A chart pattern is a special formation on a stock chart that is used to identify the buying and selling signals, current trends and trend reversals. Chart patterns play a great role during technical analysis in stock market trading.
Though chart patterns are considered as forecasts of price directions, there is no guarantee that they show the direction of a trend for 100%. Usually some people say that chart patterns help them to predict stock prices and get profits. Others claim that they are something created by people’s subconscious. They believe that if there were a way to forecast the future stock prices and get profits by it, then these all would be unprofitable and not effective.
Chart patterns are divided into two categories: continuation and reversal.
Continuation patterns indicate that the current trend will resume when the stock pauses or “rests.” They are also knows as consolidation patterns because they show how buyers and sellers take a break before going further in the same direction. For example: if a stock is in an uptrend and then pauses, we expect that the market will breakout to the upside and continue the direction of the trend. And conversely.
The most common continuation patterns are triangles, flags and pennants. Triangles are very often used by traders. They are of three types: the symmetrical triangle, the descending triangle and the ascending triangle. These three vary in formation and significance.
Reversal patterns indicate that the current trend is about to be changed. The most popular reversal patterns are double top, double bottom, head-and-shoulders and reverse head-and-shoulders.
The most popular is the head-and-shoulders pattern. It just looks like its name. This pattern forms after an uptrend and shows that the current trend can reverse the previous trend.
Chart patterns are also used to make short-term or long-term forecasts. The data can be daily, weekly or intraday and chart patterns can be short as one day or long and can last for years.
We provide great chart platform for our users with extensive tools to do right choice in this uncertain market conditions. You can easily access to our chart by selecting chart button on a main menu or by this link http://ggfinances.com/ggchart. Below is the snapshot of our chart. Here we are going to explain how to use our charts.
On figure 1.2 we put numbers from 1 to 10.
1. Simply type stock ticker here that you looking for.
2. Here you can select the time intervals for your chart.
3. We have huge selection of indicators that you can use by just a clicking on this and selecting the indicator you looking for. It will show up below your chart.
4. Here you can select which index or stock you want to compare with your current chart.
5. Choose the type of chart that you want to use for your analysis. (candle, line, bars and so on)
6. Using this you can customize your chart, change the background color,style scale and so on.
7. When you are logged in you can just type the stock ticker you want to watch and press enter. it will add that stock to your watchlist on top right corner.
8. Shares in G+
9. Shares in Facebook
10. Shares in tweeter.
On a left side of the column we have tools to draw lines, shapes, add a text and much more. On figure 1.3 there is a snapshot one of the tool selection.
By clicking on a small arrow on a button it opens drop down menu with tools selection.
On a right side there are 3 sections (Figure 1.4)
1. Watchlist where you can add the stocks you follow and see it on your screen.
for this you have to register in our website. It is free. Just have to put your email
and create a password. We are not going to send you spam emails or share it
2.Here you can find some fundamental information about company for more information
simply click on Show More and it will pop up new window with more information.
3. This is a “Stocktwits market pulse” which shows latest tweets about selected stock
One of our best tools is the snapshot. After you have done some analysis, drew lines, pivot points, support and resistance lines and much more, most likely you would like to save it. With this tool you can make a snapshot of everything you have done and save it. You can also share it with your friends via facebook, g+ or Twitter.
Tool is located on top left corner right next to logo. (Figure 1.5)
If you have any questions about any of our tools feel free to contact us.
We are here to help you make a better decision.
Indicators aim at measuring the price movements, trends, stock price instability and momentum. They represent the calculation of the price and the volume. There are many types of indicators and they are mainly used to confirm price movements and chart patterns and provide buying and selling signals. The basic function of indicators is to warn, to verify and to forecast.
There are leading and lagging indicators, where the leading one is preceding the price movement and hence making them predictable, and the lagging is the indicator is used as a confirmation tool as it keeps after the price movement.
To tell you more, there are types of indicators constructions, dividing indicators to the ones that are in a bounded range and others that are out of that range. Those indicators that are in a range are called oscillators; they range from 0 to 100 and can identify signs of overbought and oversold conditions from 100 and down to zero. Those indicators that are out of the bounded range can also provide buying or selling signals, they also identify trend weakness or strength.
For identification of buying and selling signals by indicators traders mainly use crossovers or divergence. Crossovers are seen when the price moves through the moving average, or when various moving averages meet each other. Divergences are seen when the price trend and indicators trend move in opposite directions.
For the purposes of trends or buying and selling signals identifications most traders apply the indicators not solely but in common with other indicators.
Below is the list of several indicators.
Momentum indicators- helping to find out the speed at which the price is changing: Accumulation/Distribution, Money Flow Index, On Balance Volume
Oscillators: Average True Range, Chaikin Oscillator, Elder-Rays, Ichimoku Kinko Hyo, Moving Average Convergence/Divergence (MACD), Moving Average of Oscillator, Price Rate of Change, Relative Strength Index, Relative Vigor Index, Stochastic Oscillator, Ultimate Oscillator, Williams Percent Range
Most of this indicators you can find here http://ggfinances.com/ggchart by clicking on indicator's button and choosing the one from drop down menu.
In technical analysis to confirm the trend of a stock traders are often applying moving averages, using the close prices of the stock. Moving averages represent an average of the stock price for some period of time. The computation of an average helps the traders to eliminate the daily fluctuations of the price and detect the real trend.
Moving averages are considered as indicators that follow the trend. They aim at identifying the start, the progress and the reversal of the trend using the historical data on the chart. However, moving averages cannot forecast and predict the start and the end of the trend.
There are various types of moving averages which are being calculated through different methods; however, the logic about the averages is the same. The most popular moving averages are the simple, linear and exponential averages.
- Simple Moving Average (SMA) is one of the popular techniques used to calculate the price moving average. It is calculated by summing up the previous close prices for the selected time and divided by the number of the prices used. Likewise, for a 15 day moving average we take the previous 15 closing prices, add them together and then divide by 15.
- Exponential Moving Average (EMA) is a method of smoothing the averages for balancing the prior data. This average is more responsive compared to the other averages.
- Linear Weighted Average is not that much popular as the SMA or EMA, however, it is applied for balancing the issue of the equal weighting of the averages calculation. It is computed by adding all the close prices of the selected period, multiplying the sum by the data point place and then dividing the result by the amount of the number of periods. For instance, for a three day linear weighted average the present days ‘price is multiplied by 3, yesterday's by 2 and the first day in the time period range is got. In result when we get those numbers they are added together and then divided by the sum of the multipliers.
Most commonly, the moving averages are applied by traders to identify the trend or its reversals and also to confirm the support and resistance levels. For instance, when there is a movement through a basic moving average then it is a signal of trend reversal. There are cases, when traders apply pairs of averages to identify momentums; thus, when the short-term averages is higher than the long term one then it is a sign of uptrend and vice versa.
This indicator is available here.