Technical Trading Techniques

Candle Charts : Lightening the Path!

2008-02-11T19:12:00.000+05:30

Each time period produces a price bar called a candle. Each candle has a different characteristic that represents the difference or distance between the high, low, open, and close. Candle charting techniques can be used on data from whatever time period you choose—minutes, hours, days, weeks, or months. It lends itself to pattern recognition, trend lines, support and resistance, channel lines, and all the other typical technical analysis features. Candle analysis usually is not limited to a single candle but is based on several bars forming a pattern and on the location of that candle or pattern within overall market action.
The key feature of the candle is the body, the difference between the open and close prices. Using the conventional way of displaying candles, a dark body indicates that the closing price was below the opening price, and a white or hollow body indicates that the closing price was higher than the opening price.

Next> Candle Patterns

Types Of Bar Charts

2008-02-08T20:29:00.000+05:30

Key reversal The bearish key reversal makes a higher high than the previous time frame and usually closes below the prior time frame’s close and the general trend direction. This occurrence is frequently accompanied by unusually strong volume and indicates the trend is reversing.

The outside bar occurs when the current range takes out the previous time frame’s high and low, but the close is consistent with the current trend. It usually signals the continuation of the market’s direction.

The settlement price reversal bar occurs when the bar moves in the same direction as the previous time frame’s bar—a higher high and higher low for an uptrending market—but closes lower than the previous time frame’s settlement price.

The inside bar is the current bar’s high and low are within the previous time frame’s high and low— that is, the whole current range is within the previous bar’s range. The close is not considered important by most chartists.

Bar Charts

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The concept of a bar chart is simple. On a graph the horizontal axis represents time, and the vertical axis represents price levels. Within that graph, a single bar or vertical line will represent the range or the high and low points that prices reached during a given time period. A small hash line or horizontal mark on the left side of the bar identifies the opening price; another hash mark or horizontal line on the right side of the bar indicates the closing price for that time period. The time represented by the vertical bar could be 1 minute, 5 minutes, 60 minutes, a day, a week, a month, or even a year.

The Art of Charts

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Determining the trend or direction of prices is one of the main objectives of chart analysis. Pattern recognition leading up to a chart setup is another purpose of chart work. The more times you identify the characteristics of a pattern and the frequency it repeats itself. There are three main popular charting techniques: bar charts, point-and-figure charts, and candlestick charts.

Welcome to TechniTrading

2008-02-04T09:19:00.000+05:30

A warm welcome to all of you to our blog.
This blog is primarily intended to integrating the
numbers to help us confirm, validate, and identify entry and exit points
when trading. We will take help from mathematically calculated support
and resistance numbers, or pivot points, work on different markets and
should be derived at different time frames.

Trading is like riding an elevator. You get on if you want to go up and then get out once you are where you want to be. If you want to go up but then realize that you are going down instead, bail out. Get off the elevator and get back on another ride going up. Risk management and turnover are the keys to successful trading.

Welcome to the world of Technical Trades.