Learn to Trade Stocks
Learn Stock Charts Archive
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Price Channel
PRICE CHANNEL the pattern Commodity or stock prices go up and down from time to time. When you draw a pair of parallel lines to approximate the trend of the prices, you are creating a price channel. When the prices pass through the channel and stays through a trend indicating resistance or support, there exists [...] -
Moving Average
MOVING AVERAGE the mean When dealing with time series data, a moving average smooths out short-term fluctuations. It also highlights long-term trends. Practical applications of the moving average would be in the analyses of technical data like trade volumes, stock prices, gross domestic product (GDP), employment, and other time-series data. Simple Moving Average The term [...] -
Pivot Point
PIVOT POINT predictive indicator of market movement It is Simply an Average A pivot point is calculated as an average of significant prices, namely the High, Low, and Close from the performance of a market in the previous trading period. If the market in the following period trades above the pivot point it is usually [...] -
Bollinger Bands
BOLLINGER BANDS measure the height of the price relative to previous trades This is a technical analysis tool invented by John Bollinger in the 1980s. This evolved from the concept of trading bands. Bollinger Bands are typically used to measure the highness or lowness of the price relative to the trades previously made. Composition of [...] -
On-Balance Volume
ON-BALANCE VOLUME price-volume relationship Based on a cumulative volume, the on-balance volume relates price and volume in the stock market, and it has the formula: OBV = OBVprev + volume … if close > closeprev then { + volume} + 0 … if close = closeprev then { + 0} - volume … if close [...] -
Money Flow
MONEY FLOW price times volume Money flow approximates the dollar value of a certain day’s trading. The formula is price multiplied by volume. Generally, a value of 80 is counted as overbought while a value of 20 is considered as oversold. Differences in the MFI (money flow indicator) and price action are significant. If the [...] -
Trix Indicator
TRIX INDICATOR price times volume The Trix Indicator (TI) shows the slope of a triple-smoothed exponential moving average. The term Trix is actually a shortcut of “triple exponential” and was developed by Jack Hutson in the 1980s. Given an n-day period, trix is calculated this way: • Smooth closing prices using an N-day exponential moving [...] -
Stochastic Oscillator
STOCHASTIC OSCILLATOR (SO) a momentum indicator that uses support and resistance levels Calculations Dr. George Lane promoted this indicator in the 1950s. “Stochastic” refers to the location of a current price in relation to its price range over a period of time. This method attempts to predict price turning points by comparing the closing price [...] -
Relative Strength Index (RSI)
RELATIVE STRENGTH INDEX (RSI) a momentum oscillator J. Welles Wider developed the RSI and published it in a 1978 book, “New Concepts in Technical Trading Systems”. It was also published in Commodities magazine (now Futures magazine) in June of the same year. Purpose The RSI is used as a trading indicator in the technical analysis [...] -
Parabolic SAR
PARABOLIC SAR (PS) used to find trends in market prices and securities J. Welles Wilder Jr. devised the Parabolic Stop and Reverse (SAR) to find trends in market prices or securities. The method can be used as a trailing stop loss based on prices tending to stay within a parabolic curve during a strong trend. [...]