Technical analysis is done on the basis of historical price movement plotted on a two-dimensional chart. One reason it has become popular is that anybody can look at the chart and see how prices have moved.
Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity
i.Support & Resistance
-the psychology
-How to estimate the potential importance of Support & Resistance
ii. Trading with the trends
-Bullish and Bearish Trends
-Primary, secondary and Minor trend
iii. Fibonacci retracement
iv. “Lines” may substitute for secondary-Dow Theory
On the charts of currency rates it’s possible to highlight geometric models, which are formed after the price level has reached its maximum value in the current trend. Recognition of these figures indicates the end of the trend and the beginning of a new movement.
i. Forex trading session
ii. Three types of Charts
-actually, there are more like Point and figure & market profile, but we're only focusing on the candlestick for beginners.
iii. Market Trends
iv. Support & Resistance
v. Basic Pattern of Candlesticks
-Doji
-Inverted Hammer & Shooting Star
-Hammer & Hangman
-Bullish and Bearish engulfing bars
-Tweezer Tops & Tweezer Bottoms
-Morning star and Everning star
vi. Forex Glossary
-pip, base currency, bid and ask, spread
Dow Theory Is The Most Successful Hypothesis On How The Price Action On The Stock Market Operates. If You Understand It Your Probability Of Investment Success Will Increase 10 Fold.
Technical analysis is done on the basis of historical price movement plotted on a two-dimensional chart. One reason it has become popular is that anybody can look at the chart and see how prices have moved.
Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity
i.Support & Resistance
-the psychology
-How to estimate the potential importance of Support & Resistance
ii. Trading with the trends
-Bullish and Bearish Trends
-Primary, secondary and Minor trend
iii. Fibonacci retracement
iv. “Lines” may substitute for secondary-Dow Theory
On the charts of currency rates it’s possible to highlight geometric models, which are formed after the price level has reached its maximum value in the current trend. Recognition of these figures indicates the end of the trend and the beginning of a new movement.
i. Forex trading session
ii. Three types of Charts
-actually, there are more like Point and figure & market profile, but we're only focusing on the candlestick for beginners.
iii. Market Trends
iv. Support & Resistance
v. Basic Pattern of Candlesticks
-Doji
-Inverted Hammer & Shooting Star
-Hammer & Hangman
-Bullish and Bearish engulfing bars
-Tweezer Tops & Tweezer Bottoms
-Morning star and Everning star
vi. Forex Glossary
-pip, base currency, bid and ask, spread
Dow Theory Is The Most Successful Hypothesis On How The Price Action On The Stock Market Operates. If You Understand It Your Probability Of Investment Success Will Increase 10 Fold.
This presentation gives you an overview of technical analysis. Technical Analysis basically suggests us "WHEN" to invest. This presentation will give a brief idea of Dow's Theory and different types of graphs used in share market to demonstrate a specific stock (5 types of graphs).
Price Action Trading Best 100% Successful Strategies used by Investors.pdfNazim Khan
What is meant by price action?
The movement of a security’s price plotted over time is known as price action. All technical analysis of a stock, commodity, or other asset chart is based on price activity. Many short-term traders base all of their trading choices solely on price movement and the formations and trends that can be drawn from it. Since it employs previous prices in calculations that can then be used to advise trading decisions, technical analysis as a practice is a derivative of price action.
A method for speculating on the financial markets called “price action trading” involves analyzing the fundamental changes in price over time. It is frequently used by institutional traders, hedge fund managers, and a large number of retail traders to forecast the future direction of the price of securities or financial markets.
In other words, price action trading is a ‘pure’ form of technical analysis because it doesn’t use any indicators that are derived from previous prices. The only data a market generates about itself that price action traders are interested in is price movement over time.
Price action analysis enables a trader to comprehend market price movement and offers explanations that help the trader create an image in their minds of how the market is currently structured. A market’s ‘gut feel’ and the experience of seasoned price action traders are frequently cited as the main drivers of their trading success.
A trader can attempt to interpret the human thought process underlying a market’s movement using the price action of the market. As they trade, each participant in a market leaves ‘clues’ in the form of price action on the price chart of that market. These clues can be analyzed and used to try to predict the next move in a market.
What Can You Learn from Price Action?
Charts that show price changes over time can be used to observe and interpret price action. To better identify and understand trends, breakouts, and reversals, traders’ use various chart compositions. Since candlestick charts show the open, high, low, and close values in the context of up or down sessions, they aid in the better visualization of price movements and are popular among traders.
Price action can be visually interpreted using candlestick patterns like the Harami cross, engulfing pattern, and three white soldiers. Many more candlestick formations can be created based on price action to predict what will happen next. Other chart types, such as point-and-figure charts, box charts, box plots, and others, can use the same formations.
Many technical analysts calculate technical indicators using price action data in addition to the visual formations on the chart. The objective is to uncover order in a price’s occasionally seeming random movement. For instance, the price action indicates that bulls have attempted a breakout on multiple occasions and have gained momentum each time, so an ascending triangle pattern created by applying trend lines to a price ac
Moneycation april 2015 newsletter; volume #3, issue #10A.W. Berry
Technical investment analysis involves understanding price movements and knowing how to interpret their meaning. Numerous technical trading tools exist to assist with improving the probability of trading success.
Using analysis on a particular market instrument or stock can be hard to do manually but today's market analysis software and trading platforms often have features that can does this even on multiple items or samples.
Trends and Trendlines in Indian stock market.pdfiamraham
Trends and Trendlines explained for intraday and swing trading in Indian stock market. A complete guide for the trend identification for a short term or medium term investments.
Dow theory was formulated from a series of Wall Street Journal editorials authored by Charles H. Dow from 1900 until the time of his death in 1902. Dow theory identifies three trends within the market: primary, secondary and minor.
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Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
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Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
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The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
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2. Lecture Outline:
Meaning of technical analysis
Dow Theory
Basic Principles of Technical Analysis
Price Chart
Trends and Trend Reversals
Charts patterns
Elliot Wave Theory
Market Indicators
3. Meaning of Technical Analysis
The basic premise of technical analysis is that
price move in trends or waves which may be
upwards or downwards. It is believed that the
present trends are influenced by the past
trends and that the projection of future trends
is possible by an analysis of past price trends.
A technical analyst, therefore, analyses the
price and volume movements of individual
securities as well as market index. Thus,
technical analysis is really a study of past and
historical price and volume movements so as
to predict the future stock price behaviour
4. Dow Theory
Charles Dow formulated a hypothesis that the stock market
does not move on a random basis but it influenced by three
distinct cyclical trends that guide its direction, according to
Dow theory, the market has three movements and these
movements are simultaneous in nature. These movements
are the primary movements, secondary reactions and minor
movements.
1) The "main movement", primary movement or major trend
may last from less than a year to several years. It can be
bullish or bearish. (2) The "medium swing", secondary
reaction or intermediate reaction may last from ten days to
three months and generally retraces from 33% to 66% of the
primary price change since the previous medium swing or
start of the main movement. (3) The "short swing" or minor
movement varies with opinion from hours to a month or more.
The three movements may be simultaneous, for instance, a
daily minor movement in a bearish secondary reaction in a
bullish primary movement.
6. Primary trend and secondary
reaction
A primary uptrend is when each
successive advance of the
primary trend peaks and troughs
higher than the one preceding it,
and can last from several months
to several years.
Within a primary uptrend, several
secondary reactions may occur
against the trend, lasting for a few
days, weeks or even months, but
they don't necessarily change the
definition of the overall trend.
In the stock market, for example,
prices may drop, even during a
powerful uptrend, for several
weeks at a time. This is known as
7. Cont..
Daily, or minor,
movements last from a
few hours up to three
weeks;
Secondary reactions
normally retrace one third
to two thirds of the
primary trend (since the
previous reaction) and
last from 3 weeks to 3
months; and
Primary movements of the
8. Bullish Trends and Bearish
Trends
Investors who believe that a stock price will increase over time are
said to be bullish. Investors who buy calls are bullish on the
underlying stock. That is, they believe that the stock price will rise
and have paid for the right to purchase the stock at a specific price
known as the exercise price or strike price. An investor who has
sold puts is also considered to be bullish on the stock. The seller of
a put has an obligation to buy the stock and, therefore, believes that
the stock price will rise.
Investors who believe that a stock price will decline are said to be
bearish. The seller of a call has an obligation to sell the stock to the
purchaser at a specified price and believes that the stock price will
fall and is therefore bearish. The buyer of a put wants the price to
drop so that they may sell the stock at a higher price to the seller of
the put contract. They are also considered to be bearish on the
stock.
11. Assumptions
First Hypothesis: No single individual, institution
and group of individuals can exert influence on the
major trend of the market. However , manipulation
is possible in the day to day or short term
movement in the market.
Second Hypothesis: States that the daily prices
reflect the aggregate judgment and emotion of all
stock market participants.
Third Hypothesis: States that the trend of market
and has no forecasting value as regards the
duration or the likely price targets for the peck or
the button of the bull and bear markets.
12. Basic Principles of technical
Analysis
The market value of security is related to
demand and supply factors operating in the
market.
There are both rational and irrational factors
which surround the supply the demand fact of
the security.
Security prices behave in a manner that there
movement is continuous in a particular
direction for some length of time.
Trend in stock prices have been seen to
change when where is a shift in the demand
and supply factors.
13. Cont.
The shifts in demand and supply can be
detected through charts prepare specially to
show market actions.
Patterns which are projected by charts record
price movements and these recorded patterns
are used by analyst to make forecast about the
movement of price in future
14. Price Charts
The price chart is the basic tool used by the technical
analyst to study the share price movement. The prices
are plotted on XY graph where the X axis represents
the trading days and the Y axis denotes the prices.
Four prices are very important, these are the highest
prices, lowest price, opening price, and closing price,
among these four prices the closing price is very
important because the closing price is used to analyze
the share prices in market.
Three types of price charts are currently used by
technical analyst.
Line Chart
Bar Chart
Japanese Candlestick Chart
15. Line Chart
A line chart or line graph is
a type of chart which displays
information as a series of
data points called 'markers'
connected by straight
line segments. It is a basic
type of chart common in
many fields. It is similar to
a scatter plot except that the
measurement points are
ordered (typically by their x-
axis value) and joined with
straight line segments. A line
chart is often used to
visualize a trend in data over
16. Bar Chart
A bar chart or bar
graph is a chart that
presents grouped
data with rectangular bar
s
with lengths proportional
to the values that they
represent. The bars can
be plotted vertically or
horizontally. A vertical
bar chart is sometimes
called a column bar
chart.
17. Japanese Candlestick Chart
A candlestick chart is a style
of financial chart used to
describe price movements of
a security, derivative, or
currency. Each "candlestick"
typically shows one day; so for
example a one-month chart
may show the 20 trading days
as 20 "candlesticks".
It is like a combination of line-
chart and a bar-chart: each bar
represents all four important
pieces of information for that
day: the open, the close, the
high and the low.
Candlestick charts are most
often used in technical
analysis of equity and currency
price patterns. They appear
superficially similar to box plots,
18. Cont..
There are mainly three types of
candlesticks: white, the black,
and the doji or neutral. A white
candlestick represent a situation
where the closing price of the
day is higher than the opening
price (bullish trend). A black
candlestick is used when the
closing price of the day is lower
than opening price (bearish
trend). A doji candlestick is the
one where the opening price
and closing price of the day are
the same.
19. Trends and Trend Reversals
Trend is the direction of movement of share prices in the
market. When the prices move upwards, it is a rising trend or
uptrend. When the prices move downwards, we have a falling
trend or downtrend. The result of zig-zag movement giving
rise to alternating tops and bottoms. The formation of higher
bottoms and higher lower indicates a rising trend, while the
formation of lower tops and lower bottoms indicates a falling
trends.
The change in the direction of trend is referred to as trend
reversal.
A technical analysis price to identify the trend reversals at in
early stage so as to trade profitability in the market. When the
trend reverses and begin to rise the technical analyst would
recommend purchase of the share. When trend becomes to
fall sale is indicated during the flat trend, the investor should
stay away from the market.
20. Trends and Trend Reversals
A reversal pattern signals that a
prior trend will reverse upon
completion of the pattern. A
continuation pattern, on the other
hand, signals that a trend will
continue once the pattern is
complete. These patterns can be
found over charts of any timeframe.
Reversal Pattern: A change in the
direction of a price trend. On a
price chart, reversals undergo a
recognizable change in the price
structure. An uptrend, which is a
series of higher highs and higher
lows, reverses into a downtrend by
changing to a series of lower highs
and lower lows. A downtrend,
which is a series of lower highs
and lower lows, reverses into
an uptrend by changing to a series
21. Charts Patterns
A chart pattern is a distinct formation on a stock chart
that creates a trading signal, or a sign of future price
movements. Chartists use these patterns to identify
current trends and trend reversals and to trigger buy
and sell signals.
When the price bar charts of several days are drawn
close together, certain pattern emerge. These patterns
are used by the technical analyst to identify trend
reversal and predict the future movement of prices.
The chart patters may be classified as:
support and resistance patterns,
Reversal and continuation patterns
22. Support and Resistance
Support and resistance are price at which the
downtrend and uptrend in price movement is
reversed.
Support occurs when price is falling but bounce
back or reverses direction every time it reaches a
particular level.
When all these low points are connected by a
horizontal line, it form the support line.
In other words, the support level is the price level
at which sufficient buying pressure is exerted to
halt the fall in prices.
23. Resistance
Resistance occurs when
the share price move
upward. The price may
bounce back every time it
reaches a particular level.
A horizontal line join tops
forms the resistance level.
Thus, the resistance level
is the price level where
sufficient selling pressure
is exerted to halt the
ongoing rise in the price of
a share.
24. Reversal
Price movement exhibit uptrends and
downtrends, the trends reverse direction after
a period of time. These reversals can be
identified with the help of certain charts
formations that typically occur during these
trends reversal.
Head and shoulder formation:
Inverse Head and shoulder formation
25. Head and shoulder formation:
This trend usually occur at the end of a long uptrend. The
formation exhibits a hump or top followed by a still higher top
or peak and than another hump or lower top. This formation
resembles the head and two shoulders of a man and hence
the name head and shoulder formation.
The first hump, known as the left shoulder, is formed when
the prices reach the top under a strong buying impulse. Then
trading volume become less and there is a short downward
swing. This is followed by another high volume advance,
which takes the price to a higher top known as the head. This
is followed by another reaction on less volume which takes
the price down to a bottom near to the earlier downswing.
The third rally now occurs taking the price to a height less
than the head but comparable to the left shoulder. This rally
result in the formation of the right shoulder.
26. Cont:
The horizontal line
joining the bottoms of
this formation is known
as the neckline.
The head and shoulder
formation usually occurs
at the end of a bull
phase and is indicative
of a reversal of trend.
After breaking the
neckline, the price is
expected to decline
sharply
27. Inverse Head and Shoulder
Formation
The inverse head-and-
shoulders pattern is the
exact opposite of the
head-and-shoulders top,
as it signals that the
security is set to make an
upward move. Often
coming at the end of a
downtrend, the inverse
head and shoulders is
considered to be a
reversal pattern, as the
security typically heads
higher after the completion
of the pattern.
28. Continuation
A technical analysis pattern that suggests a trend is
exhibiting a temporary diversion in behavior, and will
eventually continue on its existing trend.
Continuation patterns occur mid-trend and are a
pause in the price action of varying durations. When
these patterns occur, it can indicate the trend is likely
to resume after the pattern completes. A pattern is
considered complete when the pattern has formed
(can be drawn) and then "breaks out" of that pattern,
potentially continuing on with the former trend.
Continuation patterns can be seen on all time frames,
from a tick chart to a daily or weekly chart. Common
continuation patterns
include triangles, flags, pennants and rectangles.
29. Types
Triangles: Triangles are a common pattern and
can simply be defined as a converging of the price
range, with higher lows and lower highs. The
converging price action creates a triangle
formation. There are three basic types of
triangles: symmetric, ascending and descending.
For trading purposes, the three types of triangles
can be traded similarly.
Triangles vary in their duration, but will have at
least two swing highs in price and two swings
lows in price. As price continue to converge, it will
eventually reach the apex of the triangle; the
closer to the apex price gets, the tighter and
tighter price action becomes, thus making a
breakout more immanent.
30. Symmetric - A
symmetric triangle
can be simply
defined as a
downward
sloping, upper
bound and an
upward sloping,
lower bound in
price
31. Ascending - An
ascending triangle
can be defined as
a horizontal upper
bound and
upward sloping
lower bound.
32. Descending - A
descending triangle
can be defined as a
downward sloping
upper bound and
horizontal lower
bound.
33. Flags are a pause in the trend,
where the price becomes
confined in a small price range
between parallel lines. This
pause in the middle of a trend
gives the pattern a flag like
appearance. Flags are
generally short in duration,
lasting several bars, and do
not contain price swings back
and forth as a trading range or
trend channel would. Flags
may be parallel or upward or
downward sloping, as shown
in Figure 4.
34. Pennants are similar to a
triangle, yet smaller;
pennants are generally
created by only several
bars. While not a hard and
fast rule, if a pennant
contains more than 20
price bars it can be
considered a triangle. The
pattern is created as prices
converge, covering a
relatively small price range
mid-trend; this gives the
pattern a pennant
appearance.