Glossary topic
Technical Analysis
91 terms
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Why this topic matters
Technical analysis studies price and volume to locate levels, trends, and shifts in momentum. This topic collects the indicators, candlestick and chart patterns, moving averages, volume profiles, and price-action concepts traders use to time entries and exits.
Every entry works the calculation or construction with real numbers and states what the signal measures and where it falls short. Pair the chart read with options flow and dealer positioning, then model the position in the options calculator before the trade.
Topic questions
Technical Analysis FAQ
A
8 termsAccumulation/Distribution Line
The Accumulation/Distribution Line is a cumulative volume indicator that weights each bar’s volume by where the close falls inside that bar’s high-low range.
Advance-Decline Line
The Advance-Decline Line is a market breadth indicator that keeps a running total of advancing securities minus declining securities in a defined universe.
Anchored VWAP
Anchored VWAP (AVWAP) is a volume-weighted average price calculated from a chosen starting bar, such as an earnings session, instead of resetting each session.
Aroon Indicator
The Aroon indicator is a pair of lines, Aroon Up and Aroon Down, that measure how many periods have passed since a lookback’s highest high and lowest low.
Ascending Triangle
An ascending triangle is a chart pattern with flat resistance above and rising lows below, where a breakout through resistance activates an upside setup.
Average Directional Index (ADX) and DMI
The Average Directional Index (ADX) is a 0-to-100 indicator that measures trend strength by smoothing the imbalance between the +DI and −DI directional lines.
Average True Range (ATR)
Average True Range (ATR) is a volatility indicator that averages each bar’s true range, including any gap from the prior close, in the instrument’s price units.
Awesome Oscillator
The Awesome Oscillator is a momentum histogram that plots the 5-period simple moving average of median price minus the 34-period simple moving average of median price.
B
3 termsBollinger Bands
Bollinger Bands are a volatility indicator that plots a moving average with upper and lower bands set a multiple of standard deviation above and below it.
Break of Structure and Change of Character
Break of structure (BOS) is a swing-point break in the direction of the trend, while change of character (CHoCH) is the first break against that trend.
Breakout
A breakout is a price move beyond a defined support, resistance, range, trendline, or chart-pattern boundary.
C
9 termsCandlestick Chart
A candlestick chart is a price chart that draws each interval’s open, high, low and close as a candle with a real body and upper and lower shadows.
Candlestick Patterns
Candlestick patterns are named arrangements of open, high, low and close across one or more completed candles, read as reversal or continuation setups.
Chaikin Money Flow (CMF)
Chaikin Money Flow (CMF) is a volume indicator that averages where each bar closes within its high-low range, weighted by volume, over a set window.
Chandelier Exit
The Chandelier Exit is a volatility-based trailing stop set a multiple of Average True Range below the highest high for longs or above the lowest low for shorts.
Chart Patterns
Chart patterns are recognizable price structures, such as rectangles, triangles, flags and head and shoulders, that traders read as reversal or continuation setups.
Choppiness Index
The Choppiness Index (CHOP) is an indicator that compares the sum of recent true ranges with the window’s high-low range to separate choppy markets from trending ones.
Commodity Channel Index (CCI)
The Commodity Channel Index (CCI) is a momentum oscillator that measures how far typical price sits from its moving average in units of mean absolute deviation.
Cumulative Volume Delta (CVD)
Cumulative volume delta (CVD) is a running total of classified buy volume minus classified sell volume, measured from a selected starting point.
Cup and Handle
A cup and handle is a bullish continuation chart pattern in which a rounded base and a smaller pullback near the rim set up a breakout through resistance.
D
9 termsDark Cloud Cover and Piercing Pattern
Dark cloud cover and the piercing pattern are two-candle reversal patterns in which the second candle gaps beyond the first and closes inside its body, past the midpoint.
Death Cross
A death cross is a bearish moving average crossover in which a shorter average falls below a longer one, most commonly the 50-day below the 200-day.
Descending Triangle
A descending triangle is a chart pattern with flat support below and falling highs above, where a break below support activates a downside setup.
Divergence (Bullish and Bearish)
Divergence is a mismatch between the direction of two price swing points and the direction of an indicator, such as RSI or MACD, read at matching points.
Doji Candlestick
A doji is a candlestick whose open and close are equal or nearly equal, leaving little or no real body inside the period’s high-low range.
Donchian Channels
Donchian Channels are a price channel indicator that plots the highest high and lowest low over a set lookback, with a midline halfway between them.
Double Top and Double Bottom
A double top is a bearish reversal chart pattern of two similar peaks around a trough, and a double bottom is its bullish mirror of two similar lows.
Dow Theory
Dow Theory is a framework for classifying the broad market trend that requires the Industrials and Transports averages to confirm each other.
Dragonfly and Gravestone Doji
A dragonfly doji has its tiny body near the high above a long lower shadow, and a gravestone doji has its tiny body near the low below a long upper shadow.
E
3 termsElliott Wave Theory
Elliott Wave Theory is a technical analysis method that labels price swings as five-wave motive moves and corrective patterns nested by degree.
Engulfing Candlestick (Bullish and Bearish)
An engulfing candlestick pattern is a two-candle reversal signal in which the second real body fully covers the first and closes in the opposite direction.
Exponential Moving Average (EMA)
An exponential moving average (EMA) is a moving average that gives recent prices more weight, updating each period with a smoothing factor of 2 / (n + 1).
F
4 termsFair Value Gap (FVG)
A fair value gap (FVG) is a three-candle pattern in which the first and third candle ranges do not overlap, leaving a price band traders watch on retracements.
Fibonacci Extension
A Fibonacci extension is a price projection that, in its standard form, adds ratios such as 1.272 and 1.618 of an impulse leg to a pullback point to set targets.
Fibonacci Retracement
A Fibonacci retracement is a charting tool that marks how much of a price swing has been given back, using levels at 23.6%, 38.2%, 50% and 61.8% of the move.
Flag Pattern
A flag pattern is a continuation chart pattern in which a sharp price move, the pole, is followed by a brief pause between roughly parallel boundaries.
G
2 termsGap Up and Gap Down
A gap up occurs when a stock opens above the prior session’s close and a gap down when it opens below it, with the gap measured from that prior close.
Golden Cross
A golden cross is a bullish moving average crossover in which a shorter average rises above a longer one, most commonly the 50-day above the 200-day.
H
6 termsHammer Candlestick
A hammer is a candlestick with a small body near the high and a long lower shadow that forms after a decline and marks a bullish reversal setup.
Hanging Man
A hanging man is a candlestick with a small body near the high and a long lower shadow that forms after an advance and marks a bearish reversal setup.
Harami (Bullish and Bearish)
A harami is a two-candle pattern in which a small real body forms inside the larger real body before it, after a decline (bullish) or an advance (bearish).
Head and Shoulders Pattern
A head and shoulders pattern is a reversal chart pattern of three peaks with the middle one highest, confirmed when price breaks the neckline below them.
Heikin Ashi
Heikin Ashi is a candlestick-style chart that plots averaged prices, with each close averaging the raw OHLC and each open set at the prior body midpoint.
Hull Moving Average (HMA)
The Hull Moving Average (HMA) is a moving average that combines three weighted averages to track price with less lag than an SMA or EMA of the same length.
I
1 termK
1 termL
2 termsLinear Regression Channel
A linear regression channel is a price channel built from a least-squares trend line fitted over a set lookback, with parallel bands a chosen deviation away.
Liquidity Sweep
A liquidity sweep is a move beyond a prior high or low, where stop orders can rest, followed by a close back across that level within a set number of bars.
M
6 termsMarket Breadth
Market breadth is a measure of how many stocks in an index or other universe take part in a move, such as advancing versus declining issues.
Market Structure (Technical Analysis)
Market structure is the sequence of swing highs and lows on a chart: higher highs and higher lows define an uptrend, lower highs and lower lows a downtrend.
Money Flow Index (MFI)
The Money Flow Index (MFI) is a 0–100 oscillator that weights typical price by volume and shows what share of recent money flow came in periods of rising typical price.
Morning Star and Evening Star
A morning star is a three-candle bullish reversal pattern that forms after a decline, and an evening star is its bearish mirror image after an advance.
Moving Average Convergence Divergence (MACD)
Moving Average Convergence Divergence (MACD) is a trend and momentum indicator that subtracts the 26-period EMA from the 12-period EMA and plots a signal line.
Moving Average Crossover
A moving average crossover is the bar where a faster moving average crosses a slower one, read as bullish when it moves above and bearish when it moves below.
O
4 termsOn-Balance Volume (OBV)
On-Balance Volume (OBV) is a running total that adds a bar’s volume when the close rises and subtracts it when the close falls, used to confirm price trends.
Opening Range Breakout (ORB)
An opening range breakout (ORB) is an intraday strategy that trades a move beyond the high or low of a session’s opening interval, such as the first 15 minutes.
Order Block
An order block is a price zone drawn from the last opposing candle before a strong impulse move, which traders watch as support or resistance when price returns.
Overbought and Oversold
Overbought and oversold are labels for indicator readings above an upper threshold or below a lower one, such as an RSI above 70 or below 30.
P
5 termsParabolic SAR
Parabolic SAR is a trend-following stop-and-reverse indicator that plots trailing dots below a rising price or above a falling price and flips sides on a reversal.
Pennant
A pennant is a continuation chart pattern in which a sharp price move, the pole, is followed by a brief pause between converging trendlines.
Pivot Points
Pivot points are price levels calculated from the prior period’s high, low and close that traders use as support and resistance for the next period.
Point and Figure Chart
A point and figure chart plots columns of X and O marks for rising and falling prices, adding a new column only when price reverses by a set number of boxes.
Point of Control (POC)
The point of control (POC) is the price row with the highest traded volume in a volume profile, marking where the most shares or contracts changed hands.
R
5 termsRate of Change (ROC)
The Rate of Change (ROC) is a momentum indicator that measures the percentage change between the current close and the close a set number of periods earlier.
Rectangle Pattern
A rectangle pattern is a chart pattern where price moves sideways between roughly horizontal support and resistance until it breaks out through one boundary.
Relative Strength Index (RSI)
The Relative Strength Index (RSI) is a momentum oscillator that compares smoothed gains with smoothed losses on a 0-to-100 scale, traditionally over 14 periods.
Relative Volume (RVOL)
Relative volume (RVOL) is the ratio of a stock’s current trading volume to its average volume over comparable past periods, such as the same time of day.
Renko Chart
A Renko chart is a price chart made of equal-sized bricks that are added only when price moves a set box size beyond the last brick, ignoring time.
S
7 termsShooting Star
A shooting star is a candlestick with a small body near the low and a long upper shadow that forms after an advance and marks a bearish reversal setup.
Simple Moving Average (SMA)
A simple moving average (SMA) is the arithmetic mean of the most recent n prices, recalculated each period so that every price in the window has equal weight.
Smart Money Concepts (SMC)
Smart Money Concepts (SMC) is a price-action framework that organizes market structure, liquidity sweeps, order blocks and fair value gaps into a trading plan.
Stochastic Oscillator
The stochastic oscillator is a momentum indicator that shows where the latest close sits within the high-low range of a lookback period, on a 0 to 100 scale.
Stochastic RSI
Stochastic RSI (StochRSI) is a momentum oscillator that applies the stochastic formula to RSI, showing where current RSI sits within its recent high-low range.
Supertrend
The Supertrend indicator is a trend-following overlay that plots an ATR-based line below price in an up state and above it in a down state, flipping on a closing cross.
Support and Resistance
Support and resistance are price zones where prior declines and advances slowed or reversed, used in technical analysis to set entries, stops and targets.
T
7 termsThree White Soldiers and Three Black Crows
Three white soldiers and three black crows are three-candle patterns of long bodies in one direction, the last two opening in the prior body, that can signal a reversal.
TICK and TRIN Indicators
TICK and TRIN are market internals: TICK nets upticking against downticking issues, and TRIN divides volume per declining issue by volume per advancing issue.
Trendline
A trendline is a straight line drawn through price pivots, such as rising swing lows or falling swing highs, that shows a trend’s direction and slope over time.
Triangle Pattern
A triangle pattern is a chart pattern formed by converging trendlines across the highs and lows, with symmetrical, ascending and descending variants.
TTM Squeeze
The TTM Squeeze is a volatility indicator that marks when Bollinger Bands sit inside Keltner Channels and pairs that squeeze state with a momentum histogram.
Types of Gaps
The four types of gaps are common, breakaway, runaway and exhaustion gaps, which classify a price gap by where it forms in a trading range or trend.
Types of Moving Averages
The types of moving averages, such as SMA, EMA, WMA, Wilder smoothing, VWMA and Hull, are weighting schemes that smooth price with different lag and responsiveness.
U
2 termsUlcer Index
The Ulcer Index is a downside risk measure equal to the root mean square of percentage drawdowns from a running high, capturing the depth and duration of declines.
Ultimate Oscillator
The Ultimate Oscillator is a momentum indicator by Larry Williams that blends buying pressure over 7, 14 and 28 periods into one weighted reading from 0 to 100.
V
4 termsValue Area (VAH and VAL)
The value area is the price band around a profile’s point of control that holds a chosen share of activity, commonly 70%, bounded by VAH above and VAL below.
Volume Profile
Volume profile is a charting study that shows how much trading volume occurred at each price during a session or lookback, organized by price rather than time.
Volume-Weighted Moving Average (VWMA)
A volume-weighted moving average (VWMA) is a rolling average that weights each bar’s price by its share of the total volume traded across the window.
Vortex Indicator
The Vortex Indicator is a trend indicator with two lines, VI+ and VI−, that compare upward and downward movement between adjacent bars, scaled by true range.
W
3 termsWedge Pattern (Rising and Falling)
A wedge pattern is a chart pattern with two converging trendlines that slope in the same direction, forming either a rising wedge or a falling wedge.
Williams %R
Williams %R is a momentum oscillator that shows where the latest close sits within the high-low range of a lookback period, on a scale from 0 to −100.
Wyckoff Method
The Wyckoff method is a technical analysis approach that reads accumulation and distribution ranges through price, volume and a sequence of phases and tests.