Technical Analysis

Simple Moving Average (SMA)

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The Simple Moving Average (SMA) is a popular technical indicator that helps traders identify price trends. It calculates the average closing price of a stock or asset over a set number of days, smoothing out short-term price movements to make trends clearer. Significance & Purpose Identifying trends – Shows if prices are moving up (bullish) ... Read more

Heikin-Ashi Chart

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The Heikin-Ashi chart (meaning "average bar" in Japanese) was developed by Japanese traders and is a modification of candlestick charts. It smooths out price action by averaging the price data over multiple periods. This makes trends easier to identify by reducing the impact of short-term fluctuations. Importance Helps traders stay in trends longer by filtering ... Read more

Candlestick Chart

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The candlestick chart originated in Japan in the 18th century, developed by Munehisa Homma, a Japanese rice trader. He used candlestick patterns to predict rice price movements based on market psychology. Each candlestick represents open, high, low, and close prices, with different colors (green or red) to indicate market sentiment. It is now the most ... Read more

Renko Chart

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The Renko chart (from the Japanese word "Renga," meaning "brick") was developed by Japanese traders in the 17th century. It focuses only on price movements, forming new "bricks" only when the price moves by a set amount. Unlike traditional charts, time is not considered, making it useful for filtering out minor price changes. Importance Great ... Read more

Kagi Chart

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The Kagi chart was developed in Japan during the 19th century and introduced to the Western world by Steve Nison, the author of "Japanese Candlestick Charting Techniques." It is a trend-following chart that changes direction based on significant price reversals. A thick line represents a bullish trend, while a thin line represents a bearish trend. ... Read more

Point and Figure (P&F) Chart

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The Point and Figure (P&F) chart was developed in the late 19th century and refined by Charles Dow, the founder of Dow Theory. Unlike time-based charts, P&F charts focus only on price movements, using X’s to indicate price increases and O’s to indicate price declines. A new column is formed only after a significant price ... Read more

Technical Analysis

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1. What is Technical Analysis? Technical analysis is a method used by traders and investors to evaluate financial markets and forecast price movements based on historical price data. Unlike fundamental analysis, which examines a company’s financial health, technical analysis focuses on charts, trends, and trading volume to identify patterns that indicate future price movements. Traders ... Read more

Indicators vs. Oscillators

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Feature Indicators Oscillators Definition Mathematical tools to analyze trends, momentum, volatility, and volume. Tools that oscillate within a range to detect overbought/oversold conditions. Purpose Confirm trends, measure momentum, and gauge volatility. Identify overbought and oversold conditions, predict reversals. Best for Trend-following strategies in trending markets. Range-bound markets with sideways price movement. Market Condition Strong trending ... Read more

Oscillators

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Oscillators are a subset of indicators that fluctuate within a fixed range (e.g., 0-100) to identify overbought and oversold conditions. They are especially useful in sideways or ranging markets where trends are unclear. How Oscillators Are Used: Best for range-bound markets where price moves within a predictable range. Helps traders time market reversals before the ... Read more