Previously, we looked at tools and indicators based around trend and momentum that confirmed price action. In this article, we will look at three further types of price confirmation tool: Volatility, Volume & Sentiment. These tools could help give you supportive, independent information in your analysis of any given asset. What is presented here, is not an exhaustive list of the technical tools used in this space, but some of the more generic and popular ones. [Read more…]
Technical Analysis (Part 16) – Price Confirmation Tools (PCT): Trend & Momentum
Last week, we looked at the fascinating concept of Ichimoku. We now go up a gear in terms of our analysis. So far, we’ve mostly been looking at tools or analysis directly on price. We’re now going to look at various tools and indicators that are a derivative of the price action. They usually sit under the main price chart. Their role is to help confirm the price action and give the user another objective piece of analysis to aid decision making. Although, a lot of that decision making can become very subjective! I like to break my price confirmation tools down into 5 distinct types of indicators: [Read more…]
Technical Analysis (Part 7): Market Breadth
Last week in Part 6, we looked at Equivolume. This week, we look at one of the more established and quite straight forward technical analytical approaches to gauging the sentiment of any given stock market: Market Breadth.
What is market breadth?
Market breadth is all about upward, downward and sideways movement and range, principally applied to stocks and their stock markets, to gain an understanding of whether the overall market is bullish, bearish or flat. The concept of market breadth is used to measure the ‘health’ of any given stock market. [Read more…]
Technical Analysis (Part 6): Equivolume
Last week in Part 5, we looked at Point and Figure charts. This week, we look at one of the relatively newer style of charting methods that is yet to catch on in a more global sense: Equivolume. The rapid advancement in technical analysis and charting package technology over the last half of the 20th century, has allowed for many more innovative technical analysis solutions to come to the fore. One such method is that of Equivolume. [Read more…]
Technical Analysis (Part 3): Line & Bar Charts
Last week we looked at some of the basic rules you need to know in technical analysis. This week we start our focus on the actual tools of the trade, beginning with a look at Line Charts and Bar Charts. Charts are like maps to navigate. The analyst has to pilot his or her way through the data, translate the stories and come up with a forecast as to the future journey they think any given asset will take. One chart can tell a thousand stories.
In this and the next four blogs, I am going to cover the rudiments of what I call the ‘common core’ suite of charts. These include: Line & Bar charts, Candlesticks, Point and Figure, Equivolume and Market Profile. The more exotic sounding charts: Heikin Ashi, Renko, 3 Line and Kagi will be covered later in the series. We start though by looking at two forms of chart: the Line Chart and the Bar Chart. Both have their own pro’s and cons but when diving into technical analysis, these are a great place to start. [Read more…]
