Types of Charts
- OHCL - Open High Low Close charts plot the high and low of the price movement vertically and the open and close horizontally. Used to graph range and outliers.
- Cnadlestick Chart- Similar to OHLC, but open and close are filled. Often Black or Red candles represent a close lower than the open. While White, Green or Blue candles represent a close higher than the open.
- Line chart- Connects each closing interval together on a line
Concepts
- Average true range- averaged daily trading range, adjusted for price gaps
- Chart pattern
- Coppock curve - Edwin coppock developed the Coppock Indicator to identify the commencement of bull markets
- Dead cat bounce- the phenomenon whereby a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement
- Elliott wave principle and the golden ratio to calculate successive price movements and retracements
- Hikkake pattern- pattern for identifying reversals and continuations
- Momentum- the rate of price change
- Point and figure charts - charts based on price without time
Overlays
Overlays are generally superimposed over the main price chart.
- Resistance - an area that brings on increased selling
- Support- an area that brings on increased buying
- Breakout - when a price passes through and stays above an area of support or resistance
- Trend line - a sloping line of support or resistance
- Channel - a pair of parallel trend lines
- Moving average - lags behind the price action but filters out short term movements
- Bollinger bands - a range of price volatility
- Pivot point- derived by calculating the numerical average of a particular currency's or stock's high, low and closing prices
Price-based indicators
These indicators are generally shown below or above the main price chart.
- Accumulation/distribution index—based on the close within the day's range
- Advance decline line — a popular indicator of market breadth
- Average directional index — a widely used indicator of trend strength
- Commodity channel index - identifies cyclical trends
- MACD - moving average convergence/divergence
- Parabolic SAR- Wilder's trailing stop based on prices tending to stay within a parabolic curve during a strong trend
- Relative Strength Index (RSI)- oscillator showing price strength
- Stochastic oscillator, close position within recent trading range
- Trix - an oscillator showing the slope of a triple-smoothed exponential moving average, developed in the 1980s by Jack Hutson
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