Types of chart and Indicators
*Candlestick charts are used for making decisions in trading. In these patterns it gives clear view of movement like open-
*If closing price of the candle is higher than opening price it shows in Green or Blue colour, its “Bullish Candle”.
*If opening price of the candle was higher than closing price it shows in Red colour, it’s “Bearish Candle”.
How Technical charts does are helpful to trader???
*In stock market prices are fluctuating every second, it is not possible to remember every movement. Technical chart plots every second movement in particular time frame candle with high, low, open and closing price so it’s easy to predict the future movement. Technical indicator helps to...
1 Understand support and resistance levels.
2 Check back history of shares.
3 Understand up trends or downtrends.
4 Most important it helps to take right decision of buying or selling with target and stop loss.
Support and Resistance Level
*Support and resistance level is highly important indicator for day trading strategy. These technical indicators are issential for market trend.
*Support level is the price level where market sustains and the price doesn’t go down. This means the price is more likely to "bounce" up from this level rather than break through it. However, once the price has crossed this level, by an amount exceeding some noise, it is likely to continue dropping until it finds second support level.
*Resistance level is the opposite of a support level. It is the price level where market sustains and the price doesn’t go up. This means the price is more likely to "bounce" down from this level rather than break through it. However, once the price has crossed this level, by an amount exceeding some noise,
Moving average is one of the indicators used in auto buy sell signal technical analysis chart software. Moving average is created by computing the average price of a share or commodity over a specific number of periods. E.g.:-
Simple moving average (SMA)
Cumulative moving average (CMA)
Weighted moving average (WMA)
Exponential moving average (EMA)it is likely that it will continue rising until it finds second resistance level.
MACD (Moving Average convergence / Divergence)
*MACD is trading indicator used in technical analysis of Commodity market, stock market, and currency market. MACD indicator depends on three time frames of EMA. Most commonly used averages are 12 days Fast average, 26 days slow average and 9 days Signal average.
RSI (Relative Strength Index)
*RSI shows the current and historical strength and weakness of particular stock on closing price. This technical indicator clear’s the vision with relative strength. RSI is mostly used on 14 days’ timeframe if it’s below 30 values it is considered as oversold, if it’s above 70 values it is considered as overbought.
*Moving average is one of the indicators used in auto buy sell signal technical analysis chart software. Moving average is created by computing the average price of a share or commodity over a specific number of periods. E.g.:-
1 Simple moving average (SMA)
2 Cumulative moving average (CMA)
3 Weighted moving average (WMA)
4 Exponential moving average (EMA)
*Indian stock market direction will be clear due to the pivot point indicator. Pivot point is calculated as an average of significant prices (high, low, and close) from the performance of a market in the prior trading period. If the market trades above the pivot point it is usually bullish trend, when trading below the pivot point its bearish trend. For many years, traders and market makers have used pivot points to determine critical support and resistance levels. Pivot point calculation
Pivot Point= (High+ Low + Close) / 3
*William’s%R is mostly used on 14 days trading period if its below -
High in number of days – Today’s close
William’s%R = -
High in number of days – today’s Low
*A chart overlay that shows the upper and lower limits of 'normal' price movements based on the Standard Deviation of prices
On Balance Volume (OBV)
*Combines price and volume in a very simple way to show how money may be flowing into or out of a stock