Moving averages are important components of many technical indicators. The Endpoint Moving Average (EPMA) is a popular method of plotting a line that uses linear regression instead of averages, which reduces the noise of market price activity and can reveal or follow trends. Compared to a simple moving average, this method hews more closely to data and lags less. A moving average line averages prices in a given time period (such as the 30 days leading up to each day), and plots that point on a chart; when connected, the collection of points becomes the moving average line. Continue reading...
Earnings momentum is an indicator that is computed by not just looking at the earnings performance and estimations of a company, but looking at the positive or negative direction of earnings and the acceleration in that direction. Momentum in securities is much like momentum in physics. Where there is momentum, it is hard to slow things down and charge direction. Instead of looking only at the growth of earnings, which could be the slope of the inclining line, momentum also looks for increases in change to the growth rate, making earnings growth more parabolic or exponential. Continue reading...
The Rising Wedge pattern forms when prices seem to be spiraling upward, and two upward sloping trend lines are created with the price hitting higher highs (1, 3, 5) and higher lows (2,4). The two pattern lines intersect to form an upward sloping triangle. Unlike Ascending Triangle patterns, however, both lines need to have a distinct upward slope, with the bottom line having a steeper slope. This pattern is commonly associated with directionless markets since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. However, there is a distinct possibility that market participants will either pour in or sell out, and the price can move up or down with big volumes (leading up to the breakout). Continue reading...
Unlock the power of trendlines in technical analysis! Discover how to draw, interpret, and apply trendlines to boost your trading success. Whether you're a seasoned pro or just starting out, mastering trendlines can be a game-changer for your trading strategies. Don't miss out! #TradingTips #TechnicalAnalysis Continue reading...
The Rising Wedge pattern forms when prices appear to spiral upward, with higher highs (1, 3, 5) and higher lows (2,4) creating two up-sloping trend lines that intersect to form a triangle. Unlike Ascending Triangle patterns, both lines need to have a distinct upward slope, with the bottom line having a steeper slope. This pattern is commonly associated with directionless markets, since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. There is a distinct possibility that market participants will sell out, and the price can move down with big volumes (leading up to the breakout). Continue reading...
The Rising Wedge pattern forms when prices appear to spiral upward, with higher highs (1, 3, 5) and higher lows (2,4) creating two up-sloping trend lines that intersect to form a triangle. Unlike Ascending Triangle patterns, both lines need to have a distinct upward slope, with the bottom line having a steeper slope. This pattern is commonly associated with directionless markets since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. There is a distinct possibility that market participants will sell out, and the price can move down with big volumes (leading up to the breakout). Continue reading...
The Symmetrical Triangle Bottom pattern forms when the price of a security fails to retest a high or a low and ultimately forms two narrowing trend lines. As the support and resistance levels consolidate, it forms a triangle (15). Symmetrical Triangles are characterized by the upper line sloping downward and lower line sloping upward. The price movement inside the triangle should fill the shape with some uniformity, without leaving large blank areas. Continue reading...
The Falling Wedge pattern forms when the price of a security appears to be spiraling downward, and two down-sloping lines are created with the price hitting lower lows (1, 3, 5) and lower highs (2, 4). The two pattern lines intersect to form a narrow triangle. Unlike Descending Triangle patterns, however, both lines need to have a distinct downward slope, with the top line having a steeper decline. Continue reading...
The Falling Wedge pattern forms when prices appear to spiral downward, with lower lows (1, 3, 5) and lower highs (2, 4) creating two down-sloping trend lines that intersect to form a triangle. Unlike Descending Triangle patterns, however, both lines need to have a distinct downward slope, with the top line having a steeper decline. This pattern is commonly associated with directionless markets, since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. However, there is a distinct possibility that market participants will either pour in or sell out, and the price can move up or down with big volumes (leading up to the breakout). Continue reading...
The Falling Wedge pattern forms when prices appear to spiral downward, with lower lows (1, 3, 5) and lower highs (2, 4) creating two down-sloping trend lines that intersect to form a triangle. Unlike Descending Triangle patterns, however, both lines need to have a distinct downward slope, with the top line having a steeper decline. This pattern is commonly associated with directionless markets since the contraction (narrowing) of the market range signals that neither bulls nor bears are in control. However, there is a distinct possibility that market participants will either pour in or sell out, and the price can move up or down with big volumes (leading up to the breakout). Continue reading...
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A yield curve is an illustration of the current duration-to-yield relationship for bonds of the same credit rating but different durations. As a general rule, the longer the duration of the loan, the more risk you take on (since you don't know what might happen with that corporation in the future), and therefore, you demand a higher reward (i.e., higher coupon). The yield curve for any bond (not just the US Treasury Bonds) changes daily based on many economic and market factors. Continue reading...
Unlocking the Potential of the Rising Wedge Pattern in Trading Discover the bearish reversal signal of the rising wedge pattern. Learn its key features and how to use it for strategic trading. Recognize, confirm, and effectively trade this powerful chart formation for success. #TradingTips #TechnicalAnalysis Continue reading...
Alan Andrews designed Andrew’s Pitchfork to define a trend with support and resistance lines around a median line, all three of which are derived from three points at peaks and troughs around the onset of a current trend. The overlay takes the shape of a trident or pitchfork, with Andrews calling the lines “tines,” after a pitchfork’s prongs. The origin point is placed at the location of a major trend reversal or a definitive support/resistance level, forming beginning of the pitchfork’s “handle.” Once the incline of the pitchfork is suitable, traders can attempt to use it for indications of overbought/oversold conditions, or to indicate a transition to a new trend. Continue reading...
Dive into the intricacies of the Channel Down (Bearish) pattern in stock trading! Uncover expert insights on how to identify, interpret, and strategically leverage this crucial pattern for informed trading decisions. Explore the psychological dynamics and risk management techniques essential for navigating the volatile stock market. Perfect for traders looking to enhance their technical analysis skills and gain an edge in predicting market downtrends. Get ready to transform your trading approach with this comprehensive guide! Continue reading...
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The Three Falling Peaks pattern forms when three minor Highs (1, 3, 5) arrange along a downward-sloping trend line. This pattern often emerges at the end of a rising trend, when a pair slowly rolls over. It potentially indicates sellers moving in to replace buyers, which pushes the price lower. If the price breaks out from the bottom pattern boundary, day traders and swing traders should trade with the DOWN trend. Consider selling the pair short or buying a put option at the downward breakout price level. To identify an exit, compute the target price by subtracting the pattern’s height (maximum price minus minimum price within the pattern) from the breakout level the lowest low. When trading, wait for the confirmation move, which is when the price moves below the breakout level. Continue reading...
The Three Rising Valleys pattern forms when three minor Lows (1, 3, 5) arranged along an upward sloping trend line. It often appears at the end of a declining trend – an indication that buyers are overtaking sellers, which ultimately pushes the price higher. This type of formation happens when investors shift into buying mode following a consolidation period. Once the price breaks out from the top pattern boundary, day traders and swing traders should trade with an UP trend. Consider buying a security or a call option at the breakout price level. To identify an exit, compute the target price level by adding the pattern’s height (highest price minus the lowest price within the pattern) to the breakout level (the highest high). When trading, wait for the confirmation move, which is when the price rises above the breakout level. Continue reading...
The Three Falling Peaks pattern forms when three minor Highs (1, 3, 5) arrange along a downward-sloping trend line. This pattern often emerges at the end of a rising trend, when a security slowly rolls over. It potentially indicates sellers moving in to replace buyers, which pushes the price lower. If the price breaks out from the bottom pattern boundary, day traders and swing traders should trade with the DOWN trend. Consider selling the security short or buying a put option at the downward breakout price level. To identify an exit, compute the target price by subtracting the pattern’s height (maximum price minus minimum price within the pattern) from the breakout level the lowest low. When trading, wait for the confirmation move, which is when the price moves below the breakout level. Continue reading...
A Channel Up pattern shows a clearly defined uptrend and describes the behavior of the price contained between upward sloping parallel lines. Higher highs and higher lows characterize this price pattern. This pattern is created via a lower trendline connecting the swing lows (1, 3, 5), and an upper channel line that joins the swing highs (2, 4, 6). A breakout above a Channel Up’s resistance line points to a continuation of the growth momentum, while a breakdown below the pattern’s support line can demonstrate a possible trend change. Continue reading...