Charting or technical analysis is a popular method used by professional traders to evaluate how and when to trade into and out of the financial markets.
The key to successful investment in any market can rest as much in the timing of the decision to buy or sell, as in the selection of direction. Regardless of how you invest your money, you need to know when to buy or sell. Your timing is crucial for your return.
The intention of this charting library is to explain how to construct and analyse the most commonly used types of charts. Charting is as much an art as a science, with different interpretations of the same chart possible depending on who is doing the analysis. Your interpretation may depend on the type of trader you are and your intended time frame.
Topics covered range from identifying patterns and chart formations (including trendlines, pennants and flags) through to the more advanced topics of technical indicators where Bollinger Bands® and Gann charts are explained.
It is advised that investors new to charting techniques start at the top and make their way through the more complex techniques.
The discussion of each technique covers:
- The fundamentals behind the theory
- How to construct the chart
- Examples of the chart in use
Topics covered include patterns and chart formations from trendlines and support and resistance for overall direction. Timing indicators are also discussed from Bollinger Bands, relative strength indicators to candlestick charting.
Patterns and chart formations
- Trend channels
- Support and resistance
- Double tops and bottoms
- Head and shoulders
- Rounded tops and bottoms
- Accumulation and distribution
- Bollinger Bands
- Directional movement index
- Average directional index
- Exponential moving average
- Historical price volatility
- Moving average convergence Divergence MACD
- Moving average
- Relative strength
- Gann charts
- Candlestick charting
- Point and figure charts
The information contained in these webpages is for educational purposes only and does not constitute financial product advice. ASX does not represent or warrant that the information is complete or accurate. You should consider obtaining independent advice before making any financial decisions. To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of this material is accepted by ASX.
(C) The MacLean Group Pty Ltd ACN 096 967 038. All rights reserved 2003. This article has been prepared by The MacLean Group and licensed to ASX. The views are those of the author and not of ASX. This material is educational and it is not intended to constitute financial advice.