PIERCING CANDLESTICK PATTERN

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PIERCING CANDLESTICK PATTERN


 

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CANDLE CHARTS

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  CANDLE CHARTS Learning objectives After studying this chapter the student should be able to understand: • Types of charts • The candlestick analysis • Pattern Psychology – investors’ psychology behind formation of candlestick pattern 2.1 The charts What is a chart? Charts are the working tools of technical analysts. They use charts to plot the price movements of a stock over specific time frames. It’s a graphical method of showing where stock prices have been in the past.A chart gives us a complete picture of a stock’s price history over a period of an hour, day, week, month or many years. It has an x-axis (horizontal) and a y-axis (vertical). Typically, the x-axis represents time; the y-axis represents price. By plotting a stock’s price over a period of time, we end up with a pictorial representation of any stock’s trading history.A chart can also depict the history of the volume of trading in a stock. That is, a chart can illustrate the number of shares that change hands over a...
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HEAD AND SHOULDERS PATTERN

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Head and Shoulders pattern The head and shoulders pattern can be either head and shoulders, top or head and shoulders bottom. The Charts are a picture of a head and shoulders movement, which portrays three successive rallies and reactions with the second one making the highest/lowest point.  3.2.1 Head and Shoulders (Top reversal) A Head and Shoulders (Top) is a reversal pattern which occurs following an extended uptrend forms and its completion marks a trend reversal. The pattern contains three successive peaks with the middle peak (head) being the highest and the two outside peaks (shoulders) being low and roughly equal. The reaction lows of each peak can be connected to form support, or a neckline As its name implies, the head and shoulders reversal pattern is made up of a left shoulder, head, right shoulder, and neckline. Other parts playing a role in the pattern are volume, the breakout, price target and support turned resistance. Lets look at each part individually, and then ...
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BACKTESTING IN TRADING

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  BACKTESTING A "MUST DO" FOR EVERY TRADER Backtesting is a process where a trader assesses how a strategy would have performed in the past. During backtesting, the trader follows strictly all strategy rules to get an objective view on the performance to see if something needs to be changed.
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