Category: technical

Chart Patterns Much of the body of technical analysis and the study of market action have to do with the study of human psychology. Chart patterns, identified over the past century, reflect bearish or bullish market patterns and are based on traders’ psychological reactions to certain supply/demand fluctuations. Assuming that the innate nature of human…

Charts represent the price data fluctuations caused by varying market forces. The information found in these charts enables a chartist skilled in the science of technical analysis to draw trading signals for future price activity. The primary chart types used for the analysis are: The most popular type of chart in use today is the…

The trend is the fundamental cornerstone of technical analysis. The trend denotes the overall direction of the market at a given time over a given scope, showing the trader the tendency of change in market prices. More simply put, the trend shows the direction of the market. Thus it follows that all trends fall under…

In order to clearly see trends a technical analyst must draw trendlines and identify levels of support and resistance. Trends do not move in straight lines; they zigzag in a general direction forming progressively higher (or lower) peaks and lows. At a price peak, or high, buyers that are pushing up the price of an…

The sideways price action of a reversal pattern signifies that upon breaking out of the pattern there will be a turnaround in the current trend. Head and Shoulders The Head and Shoulders pattern is one of the most classic patterns in a technical analyst’s toolkit. This three-peak formation is named for its resemblance to a…