Glossary

Accumulation/Distribution Line

The Accumulation/Distribution Line (A/D Line) is a technical analysis indicator that measures the cumulative flow of money into and out of a security. It tries to show whether a security is being bought or sold by tracking both price and volume over time.

Average Directional Index (ADX)

The average directional index is a technical indicator that measures the strength of the ongoing trend, and it is applicable for all asset classes, stocks, forex, and commodities.

Average True Range (ATR)

ATR (Average True Range) is a technical indicator that measures how much a stock or asset moves on average during a set period, usually 14 days. It helps traders understand market volatility.

Bollinger Bands

Bollinger Bands are technical analysis indicators consisting of a middle band (a simple moving average) and two outer bands (standard deviations above and below the moving average). They measure price volatility and identify potential overbought or oversold conditions.

Candlestick Patterns

Candlestick patterns are formations created by one or more candlesticks that help traders understand market behaviour and predict possible price movements. These patterns are formed using the open, close, high, and low prices over a specific period.

Candlestick Timeframe

A candlestick timeframe refers to the duration or time interval that each individual candlestick on a chart represents. It defines how much market price action is displayed in each candle.

Candlesticks

Candlesticks are a type of chart used in trading that show the price movement of a stock or asset over a specific time period, such as 1 minute, 1 hour, or 1 day. Each candlestick displays the opening, closing, highest, and lowest prices, helping traders understand price action and market sentiment.

Chart Patterns

Chart patterns are visual formations created by the price movements of a stock (or any other asset) on a chart. Traders and technical analysts use these patterns to predict future price movements based on historical behaviour.

Dark Cloud Cover Pattern

The Dark Cloud Cover pattern is a bearish reversal candlestick pattern that typically appears at the top of an uptrend. It signals that the upward momentum might be slowing down and that a potential trend reversal to the downside could be coming.

Death Cross

A death cross is a chart pattern that shows the price of an asset is weakening. It happens when a short-term moving average crosses below a long-term moving average. This crossover signals that momentum has shifted, and traders who were previously optimistic may now have a bearish outlook.

Displaced Moving Average (DMA)

Displaced Moving Average (DMA) is a type of moving average that shifts a simple or exponential moving average (SMA or EMA) forward or backwards in time by a specified number of periods.

Doji Candlestick Pattern

A Doji candlestick pattern is a type of candlestick that represents market indecision. It forms when a security’s opening and closing prices are nearly equal, resulting in a candle with a very small or non-existent body and long or short wicks (shadows) on either side.

Donchian Channels

Donchian Channels are a trend-following technical indicator that plots the highest high and lowest low over a specified time period. They are typically used to identify price breakouts, volatility, and support/resistance levels.

Evening Star Pattern

The Evening Star is a bearish reversal candlestick pattern that typically appears at the top of an uptrend. It signals that the bullish momentum may be weakening, and a potential downtrend could begin.

Exponential Moving Average (EMA)

An exponential moving average is a technical indicator that gives weight to the recent and current closing prices, making it more responsive to price changes than the Simple Moving Average (SMA). It is used to identify bullish or bearish trends in the markets.

Fibonacci Retracement

Fibonacci retracement is a widely used technical analysis tool that traders use to identify potential support and resistance levels. Based on the famous Fibonacci sequence, this tool helps forecast the likely levels where a stock might reverse its trend.

Golden Cross Pattern

A Golden Cross is a bullish signal in technical analysis that occurs when a short-term moving average (like the 50-day) crosses above a long-term moving average (like the 200-day). It indicates a potential uptrend in the stock or market.

Gravestone Doji

A Gravestone Doji is a bearish reversal candlestick pattern used in technical analysis. It forms when the open, low, and close prices are nearly identical, with a long upper shadow and little to no lower shadow.

Hammer Candlestick Pattern

A Hammer is a single-candle bullish reversal pattern that forms after a downtrend. It has a small real body near the top of the candle and a long lower shadow, with little or no upper shadow.

Hanging Man Pattern

The hanging man is a single candlestick pattern that appears after an uptrend and signals a possible reversal of a prevailing uptrend.