Modules for Traders
Executing Technical Analysis
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Glossary of Executing Technical Analysis
- Line chart – A single line that connects stock prices is called a line chart.
- Bar charts – A chart that has open, high, low, and close data sets in a vertical line in the form of a bar. It’s also referred to as an open-high-low-close (or OHLC) chart.
- Candlestick charts – A chart that has open, high, low, and close data sets in a candle form.
- Support – A straight line that connects three or more of a stock’s data points. It usually indicates the stock is going down.
- Resistance – A straight line that connects three or more of a stock’s data points. It usually indicates the stock is going up.
- Trend – The directional movement of a stock price.
- Uptrend – Stocks are in an uptrend when they’re making higher highs and higher lows.
- Downtrend – Stocks are in a downtrend when they’re making lower highs and lower lows.
- Sideways trend – Stocks that trade in a range are in a sideways trend.
- Patterns – Price patterns are trends that occur in stock charts. The patterns form recognizable shapes.
- Triangle pattern – The pattern is in the form of a triangle.
- Rectangle pattern – The pattern that’s formed when stock trades sideways.
- Head and shoulder pattern – A reversal pattern that has three consecutive peaks.
- Double top and bottoms – Two consecutive peaks between two horizontal lines is called double top. Two consecutive bottoms between two horizontal lines is called double bottom.
- Triple top and bottoms – Three consecutive peaks between two horizontal lines is called triple top. Three consecutive bottoms between two horizontal lines is called triple bottom.
- Simple moving average – An average of the closing price of the stock over a specified number of periods.
- Volume – The measure of the number stock’s shares traded on the stock exchange in a day or a period of time.
- Relative Strength Index – The Relative Strength Index (or RSI) is a measure of the overbought and oversold position of a stock.
- Moving Average Convergence Divergence – Moving Average Convergence Divergence (or MACD) is the difference between two moving averages.
- Bollinger Bands – Bollinger Bands are a channel of moving averages over the stock prices.
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