Technical analysis includes researching stock price charts and various indicators derived from (basic) prices in order to predict the development of the market.
This graphic extrapolation method is applicable to all types of markets: indices, stocks, interest rates, commodities…, so it is not limited to the stock market (stock market); once the supply and demand meeting determines the price, the same tools and methods can be applied to any Type of underlying asset.
The main tool of the technical analyst is graphics, which can visualize and analyze the underlying assets.
The accepted purpose and reason for existence of technical analysis is to predict trends and signs of trend reversal. This is a question of determining market conditions (significant numbers and/or signals given by mathematical tools) that statistically produce the same results.
Technical analysis does not pretend to be an accurate science. It is closer to human science, because its research object is directly focused on the understanding of market psychology.
Technical analysis was first used by the Japanese around the 17th century for the rice market. They introduced a specific way to draw the price: the Japanese candlesticks. It helped them aggregate the price for a given period.
Technical charting theories are built on a few main assumptions. It partly explains why it is also a very controversial topic.
The smart money flow index or smart money index is an indicator. It measures the sentiment of the investors in the market. The smart money flow index or smart money index is an indicator. It measures the sentiment of the investors in the market. Don Hays, a money manager, introduced and popularized it. The basic […]
The Klinger volume oscillator is a volume-based indicator. It identifies long-term trends of money flow of a particular security. The Klinger volume oscillator is a volume-based indicator that functions to identify long-term trends of money flow of a particular security. It also remains very sensitive to short-term fluctuations and is always predictive of short-term reversals […]
The True Strength Index (TSI) is a very popular and widely used momentum oscillator. It helps traders determine the trend and overbought/oversold market conditions. True Strength Index (TSI) is a very popular and widely used momentum oscillator that helps to determine the trend and overbought/oversold market conditions. William Blau developed the TSI indicator and in […]
As its name suggests, W.D. Gann developped the Gann Fan The Gann Fan is composed of a serie of lines following specific angles. Traders draw the Fan from a low or high points and line are seen as future potential support and resistance lines. Have you ever wondered whether geometrical angles have the solution to […]
An envelope refers to two lines plotted above and below a security’s price. It is drawn by drawing a Simple Moving Average and 2 SMA around it at a fixed distance. The Envelope or envelope channel indicator is a technical analysis tool. It helps to spot the upper and lower bands of the trading range. […]
Historical Volatility is a measure of movements of prices over a specified period of time. It deals with measuring the level of price fluctuations of stock prices from its average price over a specified period of time. It helps trader quantify how volatile a stock is and how likely it is to show extreme moves. […]
The Ulcer Index indicator is a technical analysis tool that measures the downside risk considering both main factors, the depth and the duration of price fall. It is a 3-step calculation. The Ulcer Index (UI) indicator bases on the idea of Ulcer disease. An ulcer is one of the most common and painful diseases. Ulcer […]
The advance/decline (A/D) line is a breadth indicator that plots the difference between advancing stocks and declining stocks. A/D line should move in the same direction as major indexes to confirm the move. If it doesn’t, it’s a sign the rally or decline is nearing its end. What is the A/D line ? The advance/decline […]
When talking about Price Action, traders often refer to the up and down movements of a security’s price. Price action is what creates technical analysis formation and chart patterns. Most indicators also are calculated out of price action. The price of a financial asset is extremely important for trading because fluctuations in prices ultimately define […]
Wyckoff’s method or Wyckoff’s theory is one of the most complete and valuable trading theory. Wyckoff’s theory helps trader understand major market swings (accumulation, distribution phases). Despite all the limitations of the Wyckoff’s method, no one can deny the fact the Wyckoff’s price cycle, Wyckoff’s laws, and overall rules are great concepts for analyzing and […]
