RELIABILITY:Moderate · A long black day occurs
What it Means:Occurring in a downtrend, the Engulfing depicts an opening at a new low, followed by a high buy-in that closes at or above the previous day's open. This signifies that the downtrend has lost momentum and the bulls may be gaining strength. The Engulfing indicator is also the first two days of the Three O... Continue reading ...
RELIABILITY: Low / Moderate
How to identify it:
· Small real body at the upper end of the trading range · Lower shadow at least twice as long as the real body · No (or almost no) upper shadow There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (...
PATTERN: Reversal
· First day is a long black day · Second day is a doji that gaps in the direction of the previous trend · The shadows of the doji should not be long In a downtrend, the market bolsters the bears with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario generally shows the potential for a rally, as many positions ha...
· First day is usually a long black day · Second day is a doji that gaps in the direction of the previous trend · The third day is a white day, gapping in the opposite direction, with no overlapping In a downtrend, the market bolsters the bearish trend with a long black day and gaps open on the second day. However, the second day trades within a small range and closes at or near its open. This scenario definitely shows th... Continue reading ...
All of us know about the candlestick method of charting. In my last post. I have shown u how to plot a candlestick bar. The components of candle stick bar is quite similar to that of an OHLC bar, and I am sure that many of u wonder why should we prefer the candle stick bar against a simple OHLC bar? I did so in my early days
Its true that candle stick bar and OHLC bar are made from the same data, but the position of candle stick bar in the chart itself tells us about the possible way of future... Continue reading ...
How to plot a single OHLC bar
As already mentioned, its made up of open/high/low/close price of a given security.
A long straight line stands for the high and low where high is the highest point of that line and low is the lowest point of the line, which effectively defines the trading rangeThe open price is denoted by a tick on the left hand side and the clos price is denoted by a tick at the right hand side of the long straight line., viz the trading range
 How to plot a single candle stick b... Continue reading ...
Though thee are many types of chart but most important types are as follows
- Line chart
- Bar chart or OHLC chart
- Candle stick chart
Line chart
It is the very basic chart which consists of only closing price under a particular time frame, here, like any other chart, time scale remain along the X axis and price scale stays with Y axis and closing price of a security under a particular time frame is plotted and then joined by a line to get a line chart
Bar chart or ohlc chart As the name suggests this... Continue reading ...
The graphical representation of price action is the chart. It is so important to a technical analyst that often-technical analysts are called “chartist”. Without which, the very existence of a technical analyst will vanish, we can compare it to a rifle of a soldier, without a rifle, a soldier is also a lame duck. Just like that,without chart, a technical analyst can not survive in the market
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