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Showing results for tags 'active trading'.
Found 290 results
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When the open interest (which equates to trading volume) in an asset is at opposing ends to the price movements, the market is described as technically weak.
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One of the tools used by traders who engage in technical analysis is the open interest in an asset. The degree of open interest (which equates to trading volume) can then be used to determine if there is increased demand/reduced demand on an asset, which will create a situation of price increases/decreases respectively according to the laws of demand and supply.
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A technical rally is seen when traders decide to buy an asset based on technical setups on their charts. Some examples of such technical setups will include buying at a support level, or buying as a result of a bullish reversal or a bullish chart pattern forming on the charts.
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Technical indicators can be default or customized. They are built to draw analogies from previous setups on the chart so that the trader can use them to derive trade signals for the present and future. Examples of technical indicators include the MACD, Stochastics, Average Directional Index, Parabolic SAR, etc.
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A technical decline is seen when traders decide to sell an asset based on bearish patterns that have formed on the chart. Examples include selling when a bearish reversal candlestick pattern appears, or selling at a resistance.
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Technical analysis involves the use of chart patterns, candlestick patterns, technical indicators and other chart information to make decisions on how to trade the market, and a trader who uses this method is a technical analyst. Technical analysts base their decisions on the theory that price action occurs in cycles and that a particular pattern of price action which produced a certain result several times in the past is likely to behave in the same way in the present time.
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The swing low is used to plot the Fibonacci retracement tool, which is plotted from swing high to low in a downtrend with upward retracement and from swing low to high in an uptrend with downward retracement.
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A swing high can also be defined as an area where prices have formed a peak that is higher than other peaks in a price wave. A swing high is used in plotting the Fibonacci retracement tool on the chart, which is plotted from swing high to low in a downtrend with upward retracement and from swing low to high in an uptrend with downward retracement.
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The swing is capitalized on by swing traders, who aim to capture the sudden, dramatic changes in the price of an asset by getting into, and holding those positions for a maximum of a few days. Trading price swings is a form of market speculation.
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The sushi roll is a reversal candlestick pattern without market bias; in an uptrend, it is a bearish reversal pattern and in a downtrend, it is a bullish reversal pattern.
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A support could be formed by the support pivot points (S1, S2, S3), the central pivot in a downtrend from R1, or from a price that ends in 00s when the market is in a downtrend (psychological support). A support can also be formed when a resistance area has been broken successfully. Traders tend to go long on an asset at support levels.
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Pivot points are calculated and therefore cannot be called structural pivots. Rather a region on the charts where the price action of the candlestick form areas of support and resistance on which prices can reverse would constitute structural pivots.
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All markets and assets in a market undergo the events described in the stock cycle, and traders can use this information to acquire assets in the early uptrend. When the markup in prices start to taper off, asset distribution/selling occurs as profit taking takes over, followed by a period when there is a net surplus of assets than there are buyers, leading to a price markdown.
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The StochRSI has values that range between 0.0 and 1.0, and values below 0.2 are considered as oversold (a possible buy area) while values above 0.8 are considered as overbought values which would prompt the trader to prepare a short position.
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Traders can use the oversold/overbought signal given by the Stochastics oscillator to trade trend reversals especially in a range-bound market. The Stochastics oscillator can also be used to trade divergences.
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The star formation is seen in the morning and evening Doji star candlestick formations which are essentially reversal candlestick patterns.
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In a square position, the trader is not in a net long or net short position as the value of the short positions cancels out the value of the long positions.
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The spinning top can serve as a reversal or continuation pattern. As a reversal signal, it can serve as a bullish reversal signal if it is preceded by a long, black candlestick or as a bearish reversal if it is preceded by a long white candlestick. It is not a very reliable candlestick pattern and must be combined with other parameters for confirmation.
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The specialist short sale ratio is an important consideration when making decisions about whether to short an asset or the market in general. Actions by market specialists are considered important because of their wide market knowledge, so when many market specialists are engaged in short selling, it triggers a bearish sentiment. So a high specialist short sale ratio is seen as a bearish signal while a low specialist short sale ratio is seen as a bullish signal.
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For instance, if a company pays out more dividends in a particular year than in the previous two years combined, this is a strong signal that the projected earnings of the company in the coming year will be much stronger than it has been and savvy investors will take position early so as to benefit from the expected share price increase when these expected earnings eventually meet expectations.
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In terms of trade alerts, when the indicator line crosses the signal line to the upside, this is a buy signal. When the indicator crosses below the signal line from the upside, this is an indication to sell the asset. Signal lines are found in indicators like the MACD and the Stochastics oscillator.
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Sideways trends occur when traders are waiting on the market to provide an impetus to buy or sell the asset, forcing it into an upward or downward trend respectively. Sideways trends can be traded by range traders who sell the highs and buy the lows.
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The presence of a shooting star in an uptrend is an indication that the market will soon reverse to the downside, but the shooting star requires a confirmation in the form of bearish candle following it or some other form of technical confirmation to be used as a bearish trade signal.
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Examples of sentiment indicators are the NYSE bullish percentage, the CBOE Volatility Index and the NYSE 50-day moving average.
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Along with the Senkou Span A, the Senkou Span B is used to trade trend reversals. When the Senkou Span B is found below the Senkou Span A, the trend is said to be upward and when the Senkou Span B crosses over the Senkou Span A, the trend reverses to a downward trend.
