Category Archives: Technical Analysis

Investment Technology

As always, there are exceptions to all rules. The Gapping Plays are those exceptions. As  previously discussed, the gap at the top of a trend is the exhaustion gap. The same is said for the gap at the bottom of a trend. The appearance of those gaps is either the last gasp exhilaration (at the top) or the last gasp panic (at the bottom).

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Profits With Candlesticks Analysis

How Do They Produce Profits With Candlesticks? Gaps (Ku) are called windows (Mado) in Japanese Candlestick analysis. A gap or window is one of the most misunderstood technical messages. Most investment experts advise not to buy after a gap. This is true only about ten percent of the time. The other 90% of the time, the gaps will reveal powerful high profit trades. Candlestick

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Primary Functions

Again, although Bollinger Bands can help generate buy and sell signals, they are not designed to determine the future direction of a security. The bands were designed to augment other analysis techniques and indicators. By themselves, Bollinger Bands serve two primary functions:   To identify periods of high and low volatility To identify periods when prices are at extreme, and possibly unsustainable, levels.  

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Pillars of Technical Analysis

This blog focuses on the 3 pillars of Technical Analysis and lays the foundation for the so called Study of charts.  I.Price discounts everything The statement “price discount everything” forms the cornerstone of of technical analysis. The chartists believe that the prices of the market reflect all the possible causes such as fundamental, political, psychological etc. Therefore the study of prices and volume is

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Dow theory’s six basic tenets

Charles Dow (left) & Edward Jones (right) established Dow Jones & Company in 1882.   They created the two indices i.e., the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) to provide a good indication of the health of the economy. Dow explored the relationship between the two indices and published his theories in editorials in the Wall Street Journal,

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