cases: 50.6% were up 10 days later, vs 53.3% for random days. Rules, entry, stop, target, real examples.Tested against chance
Three Stars in the South Candlestick Pattern: Rules, Trading and Real DataHow to spot and trade the three stars in the south candlestick pattern. Our bench found only a handful of cases on all markets: too few to measure any edge.Tested against chance
Three White Soldiers Candlestick Pattern: Rules, Trading and Tested ResultsThree white soldiers: definition, entry, stop and real examples. Of 257 daily cases, 49.8% rose over 10 days vs 53.5% of random bars.Tested against chance
Unique Three River Candlestick Pattern: Rules, Trading and Tested ResultsHow to spot and trade the unique three river candlestick pattern. Tested on 97 daily cases, it did not clearly beat random days: no measurable edge.Tested against chance
Advance Block Candlestick Pattern: Meaning, Trading and Tested ResultsThe advance block warns that a rally is fading. On 2,212 daily cases, 45.5% were lower 10 days later, vs 45.4% for random bars: no clear edge.Tested against chance
Dark Cloud Cover Candlestick Pattern: How to Spot It, Trade It and What the Data ShowsDark cloud cover candlestick pattern: rules, trade setup, real data. On 3,989 daily trades, the 2:1 short hit its target 26.4% of the time vs 27.7% at random.Tested against chance
Evening Star Candlestick Pattern: How to Spot It, Trade It and What the Data ShowsEvening star candlestick pattern: rules, entry, stop and examples. On 4,193 daily cases, 46.9% fell over 10 days, vs 45.1% for random days: no clear edge.Tested against chance
Hanging Man Candlestick Pattern: Meaning, Confirmation and Tested ResultsThe hanging man candlestick pattern: shape, confirmation, entry and stop-loss, and how 20,443 daily cases compared with random days on the same assets.Tested against chance
Identical Three Crows Candlestick Pattern: How to Identify, Trade and Test ItThree black candles, each opening at the prior close. On 420 daily cases, 52.4% fell over 10 bars, vs 49.0% for random bars: no clear edge over the market.Tested against chance
Ladder Top Candlestick Pattern: Structure, Trading Rules and Tested ResultsRules, psychology and trade setup of the ladder top. On 86 daily cases, 47.7% fell 10 days later, vs 45.1% for random days: no clear edge.Tested against chance
Shooting Star Candlestick Pattern: A Complete Guide to Trading ReversalsHow to identify and trade the shooting star candlestick pattern, and how it really performed on 16,646 daily occurrences compared with random days.Tested against chance
Three Black Crows: How to Identify, Trade and Test the PatternThree black crows: three long red candles after an uptrend. On 448 daily trades, 22.1% of 2:1 shorts hit the target, vs 26.0% on random dates: no clear edge.Tested against chance
Two Crows Candlestick Pattern: Rules, Trading and Test ResultsTwo crows: a white candle, a gap up, two black candles. On 188 daily trades, the 2:1 short hit 27.1% of targets vs 23.3%: it did not clearly beat random dates.Tested against chance
Upside Gap Two Crows Candlestick Pattern: Rules, Trading and Test ResultsUpside gap two crows: two black candles above an open gap. On 34 daily occurrences, 47.1% were lower 10 days later, vs 44.9% for random days.Tested against chance
Abandoned Baby Candlestick Pattern: Rules, Trading and Tested ResultsA rare doji isolated by two gaps. Our bench finds only 20 bullish and 21 bearish daily cases: the rule, real examples, and why that is too few to judge.Tested against chance
Belt Hold Candlestick Pattern: Bullish and Bearish Rules, Tested on Real DataBelt hold candlestick pattern: definition and trade rules. Of 92,237 daily bullish belt holds, 53.4% were higher 10 days later, vs 53.5% of random days.Tested against chance
Breakaway Candlestick Pattern: Rules, Trading and Tested ResultsBreakaway candlestick pattern rules, setup and tested data: on 40 bullish daily trades, 25.0% hit 2:1 vs 29.5% at random: no clear edge.Tested against chance
Counterattack Candlestick Pattern: Bullish and Bearish Rules, Trading and Tested ResultsBullish and bearish counterattack candlestick pattern: rules, trade setup, real data. 108 bullish daily trades: 34.3% hit 2:1 vs 33.9% at random: no clear edge.Tested against chance
Doji Star Candlestick Pattern: A Complete Trading GuideDoji star: both versions and trade rules. On 1,839 daily trades, the bullish setup hit 37.7% of 2:1 targets vs 36.7%: it did not clearly beat random dates.Tested against chance
Engulfing Candle Pattern: How to Identify and Trade Bullish and Bearish EngulfingWhat an engulfing candle is, how to trade it, and our test of 48,554 daily bullish trades: 36.9% hit a 2:1 target, vs 35.7% on random dates: no clear edge.Tested against chance
Harami Candlestick Pattern: Bullish and Bearish Rules, Trading and Tested ResultsBullish and bearish harami: rules, entry, stop, target. On 13,897 daily bullish trades, 36.8% hit the 2:1 target, vs 36.3% at random: no clear edge.Tested against chance
Harami Cross Candlestick Pattern: Bullish and Bearish Rules, Trading and Tested ResultsBullish and bearish harami cross: rules, entry, stop, target. On 4,881 daily bullish trades, 36.0% hit the 2:1 target, vs 36.2% at random: no clear edge.Tested against chance
Hikkake Pattern: How to Identify and Trade the Inside Bar False BreakoutHikkake pattern: inside bar false breakout rules, entry and stop. Of 27,413 daily bullish hikkakes, 51.6% were higher 10 days later, vs 53.0% of random days.Tested against chance
Island Reversal Pattern: How to Spot It, Trade It and What the Data ShowsAn island reversal is a cluster isolated by two price gaps. How to spot and trade it, and what our bench found on daily charts against random days.Tested against chance
Key Reversal Bar Pattern: How to Spot It, Trade It and What the Data ShowsKey reversal bar pattern rules, entry and stop. On 19,070 daily bull trades, 38.4% hit a 2:1 target vs 36.0%: it did not clearly beat random dates.Tested against chance
Kicking Candlestick Pattern: How the Kicker Works and What Our Tests ShowTwo opposite marubozu split by a gap. Our bench found only 14 bullish and 22 bearish daily cases in all of market history: too few to judge.Tested against chance
Modified Hikkake Candlestick Pattern: Rules, Examples and Tested ResultsModified hikkake rules and stop, tested on 223 daily bullish cases: 56.1% were higher 10 days later, vs 53.4% of random days: no clear edge.Tested against chance
Stalled Candlestick Pattern: Meaning, Trading and Tested ResultsStalled pattern: two long white candles, then a short one. On 2,819 daily cases, the asset lagged its market by 0.47% over 10 days, rated proven edge.Tested against chance
Three Inside Up Candlestick Pattern (and Three Inside Down): How to Trade It and What the Data ShowsHow the three inside up and down form, how to trade them, and our test: 54.0% of 6,665 daily cases were higher 10 days later, vs 54.2% on random dates.Tested against chance
Three Outside Up Candlestick Pattern: Definition, Trading Rules and Tested StatisticsHow to spot and trade the three outside up. On 9,864 daily trades, its 2:1 setup did not clearly beat random dates.Tested against chance
Tri-Star Candlestick Pattern: Bullish and Bearish Setups TestedThe tri star candlestick pattern is three dojis, the middle one gapped. On 389 bullish daily cases, 54.5% rose in 10 days, vs 54.2% for random days.Tested against chance
Downside Gap Three Methods Candlestick Pattern: Rules, Trading and Real StatisticsDownside gap three methods: rules, short setup and real tests. On 67 daily cases, 53.0% fell 10 days later, against 45.0% for random days.Tested against chance
In Neck Candlestick Pattern: How to Spot It, Trade It and What the Data ShowsHow to spot and trade the in neck candlestick pattern. Tested on 374 daily trades: 32.4% hit a 2:1 target, vs 27.1% on random dates: no clear edge.Tested against chance
Mat Hold Candlestick Pattern: Rules, Trading and Tested ResultsMat hold candlestick pattern: rules, real examples and how to trade it. Of 29 daily trades, 20.7% hit a 2:1 target, vs 31.0% on random dates.Tested against chance
On Neck Candlestick Pattern: How to Spot It, Trade It and What the Data ShowsHow to spot and trade the on neck candlestick pattern. Tested on 436 daily trades: 27.1% hit a 2:1 target, vs 24.2% on random dates.Tested against chance
Rising Three Methods Candlestick Pattern (and Falling Three Methods): Rules, Trading and Tested ResultsRising three methods candlestick pattern: rules and the falling version. On 93 daily trades, the 2:1 trade hit its target 29.0% of the time vs 39.1% at random.Tested against chance
Separating Lines Candlestick Pattern: Rules, Examples and Tested ResultsSeparating lines on daily charts: over 212 trades, the bullish 2:1 setup hit its target 42.0% of the time vs 37.8% at random, a gap within noise.Tested against chance
Side-by-Side White Lines Candlestick Pattern: Rules, Examples and Tested ResultsSide-by-side white lines rules, tested on 249 daily up-gap cases: 56.5% rose in 10 days vs 55.0% of ordinary days, yet no clear edge.Tested against chance
Tasuki Gap Candlestick Pattern: Rules, Examples and Tested ResultsTasuki gap rules, tested on 560 bullish and 364 bearish daily cases. On 325 bullish trades, the 2:1 target was hit 37.8% vs 37.9% at random.Tested against chance
Three Line Strike Candlestick Pattern: Rules, Trading and Tested ResultsThe three line strike on hourly crypto: the bearish setup hit its 2:1 target 31.3% of the time against 24.1% on random dates. Is it an edge?Tested against chance
Thrusting Candlestick Pattern: How to Spot It, Trade It and What the Data ShowsThrusting candlestick pattern: rules, trade setup, real data. On 3,429 daily trades, the 2:1 short hit its target 25.2% of the time vs 26.4% at random.Tested against chance
Upside Gap Three Methods Candlestick Pattern: Rules, Trading and Real StatisticsUpside gap three methods: rules, trade setup and real tests. On 56 daily cases, 53.6% rose 10 days later, against 54.4% for random days.Tested against chance
Black Candlestick Pattern: Meaning, Types and What the Data ShowsWhat a black candle means, how to read it and which patterns use it. Of 3.6 million daily black candles, 45.8% were lower 10 days later, vs 46.3% at random.Tested against chance
Closing Marubozu Candlestick Pattern: Definition, Trading Rules and Tested ResultsClosing marubozu: definition, trading rules and real data. Of 370,811 daily white ones, 52.8% were higher 10 bars later, vs 54.1% for random bars.Tested against chance
Doji Candlestick: Types, Meaning and How to Trade ItWhat is a doji candlestick? Learn to identify its five types, read indecision in context and see how the doji setup did on 1.2 million daily occurrences.Tested against chance
Dragonfly Doji: Meaning, How to Trade It and What the Data ShowsDragonfly doji: definition, how to spot and trade it. On 58,832 daily trades, its breakout hit a 2:1 target 35.5% of the time vs 35.0% at random.Tested against chance
Gravestone Doji: Meaning, Formation, and What the Data ShowsHow to identify the gravestone doji candlestick pattern, confirm it and trade it, with test results on 49,807 daily occurrences against random dates.Tested against chance
High Wave Candle: Meaning, How to Trade It and What the Data ShowsHigh wave candle: small body, two long shadows. On 788,323 daily trades, its setup hit a 2:1 target 33.6% of the time, vs 33.4% at random: no clear edge.Tested against chance
Long Line Candlestick Pattern: Definition, Trading Rules and Tested ResultsLong line candlestick: definition, trading rules and real data. Of 402,234 daily white ones, 53.2% were higher 10 bars later, vs 54.0% for random bars.Tested against chance
Long-Legged Doji: Meaning, How to Trade It and What the Data ShowsLong legged doji: definition, how to spot it and trade its breakout. On 100,256 daily trades, the 2:1 target was hit 33.2% of the time, as on random dates.Tested against chance
Marubozu Candlestick Pattern: A Complete Guide to Trading the SignalMarubozu candlestick: definition, types and trade rules. Of 145,183 daily white marubozu candles, 52.7% were higher 10 days later, vs 54.2% of random days.Tested against chance
Rickshaw Man Candlestick Pattern: Definition, Trading and What the Data ShowsRickshaw man: a doji with long, equal shadows. On 45,703 daily trades, its breakout hit a 2:1 target 33.0% of the time, almost exactly as on random dates.Tested against chance
Short Line Candlestick Pattern: Meaning, Trading Rules and Tested ResultsShort line candle: definition, how to spot and trade it. On 348,938 daily bearish trades, the 2:1 target hit 29.4% vs 29.1% at random: no measurable gap.Tested against chance
Spinning Top Candlestick Pattern: Meaning, Trading Rules and Tested ResultsWhat a spinning top candle means, how to trade its break, and how 787,847 daily trades did: the 2:1 setup did not clearly beat random days.Tested against chance
Chart patterns and other setups
Classic shapes built from swing points, and setups traders name on their own, each tested on the bench. See classic patterns and the patterns hub.
Cup and Handle Pattern: How to Identify, Trade and Test ItHow to spot a cup and handle pattern, set the entry, stop and target, and what 798 daily patterns since 1981 show about its reliability.Tested against chance
Diamond Pattern: How to Spot and Trade Diamond Tops and BottomsLearn to spot the diamond pattern, draw its four lines and trade the breakout, with test results on 2,059 daily breakouts compared with random days.Tested against chance
Double Bottom Pattern: Definition, Structure and Trading StrategiesHow to identify a double bottom pattern, trade the neckline breakout and set a stop, with our test of 6,422 daily double bottoms against random dates.Tested against chance
Double Top Pattern: A Complete Guide to Identification and TradingHow to spot, confirm and trade the double top pattern, and what our test of 7,951 daily double tops found when compared with random dates on the same assets.Tested against chance
Failed Head and Shoulders Pattern: Why It Happens and What the Data ShowsWhy a head and shoulders top fails and how traders play it. Our test: 53.7% of 5,567 daily failures rose in 10 days vs 54.3% at random: no better than chance.Tested against chance- Head and Shoulders Pattern: How to Spot, Trade and Test ItHow to spot the head and shoulders pattern, confirm the neckline break, set the stop and target, and what 7,405 tested patterns show about its reliability.Tested against chance
Inverse Head and Shoulders Pattern: A Complete Guide to Trading Bullish ReversalsLearn to spot the inverse head and shoulders pattern, draw the neckline and trade the breakout, with test results on 5,968 daily breakouts compared with chance.Tested against chance
Triple Bottom Pattern: How to Identify and Trade It, With Real StatisticsHow to spot a triple bottom and trade the breakout. On 1,989 daily trades, its 2:1 trade hit the target 18.6% of the time, vs 20.4% on random dates.Tested against chance
Triple Top Pattern: How to Identify and Trade It, With Real StatisticsHow to spot a triple top and trade the neckline break. On 2,301 daily trades, its 2:1 short hit the target 9.4% of the time, vs 11.0% on random dates.Tested against chance
V Pattern Trading: How to Spot, Trade and Test V-Shaped ReversalsV pattern tested on 4,689 daily V-bottoms: 54.2% were up 10 days later, vs 54.1% for random days, but they lagged their market. Rules, entry, stop, examples.Tested against chance
Ascending Triangle Pattern: A Complete Guide to Identifying and Trading ItHow to identify and trade the ascending triangle, and which way it really broke: 4,116 daily breakouts went down, 3,026 up, a tilt random prices show too.Tested against chance
Broadening Top Pattern: How to Identify and Trade the MegaphoneHow to spot a broadening top and trade its breakout. On 959 daily upward breakouts, 49.8% were higher 10 days later, vs 54.3% for random days.Tested against chance
Descending Triangle Pattern: How to Identify, Trade and Test ItDescending triangle: how to trade it, and what 7,372 daily breakouts did. Only 32.3% broke down, and neither side showed an edge that survives our correction.Tested against chance
Falling Wedge Pattern: How to Identify and Trade It, With Tested ResultsHow to spot and trade a falling wedge pattern, and our test of 4,640 daily upside breakout trades: the 2:1 setup did not clearly beat random dates.Tested against chance
Rising Wedge Pattern: How to Identify, Trade and Analyze ItHow to identify and trade a rising wedge, and which way it really breaks: tested on daily charts of stocks, crypto, forex, ETFs, indices and commodities.Tested against chance
Symmetrical Triangle Pattern: How to Identify, Trade and Test ItHow to identify and trade a symmetrical triangle pattern. On 5,611 daily upside-breakout trades, the 2:1 setup did not clearly beat random dates.Tested against chance
Channel Pattern: How to Identify, Draw and Trade Price ChannelsHow to spot and trade channels. 8,725 trades on upside breaks of daily falling channels hit a 2:1 target 20.4% of the time, vs 21.1% for random dates.Tested against chance
Flag Pattern: How to Identify and Trade Bull and Bear FlagsHow to identify and trade the flag pattern, bull and bear, with entry, stop and target rules, and our test of daily flags against random dates.Tested against chance
Pennant Pattern: How to Identify and Trade Bullish and Bearish PennantsBull and bear pennant: how to spot the pole and the small triangle, where to enter, stop and target, and how 754 bullish daily breakouts did against chance.Tested against chance
Rectangle Pattern: How to Trade the Range and Its BreakoutWhat a rectangle pattern is, how to trade its breakout, and what 5,367 daily breakouts showed: the 2:1 trade did about as well as on random dates.Tested against chance
Bart Simpson Pattern: What It Is, Why It Forms and How to Trade ItA spike, a flat plateau, a sharp move back: how to spot the Bart Simpson pattern, trade the plateau break, and what our test found on six markets.Tested against chance
Cat Ears Pattern: How to Identify and Trade ItCat ears pattern: six phases, entry, stop, target. On 149 daily trades, the short hit its 2:1 target 16.1% of the time, vs 17.9% on random dates.Tested against chance
Dead Cat Bounce: Definition, Causes and How to Trade ItA dead cat bounce is a temporary recovery in a falling market. Learn to identify it, tell it from a true reversal and manage the risk of acting too early.Tested against chance
First Green Day Pattern: How to Trade It and What the Data ShowsFirst green day rules: spotting it, entry and stop. Tested on 6,427 US stock setups after a run and three red days: no edge over random days.Tested against chance
Flat Top Breakout Pattern: How to Identify and Trade It, and What the Data ShowsFlat top breakout: how to spot the flat resistance, where to put entry, stop and target, and how 7,946 tested daily breakouts compared with random dates.Tested against chance
J Hook Pattern: How to Identify and Trade the J-Hook SetupHow to spot and trade the J hook pattern. On 61,901 bullish daily trades, the 2:1 setup did not clearly beat random dates.Tested against chance
Parabolic Chart Pattern: How to Identify and Trade a Parabolic CurveWhat a parabolic chart is, its three phases and how to manage risk. Tested on 3,815 daily setups, the short showed no edge that survives our correction.Tested against chance
Volatility Contraction Pattern (VCP): How to Identify and Trade ItThe volatility contraction pattern (VCP): rules, pivot, entry and stop-loss. On 8,745 US stock setups, the 2:1 trade did no better than random dates.Tested against chance
Wolfe Wave: Rules, Targets and How to Trade ItWolfe wave rules, a worked example, entry at point 5 and the 1-4 target line. Our test: no proven edge over random dates on daily charts.Tested against chance
Harmonic patterns
Fibonacci-based swing structures, each tested on the bench. See harmonic patterns.
5-0 Harmonic Pattern: Rules, Ratios and How to Trade It5-0 harmonic pattern rules (B at 1.13 to 1.618 of XA, C at 1.618 to 2.24 of AB, D at 0.50 of BC), a worked example, entry, stop, targets and reliability.Tested against chance
Alternate Bat Harmonic Pattern: Rules, Ratios and How to Trade ItAlternate bat pattern rules (B at 0.382 or less, D at 1.13 of XA), a worked example, entry, stop, targets and our test: no proven edge, only small flagged rows.Tested against chance
Bat Harmonic Pattern: Rules, Ratios and How to Trade ItBat harmonic pattern rules (B at 0.382 to 0.50, D at 0.886 of XA), an example, stop, targets and our test: no confirmed edge on the trade or the 10-bar move.Tested against chance
Butterfly Pattern Trading: Rules, Ratios and How to Trade ItButterfly pattern rules: B at 78.6% of XA, D at the 1.272 extension of XA, a worked example, entry, stop, targets and our test: no clear edge on daily charts.Tested against chance
Crab Harmonic Pattern: Rules, Ratios and How to Trade ItCrab harmonic pattern rules: B at 0.382 to 0.618 of XA, D at the 1.618 extension beyond X, the deep crab, stop and targets, and our test: no clear edge.Tested against chance
Cypher Pattern: Rules, Ratios and How to Trade ItCypher pattern rules (B at 0.382 to 0.618 of XA, D at 0.786 of XC), a worked example, stop and targets, and our test: no edge on daily charts.Tested against chance
Gartley Pattern: Rules, Ratios and How to Trade ItGartley pattern rules (B at 0.618 and D at 0.786 of XA), a worked example, entry, stop, targets and our test: no clear daily edge over random dates overall.Tested against chance
Shark Harmonic Pattern: Rules, Ratios and How to Trade ItShark harmonic pattern: C beyond A, D at 0.886 to 1.13 of XC. Entry, stop, targets, a worked example, and our test on every timeframe: no proven edge.Tested against chance
XABCD Pattern: How to Draw, Read and Trade ItXABCD pattern rules: where B and D sit for the Gartley, Bat, Butterfly and Crab, a worked example, entry, stop and targets, and our test: no daily edge.Tested against chance
ABCD Harmonic Pattern: Rules, Ratios and How to Trade ItABCD harmonic pattern rules: C at 0.382 to 0.886 of AB, CD equal to AB, a worked example, stops, targets and our test: one narrow confirmed edge.Tested against chance
Three Drives Pattern: Structure, Fibonacci Rules and How to Trade ItThree drives pattern: structure, Fibonacci ratios, entry, stop and exits. On 539 bearish daily trades, the 2:1 setup did not clearly beat random dates.Tested against chance
Trend indicators
Moving averages and trend filters that show the direction of the move. An indicator that belongs to two families is listed once here; the full family is on the trend indicators page.
ALMA Indicator: Arnaud Legoux Moving Average Formula, the 9, 0.85, 6 Settings and How It ComparesALMA puts about 52% of its weight on the two newest bars of a 9-bar window: the formula, the 9, 0.85, 6 settings, and how it tracked Bitcoin vs the EMA.
Aroon Indicator: Formula, Aroon Up and Down, Settings and a Real Bitcoin ExampleAroon counts the bars since the 25-bar high and low. The formula, how to read Aroon Up and Down, and what crosses did on Bitcoin and the S&P 500.
Balance of Power Indicator (BOP): Formula, Raw vs 14-Bar Signals and the Gap ProblemLivshin's Balance of Power scores each bar from −1 to +1 as (close − open) / (high − low). Raw vs 14-bar signals, and why gaps fool it on stocks.
Chande Kroll Stop: Formula, the Two Sets of Settings, and a Daily Bitcoin ExampleTushar Chande and Stanley Kroll’s volatility stop, from the book that introduced it: how its two lines come from the highest high, the lowest low and the…
Detrended Price Oscillator (DPO): Formula, Cycle Length and the Real-Time Lag TrapThe Detrended Price Oscillator compares each price with a centered moving average: the formula, why it stops 11 bars early, and the cycles it measured.
Directional Movement Index (DMI) and ADX: Wilder's Formula, How to Read +DI, −DI and ADX, and a Test on Real PricesThe Directional Movement Index has three lines: +DI, −DI and the ADX. Wilder's formula, how to read them, and a test of DI crossings with an ADX filter.
Envelope Channel Indicator: Moving Average Envelope Formula, the Right Percentage, and Real ExamplesA moving average envelope puts two bands a fixed percent around an average. Which percent fits, and why Bitcoin's first close above it began a 25% rise.
Gann HiLo Activator: How It Works, Its Settings and What the Flips Did on Real ChartsThe Gann HiLo Activator flips between an average of highs and of lows. Why 3 bars flip too often, and what its flips did on Bitcoin and the S&P 500 ETF.
Hull Moving Average (HMA): Alan Hull's Formula, Its Lag Measured, and a Test of Its Turning Points on Real PricesA 20-bar Hull moving average lagged 3 bars, a simple one 10, but on Bitcoin price crossed it nearly twice as often. Hull's formula and a test of its turns.
Ichimoku Cloud: The Five Lines, the 9/26/52 Settings and Every TK Cross on BitcoinEvery TK cross on weekly Bitcoin since 2019: all 4 bearish crosses above the cloud were followed by a rise. The five Ichimoku lines and 9/26/52 settings.
Mass Index Indicator: Dorsey's Formula, the 27/26.5 Reversal Bulge and What FollowedDorsey's Mass Index bulge, above 27 then below 26.5, gives no direction. Every bulge on Bitcoin, the S&P 500 ETF and 1987, and what the price did next.
McGinley Dynamic Indicator: Formula, Settings and a Test Against the EMA in 1987In the 1987 crash the McGinley Dynamic stayed 4.34% from the close, a 20-day EMA 7.14%, but the EMA was closer in the rise. Formula and N setting.
Moving Average Crossover: Golden Cross and Death Cross on the S&P 500 Since 1970, and Three Pairs ComparedEvery golden cross of the S&P 500 since 1970, what followed, and how the 9/21, 20/50 and 50/200 rules did against holding the index.
Moving Average Indicator: SMA, EMA, WMA and Hull Compared, With Their Lag Measured on Real PricesA 20-bar SMA lagged about 10 bars on real prices, an EMA 6 to 7, a Hull 3, and the faster ones mostly crossed more often. The main moving averages compared.
Parabolic SAR: Wilder's Formula, Settings, and What the Stop and Reverse Rules Did on Real PricesWilder's Parabolic SAR as stop and reverse: it beat holding on falling Bitcoin, lost money on the rising S&P 500 ETF. Formula, settings, recent Bitcoin trades.
Pivot Point Indicator: Formulas for 5 Versions and How Often R1 and S1 Get TouchedStandard, Fibonacci, Woodie, Camarilla and DeMark pivots on one real day, and how often price touched R1 (54.7%) and S1 (43.6%) on the S&P 500 ETF.
Polarized Fractal Efficiency (PFE): Formula, Reading as a Trend Filter, and an S&P 500 ExamplePFE compares the straight line price traveled over ten bars with the path it took. The formula, why its scale depends on price, and a year of S&P 500 data.
Rainbow Charts: Mel Widner’s Ten Moving Averages, Not the Bitcoin Rainbow ChartMel Widner’s Rainbow Charts explained: ten recursive moving averages, how to read their order and spread, and how they differ from the Bitcoin rainbow chart.
Rainbow Oscillator: Formula, Rainbow Bandwidth and a Daily Bitcoin ExampleRainbow Oscillator: Mel Widner's formula, the rainbow bandwidth, how to read both lines, and what they showed on daily Bitcoin in 2026.
Relative Momentum Index (RMI): Formula, Settings and How It Compares With the RSIThe RMI is the RSI computed on changes over several days. On 534 daily Bitcoin bars, RMI(14, 5) spent 135 bars above 70, against 29 for the RSI(14).
Relative Vigor Index (RVI): Formula, Signal Line and a Cross Test Against the RSITraded on every signal-line cross, the Relative Vigor Index lost 32.98% on daily Bitcoin and 39.95% on the S&P 500 ETF. Ehlers' formula and the full test.
Schaff Trend Cycle (STC) Indicator: Formula, Settings and the 25/75 Rules on Real DataThe Schaff Trend Cycle (STC) passes a 23/50 MACD twice through a stochastic. Exact formula, settings, the 25/75 rules and how they fared on real daily data.
STARC Bands (Stoller Average Range Channels): Formula, Settings, and Every Band Break on Real PricesSTARC Bands put a 6-bar average inside bands two ATRs wide. Formula, settings, and every close outside the bands on real daily prices, with what happened next.
Trend Intensity Index (TII): Formula, the 80 and 20 Rules, and an Example on Real PricesThe Trend Intensity Index: share of 30 closes' deviation above a 60-bar average, Pee's 80 and 20 stop-and-reverse rules, and every trade on daily Bitcoin.
Trendlines: What They Are, How to Draw Them and How to Trade a BreakHow to draw a trendline by rule, why linear and log charts broke the same Bitcoin line nine days apart, and how to trade a break without chasing wicks.
VWMA Indicator: Volume-Weighted Moving Average Formula, VWMA vs SMA and VWMA vs VWAPThe VWMA weights each close by its volume. Formula, VWMA vs SMA and vs VWAP, and the 4.29% gap on Bitcoin in 2026 that followed a day of triple volume.
Williams Alligator Indicator: Formula, How to Read the Jaw, Teeth and Lips, the Gator Oscillator, and a Test on Real PricesThe Williams Alligator: three shifted, smoothed averages of the median price, how to read it, the Gator Oscillator, and a test that lost 21.31% on Bitcoin.
Williams Fractal Indicator: The Five-Bar Rule, the Two-Bar Delay and a Bitcoin ExampleWilliams fractals mark a high or low with two weaker bars on each side: the five-bar rule, why they appear two bars late, and how Williams filters them.
T-Line Trading: The 8-Day EMA Rule, How It Is Read and How It DidThe T-Line is the 8-day EMA with a stay-long-while-it-closes-above rule. Its formula, how it is read, and how the rule did on the S&P 500 ETF and Bitcoin.
Momentum indicators
Oscillators that measure the speed of price changes, often read as overbought or oversold levels. An indicator that belongs to two families is listed once here; the full family is on the momentum indicators page.
Accelerator Oscillator (AC): Formula, Color Rules, and Every Signal on Hourly BitcoinBill Williams's Accelerator Oscillator: the AO minus its 5-bar average, the green and red bar rules, and every signal on 250 hours of Bitcoin.
Awesome Oscillator (AO): Formula, the Saucer and Twin Peaks, and the Zero Line on Real PricesBill Williams's Awesome Oscillator: the formula, the zero line cross, saucer and twin peaks, and a zero line rule that won 4 of 9 trades on Bitcoin.
Chaikin Money Flow (CMF): Formula, Zero Line and Buffers, and a Real S&P 500 ExampleAfter bearish Chaikin Money Flow readings, the S&P 500 ETF rose 68.0% of the time over 20 days, vs 64.8% after bullish ones. Formula, zones, a real chart.
Chaikin Oscillator: Formula, How It Differs From Chaikin Money Flow, and a Real DivergenceThe Chaikin Oscillator is the 3-day minus 10-day EMA of the accumulation/distribution line. Formula, how it differs from Chaikin Money Flow, and real signals.
Chande Momentum Oscillator (CMO): Formula, CMO vs RSI, and Every Signal on BitcoinAbove +50 is overbought, below -50 oversold, yet three of four such entries on Bitcoin kept going. Chande Momentum Oscillator formula, RSI link, signals.
Commodity Channel Index (CCI): Formula, the ±100 Levels, and Two Opposite Strategies on Real PricesIs ±100 on the CCI a signal or a scaling choice? Lambert's formula, then a trend rule and a reversion rule tested on Bitcoin and the S&P 500 ETF over a year.
Disparity Index: Formula, How to Read It, Settings and a Real S&P 500 ExampleThe disparity index is the gap between close and moving average. On the S&P 500 since 1970, its highest readings preceded more gains, not pullbacks.
Know Sure Thing (KST) Indicator: Pring's Formula, Settings by Timeframe and Real ChartsPring's KST sums four smoothed rates of change: his settings by timeframe, and monthly sells on the S&P 500 ETF, 6 of 7 since 2005 bought back higher.
MACD Indicator: Formula, What 12, 26, 9 Means, and the Signal Line Rule on Real PricesBuying every MACD signal line cross on a year of the S&P 500 ETF won 3 of 11 trades: +6.85% vs +14.83% for holding. The formula and 12, 26, 9 explained.
McClellan Oscillator: Formula, Worked Example, A/D Line and TRINThe McClellan Oscillator is a MACD of market breadth: the 19-day minus the 39-day EMA of net advances, worked step by step, with the A/D line and TRIN.
Momentum Indicator (MOM): Formula, Zero Line, MOM vs ROC, and a Real S&P 500 ExampleMomentum (MOM) is the close minus the close 12 bars earlier: the formula, the zero line, MOM vs ROC, and the zero-line rule on the S&P 500 since 1970.
Money Flow Index (MFI): Formula, 80 and 20 Levels, MFI vs RSI, and a Real S&P 500 ExampleMFI is a volume-weighted RSI. On the S&P 500 ETF since 1993 it hit 80 or 20 ten times as often as RSI, and overbought readings were followed by more rises.
Percentage Price Oscillator (PPO): Formula, and Why It Beats the MACD Across PricesThe PPO is the MACD divided by the slow average. On the monthly S&P 500 ETF, the MACD of December 2018 was twice that of October 2007; the PPO was lower.
Rate of Change (ROC) Indicator: Formula, Readings on Two Markets and the Coppock CurveThe Rate of Change is the percent change over n bars. Its zero line and ±10 levels on two markets, and every Coppock Curve signal since 1995.- Relative Strength Index (RSI): Formula, the 70 and 30 Levels, and What They Did on Real PricesOn the S&P 500 ETF, five of six RSI crosses above 70 were followed by a higher close 20 days later. Wilder's formula and what the 70 and 30 levels did.
Stochastic Momentum Index (SMI): Formula, Settings and a Test Against the StochasticWilliam Blau's SMI double-smooths the close's distance from its range midpoint. Its 10, 3, 3 settings, and why it gave fewer whipsaws than the stochastic.
Stochastic Oscillator: Fast, Slow and Full Formulas, and the 80 and 20 Levels on Real PricesFast, slow and full stochastic formulas, and what the 80 and 20 zones did on real prices: after 8 bullish crosses under 20, Bitcoin was higher 4 times.
Stochastic RSI: Formula, RSI vs Stochastic, and Every Signal on Bitcoin Over 250 DaysStochRSI applies the stochastic formula to RSI. On Bitcoin it spent 143 of 250 days overbought or oversold, against 24 for the RSI. What came next.
TRIX Indicator: Formula, Signal Line, TRIX vs MACD, and a Real Bitcoin ExampleTRIX: Jack Hutson’s percent change of a triple-smoothed EMA, its signal line, TRIX vs MACD, and what its zero line did on the S&P 500 since 1971.
Williams %R Indicator: Formula, Overbought and Oversold Levels, and a Real S&P 500 ExampleWilliams %R places the close in its 14-bar range, from 0 to −100. On the S&P 500 ETF it stayed overbought 20 days in a row while the price rose 10.7%.
Volatility indicators
Bands, channels and ranges that measure how far price moves. An indicator that belongs to two families is listed once here; the full family is on the volatility indicators page.
Average True Range (ATR): Formula, ATR Percent by Market, and How Often ATR Stops Get HitATR turns gaps and ranges into one volatility number: 0.68% a day on EUR/USD, 4.87% on Ether. The formula, and how often 1 to 3 ATR stops were hit.
Bollinger Bands: Formula, Settings, and What Closes Outside the Bands Did on Real PricesBollinger said about 90% of closes stay inside the bands. On six markets we found 86.4% to 91.0%, and measured what fading the bands did over the years.
Bollinger BandWidth and %B: Formulas, How to Read Them, and the SqueezeBollinger %B shows where price sits inside the bands and BandWidth how wide they are: the formulas, how to read them, the Squeeze and a measured example.
Choppiness Index (CHOP): Formula, the 61.8 and 38.2 Levels, and a Real Bitcoin ExampleE.W.
Donchian Channel: Formula, Turtle Rules, and a Breakout Test on Five MarketsDonchian breakouts tested on five markets: smaller drawdowns than buy and hold on all five, a better return on only two. The rules, Turtle exits and charts.
Implied Volatility (IV): How It Is Found, Historical Volatility, the VIX, and 36 Years of Implied vs RealizedFrom 1990 to 2026 the VIX priced more volatility than the S&P 500 then delivered on 85.3% of days. What IV is, how it is solved, and its biggest miss.
Keltner Channel: Formula, Settings, and Whether a Break Means Trend or ReversalKeltner channels set ATR-wide lines around a 20-day EMA. The formula, how often closes fall outside, and what breaks did next on four markets.
Relative Volatility Index (RVI): Dorsey’s Formula, the 50 Line, and How It Compares With RSIDorsey's RVI runs RSI arithmetic on standard deviation. As a filter on S&P 500 ETF trend signals since 1993, RVI above 50 did not improve the next 10 days.
TTM Squeeze Indicator: Formula, Settings, Thinkorswim and What 292 Squeezes DidTTM Squeeze: John Carter’s Bollinger Bands inside Keltner Channels, the formula, settings, thinkorswim inputs, and what 292 S&P 500 squeezes did after firing.
Chandelier Exit: Formula, Settings and a Test of 2, 3 and 4 ATRThe Chandelier Exit hangs 3 ATR below the 22-bar high. Formula, how to use it, and a test of multipliers 2, 3 and 4 on Bitcoin, the S&P 500 ETF and EUR/USD.
Volume indicators
Indicators built on traded volume, and the depth of market. An indicator that belongs to two families is listed once here; the full family is on the volume indicators page.
Accumulation Distribution Line: Formula, How to Read It, and Why It Misses GapsChaikin's A/D line weights each bar's volume by where the close sits in its range. The formula, how to read it, and a real day it disagreed with OBV.
Klinger Volume Oscillator (KVO): Formula, the Two Versions, and the Signal Line on Real PricesKlinger's oscillator crossed its signal line 54 times in 250 days on the S&P 500 ETF, and buying the crosses lagged holding. Its formula and two versions.
Negative Volume Index (NVI): Fosback’s Formula, the 255-Day EMA Rule, and What It Did on the S&P 500 ETFThe NVI moves only on quiet days. On the S&P 500 ETF since 1994, the 313 days it sat below its 255-day EMA were followed by better returns, not worse.
Net Volume Indicator: What It Measures, Why the Timeframe Changes It, and a Real Bitcoin ExampleNet volume is uptick minus downtick volume. On Bitcoin, the daily figure and the one rebuilt from hourly bars disagreed in sign about one day in five.
On Balance Volume (OBV) Indicator: Formula, Divergences, Volume Spikes, and a Real S&P 500 ExampleOBV adds a whole day's volume on up closes. On the S&P 500 ETF since 1993, its classic bearish divergence was followed by better 20-day returns, not worse.
Trading Volume: What It Counts, How to Read It With Relative Volume, and Real S&P 500 and Bitcoin DataOn April 7, 2025, the S&P 500 ETF traded 4.09 times its usual volume, one session before its low close. How to read volume with relative volume (RVOL).
Volume Oscillator: Formula, Settings, the Weekend Trap on Bitcoin, and What It Added to BreakoutsThe Volume Oscillator compares a fast and a slow average of volume: the formula, the 5/10 and 12/26 settings, the weekend trap on Bitcoin, and breakouts.
Price Volume Trend (PVT) Indicator: Formula, How It Differs From OBV, and a Real S&P 500 ExamplePrice Volume Trend (PVT) adds each day’s volume weighted by its percentage price change. Formula, PVT vs OBV on the same days, and real S&P 500 data.
Volume Profile Indicator: POC, Value Area and High and Low Volume Nodes, Computed on Real ChartsA volume profile turns the volume of a period sideways, so you see how much traded at each price instead of on each day.
VWAP Indicator: How the Volume Weighted Average Price Is Calculated, Why It Resets Each Session, and What It Did on Hourly BitcoinVWAP resets each session, so on a daily bar it is just the typical price. The formula, a worked example, and how hourly Bitcoin moved around it in 25 days.
Depth of Market (DOM): How to Read the Order Book, What It Hides, and Tape ReadingWhat a depth of market screen shows, and what it hides: canceled size, iceberg orders, one venue only, and why a retail forex DOM is one dealer's book.
Roundups and other indicators
Indicator lists by trading style, divergences, and indicators that sit outside the four families.
10 Day Trading Indicators, and What Each Showed on Hourly BitcoinTen day trading indicators on 600 hourly Bitcoin bars: EMA crossings went the right way 10 times out of 20, MACD 24 of 49. No better than a coin.
10 Forex Trading Indicators, and What Each Showed on EUR/USD From 2021 to 2023Ten forex indicators on one EUR/USD daily chart, 2021 to 2023: MACD crossings were right 21 times out of 42. And why volume indicators do not fit forex.
Anchored VWAP: Formula, Where to Anchor, and How It Differs From VWAPAnchored VWAP is the volume-weighted average price from a bar you choose. The formula, how it differs from VWAP, where to anchor, and two Bitcoin examples.
Divergence in Trading: The Four Types, RSI vs MACD vs Stochastic, and Why They Fail in TrendsPrice makes a new high or low and the oscillator does not: a divergence. The four types, RSI vs MACD vs stochastic, and how often they actually worked.
Fisher Transform Indicator: Ehlers’ Formula and How Often Its Turns Were RightHow often is the Fisher Transform right when it turns? Ehlers' 2002 formula, then about 100 crossings per market on Bitcoin, the S&P 500 ETF and EUR/USD.
GMMA Indicator: How the Guppy Multiple Moving Average Works, With Tests on Four MarketsA GMMA rule beat holding Bitcoin since 2018 but not the S&P 500 ETF since 1993. How the Guppy indicator's 12 averages work, read on a real Bitcoin chart.
TWAP (Time-Weighted Average Price): Formula, TWAP vs VWAP, and 25 Days of Execution on BitcoinTWAP, the time-weighted average price: the formula, how it differs from the VWAP, and what buying Bitcoin in 24 hourly slices cost against the day’s VWAP.
Pivot Points High Low: Definition, Settings, and Why Every Pivot Is Known LatePivot Points High Low marks swing highs and lows with left and right bars. How it works, why each pivot is confirmed late, how the ZigZag's last leg changes.
RSI Divergence: The Rule, the Four Types, and What Every Signal Did NextRSI divergence: price makes a new high or low that the RSI does not confirm. Our rule, regular and hidden types, and what every signal on Bitcoin did next.
Smart Money Flow Index and Smart Money Index: Formula, Origins, and What the Data ShowsThe Smart Money Index subtracts the Dow's first half-hour move and adds its last hour. Formula, example, how it differs from the Smart Money Flow Index.
Ulcer Index: Formula, the Martin Ratio, and Bitcoin vs the S&P 500 ETFThe Ulcer Index measures how deep and how long drawdowns run. From March 2025 to October 2026, Bitcoin was 12 times as risky as the S&P 500 ETF by it. Formula.
Woodies CCI: Settings, the Six-Bar Trend Rule and the Four Basic PatternsWoodies CCI is a trend-following method on a 14 and a 6 period CCI: the six-bar trend rule, the Zero-line Reject and line break patterns, and its exits.
Levels and drawing tools
Support and resistance, trend lines, Fibonacci and Gann tools, and the price targets traders draw from them.
Andrews Pitchfork: How to Draw It, the Schiff Variants and a Test of the Median LineThe Andrews pitchfork draws a median line and two parallels from three swing points. How to pick them, the Schiff variants, and a test of the 80% median claim.
Fibonacci Extension: Levels, How to Draw It and How Often Price Reached ThemA Fibonacci extension projects 61.8%, 100%, 161.8% and 261.8% of a move from the end of its pullback. How to draw it, and how often price reached each level.- Fibonacci Retracement: Levels, How to Draw Them and How Reliable They AreFibonacci retracement levels (23.6% to 78.6%): where the ratios come from, how to draw them by rule, and where 156 real corrections actually ended.
Fibonacci Spiral: How It Is Built, How to Draw It, and What It Cannot ProveThe Fibonacci spiral is a chain of quarter circles in Fibonacci squares. How to build and draw it, why chart scale moves it, and why its touches prove nothing.
Gann Box: How It Links Price and Time, How to Draw It and Its TradingView SettingsThe Gann box splits a move into equal parts of price and time from a pivot. How to scale the chart, draw it, and why its levels are unproven.
Gann Fan: Gann Angles, Chart Scale and How to Draw the FanThe Gann fan draws lines at set angles from one pivot. How to draw it, why chart scale changes every angle, and what its zones did on real Bitcoin data.
Gann Square of Nine: How the Spiral Is Built, the Square Root Formula and a Worked ExampleHow Gann's Square of Nine spiral is built, the square root formula charting software uses, and a worked example: from 100, 45 degrees down gives 95.06.
Measured Move Trading: How to Set the Target, and How Often It Was ReachedHow to draw a measured move and set its target, two real cases from 2025, and how often the target was reached in 59 measured moves on the S&P 500 ETF.
Trendline Breakout Strategy: Entry, Stop and Exit, Step by StepStep by step rules to trade a trendline breakout, with entry, stop and exit, applied to two real breaks: one gain and one loss, and why.- Support and Resistance: How to Find the Levels and How Often They HoldHow to find support and resistance, and how often it held: on the S&P 500 ETF, swing lows held their first test 62.5% of the time, third and later tests 36.8%.
Confluence in Technical Analysis: When Agreeing Signals Add InformationConfluence means several signals agree. On five years of S&P 500 ETF data, the RSI and a 20-day average agreed on 95.7% of days: two signals, one reason.
Camarilla Pivots: Formula, H3 and H4 Levels, and How Often Price ReactsCamarilla pivots turn yesterday's high, low and close into H3, H4, L3 and L4: the formula, a worked example, H3 fade, H4 breakout and how often they held.
Gann Square of 144: How the Grid Is Built, How Traders Use It, and What Is Not ProvenThe Gann Square of 144 is W. D. Gann’s 12 by 12 grid numbered 1 to 144. How the cells run, the eighths and thirds traders draw, and why its levels are unproven.
Market Geometry in Trading: Angles, Ratios and Shapes, and Which Ones Are TestedMarket geometry covers Gann angles, Fibonacci ratios, pitchforks and chart patterns: which tools depend on the chart scale, and which ones our bench tests.
Price action and market structure
Reading the bars themselves: breakouts, traps, gaps, tops and bottoms, wicks and spikes.
Breakout Trading and Breakout Patterns: How Often Breakouts HoldA breakout is a close beyond support or resistance. On five years of S&P 500 ETF data, 40 of 68 upside breakouts closed back below within 10 sessions.
Bull Trap and Bear Trap: How to Spot a Failed Breakout, With Real CountsA bull trap is a breakout that closes back below resistance within days. How to spot one, the bear trap, and what followed 124 breakouts on the S&P 500 ETF.
Spike Chart: What a Price Spike Is, How to Measure It and What FollowedOn the S&P 500 since 1970, the index was higher 20 sessions after 69.2% of its 52 down spikes. What a price spike is, how to measure it, and what followed.
Long Wick Candles and Rejection Candles: Definition, Rule and Tested Follow-ThroughLong wick candles show a price level that was tried and rejected during the bar. A precise rule, ten examples on Bitcoin and a test of the reversal claim.
Gaps in Trading: Definition, the Four Types and How Often They FillDo gaps always fill? Of 172 gaps on the S&P 500 ETF since 2021, 14 were still open in October 2026, all up gaps. The four types and how fast gaps fill.
Market Top and Market Bottom: How to Recognize Them, and Why It Takes TimeA market top or bottom is only known in hindsight: five tops and five bottoms of the S&P 500 since 1987, and how late a 200-day average confirmed each.
Outside Day: Definition, Outside Reversal Day and What Followed 149 Outside DaysAn outside day makes a higher high and a lower low than the day before. Outside reversals, engulfing candles, and what followed 149 of them on the S&P 500 ETF.
Price Action Trading: How It Works, the Key Patterns and a Real ExamplePrice action trading reads the bars, not indicators: swing highs and lows by fixed rules, the key patterns, a real 2025 S&P 500 turn and our bench results.
15 Bullish and Bearish Reversal Candlestick Patterns: Definitions, Confirmation and Test Results15 bullish and bearish reversal candlestick patterns, each defined by an exact rule, with the confirmation they need and how each one did in our tests.
Trend Trading: How to Identify a Trend and What Following It Looks LikeA 10-month average rule on the S&P 500 ETF gained less than buy and hold but cut the worst fall from 50.8% to 23.0%. How to define a trend by rule.
Elliott waves and the Wyckoff method
Elliott Wave Oscillator (EWO): Formula, Settings and How It Is Read With Wave CountsThe Elliott Wave Oscillator is a 5 minus 35 period moving average histogram. Its formula, the 5/34 variant, how it is read at waves 3, 4 and 5, and its limits.
Elliott Wave Theory: The Three Rules, the Wave Pattern and Why Counts DifferElliott wave theory's three rules, two valid counts of the same Bitcoin chart that contradict each other, and whether wave 3 really is 1.618 times wave 1.
The Wyckoff Method: Accumulation and Distribution Schematics, the Three Laws and the Five StepsThe Wyckoff method reads price and volume in trading ranges: accumulation and distribution schematics, phases A to E, the three laws, five steps and its limits.
Chart types
Candles, lines, Heikin Ashi, Renko, point and figure, and price scales. See chart types.
Heikin Ashi Chart: The Formula, How to Read the Candles and What the Averaging HidesOn Bitcoin, Heikin Ashi candles changed color 31 times in 120 days against 66 for real ones, and closed 0.66% off the real price on average. The formulas.
Hollow Candlesticks: The Four Candle Types, How to Read Them and When They Differ from Regular CandlesHollow candlesticks combine two rules into four candle types. On 120 days of an S&P 500 ETF the two mixed types appeared 26 times, on Bitcoin never. Why.
Line Chart in Trading: What It Shows, What It Leaves Out and When to Use OneA line chart keeps only the closes. On 120 days of an S&P 500 ETF it put the low on the wrong day and price, and hid 18 gaps. When to use one.
Logarithmic vs Linear Price Scale: How Each One Draws a Move and When to Use ItThe 2008 crash looks half as deep as 2022 on a linear chart and more than twice as deep on a log one. How each scale draws a move, and when to use it.
Point and Figure Chart: How to Build One Step by Step, Read the Signals and Count a Price ObjectiveA point and figure chart built from 120 days of Bitcoin: the box and reversal rules, every buy and sell signal, and a price count that missed by far.
Raindrop Charts: How a Raindrop Candle Is Built, What Its Colors Mean and How It Compares to a CandlestickRaindrop charts split each bar into two volume profiles with their VWAPs. How a raindrop is built, what its colors mean, and how it compares to a candle.
Renko Chart: How the Bricks Are Built, How to Pick the Box Size and How Renko Compares to KagiA Renko chart prints a brick only when price moves a set amount. On 250 days of Bitcoin, a 1,000 box gave 130 bricks, a 5,000 box 10: how to pick the size.
Learning, testing and history
- Backtesting: How to Test a Trading Strategy and the Pitfalls That Fake the ResultsBacktesting replays a strategy's rules on past prices. The method step by step, five pitfalls that fake results, and why the best rule came 16th of 17.
Black Monday 1987: The Crash in a Chart, a Timeline and Its CausesOn October 19, 1987, the Dow fell 22.6% in a day, still its record: the crash on a daily S&P 500 chart, a dated timeline, its causes and what changed.
Do Professional Traders Use Technical Analysis? What the Surveys FoundSurveys of 692 fund managers and 213 London currency dealers: most professionals use technical analysis, for short horizons and next to fundamentals.- How to Read Stock Charts: Candles, Volume, Timeframe and LevelsHow to read a stock chart step by step: the quote, candles, volume, timeframe and log scale, then trend and levels, on real S&P 500 ETF prices.
Strategy Tester: What It Does, the Main Platforms and What to CheckWhat a strategy tester does, how TradingView and MetaTrader 5 fill orders on past bars, what TrendSpider offers, and the settings to check before a backtest.