Description
It covers line charts, bar charts, candle sticks patterns, different types of trends and trendlines. Covers concepts like confirmationa and divergence, support and resistance, trading range, price channels, bull trap and bear trap, retracements.
TECHNICAL ANALYSIS
“Technical analysis is like a journey that is completed safely using the multiple signposts along the way— where each turn is known only at the time the road sign appears.”
TECHNICAL ANALYSIS
WHAT IS TECHNICAL ANALYSIS? The word technical comes from the Greek technikos, relating to art or skillful. Webster’s goes on to define technical as having special and practical knowledge. It is the study of any market that uses price and volume information only in order to forecast future price movement and trends. Technical analysts rely on historical and current price and volume information only.
PRICE AND VOLUME BASICS
Price Charting • Bar Charts • Line Charts • Candle sticks • Point and Figure charts
PRICE AND VOLUME BASICS
Bar Charts:
PRICE AND VOLUME BASICS
• Line Chart
PRICE AND VOLUME BASICS
• Candle Sticks
Candle Sticks
Candle Sticks
Price Scale (Linear vs. Log)
Data Integrity
• Remove the bad ticks
Data Integrity
• Unadjusted prices may be misleading (Phantom Prices)
Data Integrity
• Look at the adjusted prices
Volume
• Volume expands in the direction of trend • Volume changes tend to precedes price changes • Look at bigger vol. days in upswing and larger vol. total in downswing
Volume
• Vol. should increase in the direction of dominant trend
• On Balance Volume: Changes in OBV precede price changes
Example:
Assume we started with a stock that traded 1 million shares on day 1. If the stock closes higher the next day and 750,000 shares are traded, day 2’s volume figure is added to the first day and assigned a positive number, as our running total is so far a positive number, with OBV on day 2 at +1,750,000. [Note: OBV would be a negative number, if our example stock closed lower on day 2, on 1,500,000 shares: OBV would be –500,000.] On day 3 the stock closes lower on 500,000 shares and we subtract that day’s volume from our cumulative OBV total: On day 3, OBV is +1,250,000. When the stock is unchanged in price on day 4, we leave OBV unchanged at +1,250,000. This continues on into the future.
• Direction of OBV is the primary concern; whether the
line is moving up or down. Check out the Price-OBV divergence.
Volume
TRENDS
• Trend could be: upwards, downwards, sideways.
TRENDS
TRENDS
TRENDS ARE OF THREE TYPES: • Primary Trend: or major trend (long-term trend) is a price movement that usually lasts for a year or more. • Intermediate Trend: or secondary trend (medium-term trend) lasts from several weeks to several months • Minor Trends: also known as short-term trend lasts for a few hours to few weeks.
TRENDS
TRENDS
TRENDS
TRENDS
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
Figure 5.27
TRENDLINES
Figure 5.28
TRENDLINES
Figure 5.29
TRENDLINES
Figure 5.30
TRENDLINES
Figure 5.31
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
CONFIRMATION AND DIVERGENCE
CONFIRMATION AND DIVERGENCE
CONFIRMATION AND DIVERGENCE
CONFIRMATION AND DIVERGENCE
SUPPORT AND RESISTANCE
SUPPORT AND RESISTANCE
SUPPORT AND RESISTANCE
SUPPORT AND RESISTANCE
PRICE CHANNELS
PRICE CHANNELS
PRICE CHANNELS
TRADING RANGE
TRADING RANGE
TREND REVERSALS (Bull trap and Bear Trap)
RETRACEMENTS
RETRACEMENTS
RETRACEMENTS
doc_482097316.pptx
It covers line charts, bar charts, candle sticks patterns, different types of trends and trendlines. Covers concepts like confirmationa and divergence, support and resistance, trading range, price channels, bull trap and bear trap, retracements.
TECHNICAL ANALYSIS
“Technical analysis is like a journey that is completed safely using the multiple signposts along the way— where each turn is known only at the time the road sign appears.”
TECHNICAL ANALYSIS
WHAT IS TECHNICAL ANALYSIS? The word technical comes from the Greek technikos, relating to art or skillful. Webster’s goes on to define technical as having special and practical knowledge. It is the study of any market that uses price and volume information only in order to forecast future price movement and trends. Technical analysts rely on historical and current price and volume information only.
PRICE AND VOLUME BASICS
Price Charting • Bar Charts • Line Charts • Candle sticks • Point and Figure charts
PRICE AND VOLUME BASICS
Bar Charts:
PRICE AND VOLUME BASICS
• Line Chart
PRICE AND VOLUME BASICS
• Candle Sticks
Candle Sticks
Candle Sticks
Price Scale (Linear vs. Log)
Data Integrity
• Remove the bad ticks
Data Integrity
• Unadjusted prices may be misleading (Phantom Prices)
Data Integrity
• Look at the adjusted prices
Volume
• Volume expands in the direction of trend • Volume changes tend to precedes price changes • Look at bigger vol. days in upswing and larger vol. total in downswing
Volume
• Vol. should increase in the direction of dominant trend
• On Balance Volume: Changes in OBV precede price changes
Example:
Assume we started with a stock that traded 1 million shares on day 1. If the stock closes higher the next day and 750,000 shares are traded, day 2’s volume figure is added to the first day and assigned a positive number, as our running total is so far a positive number, with OBV on day 2 at +1,750,000. [Note: OBV would be a negative number, if our example stock closed lower on day 2, on 1,500,000 shares: OBV would be –500,000.] On day 3 the stock closes lower on 500,000 shares and we subtract that day’s volume from our cumulative OBV total: On day 3, OBV is +1,250,000. When the stock is unchanged in price on day 4, we leave OBV unchanged at +1,250,000. This continues on into the future.
• Direction of OBV is the primary concern; whether the
line is moving up or down. Check out the Price-OBV divergence.
Volume
TRENDS
• Trend could be: upwards, downwards, sideways.
TRENDS
TRENDS
TRENDS ARE OF THREE TYPES: • Primary Trend: or major trend (long-term trend) is a price movement that usually lasts for a year or more. • Intermediate Trend: or secondary trend (medium-term trend) lasts from several weeks to several months • Minor Trends: also known as short-term trend lasts for a few hours to few weeks.
TRENDS
TRENDS
TRENDS
TRENDS
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
Figure 5.27
TRENDLINES
Figure 5.28
TRENDLINES
Figure 5.29
TRENDLINES
Figure 5.30
TRENDLINES
Figure 5.31
TRENDLINES
TRENDLINES
TRENDLINES
TRENDLINES
CONFIRMATION AND DIVERGENCE
CONFIRMATION AND DIVERGENCE
CONFIRMATION AND DIVERGENCE
CONFIRMATION AND DIVERGENCE
SUPPORT AND RESISTANCE
SUPPORT AND RESISTANCE
SUPPORT AND RESISTANCE
SUPPORT AND RESISTANCE
PRICE CHANNELS
PRICE CHANNELS
PRICE CHANNELS
TRADING RANGE
TRADING RANGE
TREND REVERSALS (Bull trap and Bear Trap)
RETRACEMENTS
RETRACEMENTS
RETRACEMENTS
doc_482097316.pptx