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…
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…
The bar chart (Open-High-Low-Close or OHLC chart) was developed in the early 20th century as an improvement over line charts. Each bar represents four price points: open, high, low, and close. The left tick represents the opening price, and the…
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…
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…
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…
Indicators help traders identify and confirm the market's direction, strength, and volatility. They are especially useful in trending markets because they allow traders to ride the trend rather than predict reversals. How Indicators Are Used: Used for trend confirmation, avoiding…
The Hammer is a single candlestick pattern that appears at the bottom of a downtrend, suggesting a potential reversal to an uptrend. It indicates that although sellers controlled the price initially, buyers stepped in, rejecting lower prices, which could signal…
The line chart is the most basic form of price chart, developed as a simple way to visualize stock trends over time. It plots only the closing prices of a stock and connects them with a continuous line. The closing…
The Average Directional Index (ADX) is a trend strength indicator that measures how strong a price trend is, whether upward or downward. Unlike other indicators, ADX does not indicate trend direction, only the strength of the trend. It is typically…