Technical Analysis - Astro
Technical Analysis
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Contents
Articles
Technical analysis
1
CONCEPTS
11
Support and resistance
11
Trend line (technical analysis)
15
Breakout (technical analysis)
16
Market trend
16
Dead cat bounce
21
Elliott wave principle
22
Fibonacci retracement
29
Pivot point
31
Dow Theory
34
CHARTS
37
Candlestick chart
37
Open-high-low-close chart
39
Line chart
40
Point and figure chart
42
Kagi chart
45
PATTERNS: Chart Pattern
47
Chart pattern
47
Head and shoulders (chart pattern)
48
Cup and handle
50
Double top and double bottom
51
Triple top and triple bottom
52
Broadening top
54
Price channels
55
Wedge pattern
56
Triangle (chart pattern)
58
Flag and pennant patterns
60
The Island Reversal
63
Gap (chart pattern)
64
PATTERNS: Candlestick pattern
68
Candlestick pattern
68
Doji
89
Hammer (candlestick pattern)
92
Hanging man (candlestick pattern)
93
Inverted hammer
94
Shooting star (candlestick pattern)
94
Marubozu
95
Spinning top (candlestick pattern)
96
Three white soldiers
97
Three Black Crows
98
Morning star (candlestick pattern)
99
Hikkake Pattern
100
INDICATORS: Trend
102
Average Directional Index
102
Ichimoku Kink Hy
103
MACD
104
Mass index
108
Moving average
109
Parabolic SAR
115
Trix (technical analysis)
116
Vortex Indicator
118
Know Sure Thing (KST) Oscillator
121
INDICATORS: Momentum
124
Momentum (finance)
124
Relative Strength Index
125
Stochastic oscillator
128
Williams %R
131
INDICATORS: Volume
132
Volume (finance)
132
Accumulation/distribution index
133
Money Flow Index
134
On-balance volume
135
Volume Price Trend
136
Force Index
137
Negative volume index
137
Ease of movement
140
INDICATORS: Volatility
141
Volatility (finance)
141
Average True Range
144
Bollinger Bands
145
Donchian channel
149
Standard deviation
149
INDICATORS: Other
162
Advance decline line
162
Commodity Channel Index
163
Coppock curve
165
Keltner channel
166
McClellan Oscillator
167
Ulcer Index
168
Ultimate Oscillator
170
References
Article Sources and Contributors
172
Image Sources, Licenses and Contributors
176
Article Licenses
License
179
Technical analysis
1
Technical analysis
In finance, technical analysis is a security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume.[1] Behavioral economics and quantitative analysis incorporate substantial aspects of technical analysis,[2] which being an aspect of active management stands in contradiction to
much of modern portfolio theory. According to the weak-form efficient-market hypothesis, such forecasting methods
are valueless, since prices follow a random walk or are otherwise essentially unpredictable.
History
The principles of technical analysis derive from the observation of financial markets over hundreds of years.[3] The oldest known hints of technical analysis appear in Joseph de la Vega's accounts of the Dutch markets in the 17th century. In Asia, the oldest example of technical analysis is thought to be a method developed by Homma Munehisa during early 18th century which evolved into the use of candlestick techniques, and is today a main charting tool.[4] [5] In the 1920s and 1930s Richard W. Schabacker published several books which continued the work of Dow and William Peter Hamilton in his books Stock Market Theory and Practice and Technical Market Analysis. At the end of his life he was joined by his brother in law, Robert D. Edwards who finished his last book. In 1948 Edwards and John Magee published Technical Analysis of Stock Trends which is widely considered to be one of the seminal works of the discipline. It is exclusively concerned with trend analysis and chart patterns and remains in use to the present. It is now in its 9th edition. As is obvious, early technical analysis was almost exclusively the analysis of charts, because the processing power of computers was not available for statistical analysis. Charles Dow reportedly originated a form of chart analysis used by technicians--point and figure analysis.
Dow Theory is based on the collected writings of Dow Jones co-founder and editor Charles Dow, and inspired the use and development of modern technical analysis from the end of the 19th century. Other pioneers of analysis techniques include Ralph Nelson Elliott, William Delbert Gann and Richard Wyckoff who developed their respective techniques in the early 20th century.
Many more technical tools and theories have been developed and enhanced in recent decades, with an increasing emphasis on computer-assisted techniques.
General description
While fundamental analysts examine earnings, dividends, new products, research and the like, technical analysts examine what investors fear or think about those developments and whether or not investors have the wherewithal to back up their opinions; these two concepts are called psych (psychology) and supply/demand. Technicians employ many techniques, one of which is the use of charts. Using charts, technical analysts seek to identify price patterns and market trends in financial markets and attempt to exploit those patterns.[6] Technicians use various methods and tools, the study of price charts is but one.
Supply/demand indicators monitor investors' liquidity; margin levels, short interest, cash in brokerage accounts, etc., in an attempt to determine whether they have any money left. Other indicators monitor the state of psych - are investors bullish or bearish? - and are they willing to spend money to back up their beliefs. A spent-out bull cannot move the market higher, and a well heeled bear won't!; investors need to know which they are facing. In the end, stock prices are only what investors think; therefore determining what they think is every bit as critical as an earnings estimate.
Technicians using charts search for archetypal price chart patterns, such as the well-known head and shoulders or double top/bottom reversal patterns, study technical indicators, moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.
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