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$STEV BarChart Trader's Cheat Sheet
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Descending Trend Channel: Descending trend channels are basic chart patterns used in technical analysis. A descending trend channel is formed by drawing two trendlines, one through the high prices for an asset and one through the low prices for the asset. If the trend in prices is downward, then the space between the trend lines forms a descending trend channel.
Descending trend channels, like ascending trend channels, are a tool for determining whether the short-term trend in price will continue. As long as prices remain within the region defined by the trend channel, traders expect the overall trend to go on as it is. Once prices break out of the channel, a strong signal either to buy or sell is generated. If prices break upward out of the channel, the signal is bullish; if prices break downward, the signal is bearish.
Descending trend channels often appear within an overall uptrend in prices, and represent either a continuation of the trend or a reversal of the trend, depending on the direction of the break.
Daily Candlestick Chart for ADVC
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$OLEPF BarChart Trader's Cheat Sheet
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Central Bank: Central banks play a key role in the currency markets because of their power over monetary policy. They have a direct influence over money supply, which in turn affects demand and price of the currency. Through the use of different policies, central banks can try to manipulate the markets so that they can keep their currency at specific levels. Some countries and their central banks try to peg their currency to that of another currency or basket of currencies (for example, China to the U.S.).
The central bank can participate in the forex market by buying and selling their currency at the spot market in order to keep it from changing too much. Another motivation for central banks is to keep the local currency at a specific price in order to make their local economy more attractive for international trade. If a country’s currency appreciates too quickly, it could actually make it less appealing to importers.
Remember that many transactions have to use the local currency. Thus, if currency that is needed rises too quickly, it effectively makes goods more expensive to foreigners, which in turn, hurts trade. To counter this, the central bank may intervene in the market by selling its currency and buying up other major currencies. This in effect, weakens the local currency so as to make it more appealing to foreign importers.
While the exact value of what percentage such central bank transactions take up isn’t known, take note that because these are the banks of national governments, such interventions can have a much larger impact on the market than any single commercial bank.
Daily Candlestick Chart for PLSB
[img]stockcharts.com/c-sc/sc?s=PLSB
Trend Lines
Technical analysis is built on the assumption that prices trend. Trend Lines are an important tool in technical analysis for both trend identification and confirmation. A trend line is a straight line that connects two or more price points and then extends into the future to act as a line of support or resistance. Many of the principles applicable to support and resistance levels can be applied to trend lines as well. It is important that you understand all of the concepts presented in Support and Resistance before you continue.
$QASP BarChart Trader's Cheat Sheet
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Daily Candlestick Chart for GRAS
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$AOSDF BarChart Trader's Cheat Sheet
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EquiVolume Chart Calculation
An EquiVolume box consists of three components: price high, price low and volume. The price high forms the upper boundary, the price low forms the lower boundary and volume dictates the width. EquiVolume boxes are black when the close is above the prior close and red when the close is below the prior close.
Volume is normalized to show width relative to the look-back period. For a four month daily chart, each day's volume would be divided by total volume for the look-back period (four months). As such, the width of each box represents the day's percentage of total volume for the look-back period. Big volume days take up more space on the X axis (date). Chart 2 shows normal high-low-close bars with volume for Kraft Foods (KFT). It is a pretty normal looking chart with a normal X axis. Chart 3 shows this same four month period using EquiVolume boxes. The wide boxes show relatively high volume days, while the thin boxes show relatively low volume days. Also notice that many wide boxes can expand the entire month on the X axis. January is much wider on the EquiVolume chart than with normal high-low-close bar chart.
Daily Candlestick Chart for CRPZ
[img]stockcharts.com/c-sc/sc?s=CRPZ
$OTMN BarChart Trader's Cheat Sheet
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Classic Heikin-Ashi TA Patterns
Classic patterns and trend lines can also be used on Heikin-Ashi charts. In contrast to normal candlesticks, Heikin-Ashi Candlesticks are more likely to trend with strings of consecutive filled (black) candlesticks and strings of consecutive hollow (white) candlesticks. The chart below shows Apache (APA) falling with a string of filled candlesticks in late October. The Heikin-Ashi candlesticks formed a falling wedge and APA broke resistance with a surge in early November. A triangle consolidation then took shape as the stock consolidated in November. The upside breakout signaled a continuation of the bigger uptrend.
The next chart shows Monsanto (MON) with a classic correction in June 2011. The Heikin-Ashi Candlesticks were more than adequate to identify this correction and subsequent breakout. Notice how a falling channel formed as the stock retraced around 61.80% of the prior decline. The big breakout in late June signaled an end to this correction and resumption of the advance.
Daily Candlestick Chart for GDSI
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Bullish Reversal Candlestick Patterns: The Bullish Reversal Candlestick Pattern has over 14 different pattern styles. These include the Bullish Engulfing, the Piercing Pattern, the Harami, the Hammer, the Inverted Hammer, the Morning Star, and the Abandoned Baby. To use Bullish Reversal Candlestick Patterns succesfully, look for the pattern in a downtrend and use Bullish Confirmation to validate your analysis. Further reinforce your results by using additional analysis to confirm the patterns.
$HRDN BarChart Trader's Cheat Sheet
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Daily Candlestick Chart for GMXS
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$COHO BarChart Trader's Cheat Sheet
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Daily Candlestick Chart for TRUE
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Asset Purchases: In recent events, asset purchases usually pertains to the purchasing of government bonds to lower interest rates, inject capital into the economy or both. It is an unconventional monetary policy used by central banks to stimulate the economy, otherwise know as "quantitative easing."
$IDPIQ BarChart Trader's Cheat Sheet
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Daily Candlestick Chart for STVF
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Dollar and Commodities
While the Dollar and currency markets are part of intermarket analysis, the Dollar is a bit of a wild card. As far as stocks are concerned, a weak Dollar is not bearish unless accompanied by a serious advance in commodity prices. Obviously, a big advance in commodities would be bearish for bonds. By extension, a weak Dollar is also generally bearish for bonds. A weak Dollar acts an economic stimulus by making US exports more competitive. This benefits large multinational stocks that derive a large portion of their sales overseas.
What are the effects of a rising Dollar? A countries currency is a reflection of its economy and national balance sheet. Countries with strong economies and strong balance sheets have stronger currencies. Countries with weak economies and big debt burdens are subject to weaker currencies. A rising Dollar puts downward pressure on commodity prices because many commodities are priced in Dollars, such as oil. Bonds benefit from a decline in commodity prices because this reduces inflationary pressures. Stocks can also benefit from a decline in commodity prices because this reduces the costs for raw materials.
$EDIG BarChart Trader's Cheat Sheet
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Daily Candlestick Chart for MRNJ
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$PSID BarChart Trader's Cheat Sheet
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Daily Candlestick Chart for GRBG
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$GOVX BarChart Trader's Cheat Sheet
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CFD: In finance, the term 'CFD' stands for Contract For Difference. This is a contract between two parties, typically described as "buyer" and "seller" to exchange the difference in value of a financial instrument between the time at which the contract is opened and the time it is closed. In effect CFDs are financial derivatives that allow traders to take advantage of prices moving up or prices moving down on underlying financial instruments and are often used to speculate on those markets
Daily Candlestick Chart for CMRZF
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$BRYN BarChart Trader's Cheat Sheet
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Bond Auction: A government bond auction is the process of selling short and long-term government bonds to investors in an attempt to minimize the cost of financing national debt.
The process starts with the central bank announcing how much money it intends to borrow. Details like the term length of the bonds and the date of the auction are included in the announcement.
Interested market players like broker-dealers, institutions, and individual investors then submit the amount of bonds that they’re willing to buy and bid at the yield that they want to be paid. Take note that the specific processes of bond auctions are different across countries.
The success of a government bond auction can be measured by the bid-to-cover ratio, a metric that measures how much the total bids exceed the initial amount that the central bank was aiming for.
For example, an auction collects bids worth $100 billion, but the central bank had only aimed for $45 billion. The bid-to-cover ratio is 2.22 ($100/$45). An auction with a bid-to-cover ratio of 2.00 or higher is usually considered as successful.
Traders also look at the change in bond yields after each auction. A higher yield means that investors are demanding a higher price for holding the government bond. Alternatively, a lower bond yield usually signals higher investor confidence and lower borrowing costs for the government (which would make it easier to pay debts).
EquiVolume boxes put price action and volume together for easy visual analysis. EquiVolume boxes plot the high-low range for length and volume for width. Thin boxes show relatively low volume, while wide boxes show relatively high volume. Square or wide boxes reflect high volume with relatively little price movement. Even with this added volume dimension, chartists can easily spot traditional patterns, support/resistance breaks and reversals.
Daily Candlestick Chart for MAXE
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$GHRI BarChart Trader's Cheat Sheet
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Descending Triangle: A descending triangle is a simple chart pattern used in technical analysis. The descending triangle is formed from two trendlines, one for high prices and one for lows. The upper trendline of the triangle is a descending trendline, while the lower trendline is a horizontal trendline. The resulting shape is a right triangle whose hypotenuse moves downward over time.
In order to confirm a descending triangle on an asset's chart, traders must note two reaction lows of similar magnitude and two reaction highs, each declining in price over time. There should be a reasonable amount of distance between each low or high. Descending triangles usually form and develop over a one to three month period.
The descending triangle is always a bearish pattern, indicating a strong sell signal. Prices on the upper trendline continue to decline, narrowing the triangle formation, until the level of support represented by the lower trendline is broken. When a level of support is broken, it becomes a level of resistance, confirming the overall downward trend of the asset's price over time.
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Investor Hub Alerts: Sign up for 'STOCKGOODIES PLAYS OF THE WEEK ' E-Mail List UPDATE; 5-1-22 courtesy of charting /\ wit tweezer top calls /\ Tony @Montana_Trades Really good study sheet on Candlestick Patterns [-chart]pbs.twimg.com/media/FRn8188XMAAdZvk?format=jpg&name=small[/chart]
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