Identifying Chart Patterns with Technical Analysis
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TACTICAL INDICATOR -CUP and HANDLE PATTERN by Daryl Guppy in Recent Weeks We Have Seen Many New Readers Come on Board and They H
TACTICAL INDICATOR -CUP AND HANDLE PATTERN By Daryl Guppy In recent weeks we have seen many new readers come on board and they have generated a demand for background notes on the indicators we mention in the newsletter and the essential tools of technical analysis. These summaries are designed to explain how various indicators are applied to trading opportunities. The notes include tactics and rules for using and applying or constructing each indicator. The notes finish with a summary of the advantages and disadvantages of each indicator. These notes describe the way we use these indicators in our trading and are designed as a short reference guide. INDICATOR – CUP AND HANDLE PATTERN This is a short term pattern that develops over 2 to 4 weeks. It may be a downtrend breakout, or occur within an existing uptrend. The cup is usually symmetrical but it may be asymmetrical. Symmetrical saucer curves are defined using a single curve tool. Use the GTE saucer tool. Asymmetrical saucers are defined using a combination of parabolic curve segments. Use the GTE parabolic tool. APPLICATION The cup offers similar trading opportunities to that of the saucer pattern. The projection targets are based on a breakout from the lip of the cup. Generally the cup pattern is sharper and deeper than the saucer. The combination cup and handle pattern is a stronger pattern. This applies to the pattern of price behaviour following a failed breakout at the end of a cup pattern. Prices move to the right of the cup line, and then decline. This pullback may also appear within a few days after a successful breakout above the lip of the cup. -
Stock Market Explained
Stock Market Explained A Beginner's Guide to Investing and Trading in the Modern Stock Market © Ardi Aaziznia www.PeakCapitalTrading.com Copyrighted Material © Peak Capital Trading CHAPTER 1 Copyrighted Material © Peak Capital Trading Figure 1.1: “covid-19” and “stock market” keyword Google search trends between April 2019 and April 2020. As you can see, there is a clear correlation. As the stock market drop hit the news cycles, people started searching more and more about the stock market in Google! Copyrighted Material © Peak Capital Trading COVID-19 Bear Market 2019 Bull Market 2020 recession due to pandemic v Figure 1.2: Comparison between the bull market of 2019 and the bear market of 2020, as shown by the change in share value of 500 of the largest American companies. These companies are tracked by the S&P 500 and are traded in an exchange-traded fund known as the SPDR S&P 500 ETF Trust (ticker: SPY). For your information, S&P refers to Standard & Poor’s, one of the indices which used to track this information. Copyrighted Material © Peak Capital Trading Figure 1.3: How this book is organized. Chapters 1-4 and 7-11 are written by me. Chapters 5 and 6 on day trading are written by Andrew Aziz. Copyrighted Material © Peak Capital Trading CHAPTER 2 Copyrighted Material © Peak Capital Trading Figure 2.1: The return on investing $100 in an exchange-traded fund known as the SPDR S&P 500 ETF Trust (ticker: SPY) (which tracks the share value of 500 of the largest American companies (as rated by the S&P 500)) vs. -
Pattern Recognition User Guide.Book
Chart Pattern Recognition Module User Guide CPRM User Guide April 2011 Edition PF-09-01-05 Support Worldwide Technical Support and Product Information www.nirvanasystems.com Nirvana Systems Corporate Headquarters 7000 N. MoPac, Suite 425, Austin, Texas 78731 USA Tel: 512 345 2545 Fax: 512 345 4225 Sales Information For product information or to place an order, please contact 800 880 0338 or 512 345 2566. You may also fax 512 345 4225 or send email to [email protected]. Technical Support Information For assistance in installing or using Nirvana products, please contact 512 345 2592. You may also fax 512 345 4225 or send email to [email protected]. To comment on the documentation, send email to [email protected]. © 2011 Nirvana Systems Inc. All rights reserved. Important Information Copyright Under the copyright laws, this publication may not be reproduced or transmitted in any form, electronic or mechanical, including photocopying, recording, storing in an information retrieval system, or translating, in whole or in part, without the prior written consent of Nirvana Systems, Inc. Trademarks OmniTrader™, VisualTrader™, Adaptive Reasoning Model™, ARM™, ARM Knowledge Base™, Easy Data™, The Trading Game™, Focus List™, The Power to Trade with Confidence™, The Path to Trading Success™, The Trader’s Advantage™, Pattern Tutor ™, and Chart Pattern Recognition Module™ are trademarks of Nirvana Systems, Inc. Product and company names mentioned herein are trademarks or trade names of their respective companies. DISCLAIMER REGARDING USE OF NIRVANA SYSTEMS PRODUCTS Trading stocks, mutual funds, futures, and options involves high risk including possible loss of principal and other losses. Neither the software nor any demonstration of its operation should be construed as a recommendation or an offer to buy or sell securities or security derivative products of any kind. -
Want to Make Hot Money? Check out These 10 'Cup and Handle' Stocks
Rahul Oberoi | July 26, 2017 Want to make hot money? Check out these 10 ‘Cup and Handle’ stocks A cup without a handle is difficult to handle. Same is the case with stock markets. Technical charts show that a stock with 'Cup and Handle' pattern is easy to identify. As the name suggests, there are two parts of this pattern - one is U-shape cup and another one is small handle. A cup usually forms after an advance move, it looks like a 'Rounding Bottom'. After the high formed on a right-hand side (i.e. Cup), there is a pullback which ideally forms a 'Handle' that shows a final pullback before the big breakout. The said pullback should usually retrace around one-third of a cup. Monil Shah, Senior Technical Analyst, Way2Wealth Brokers said, "The lesser it retraced, the more bullish the formation is. After this formation, one can draw a trend line from the left side of the cup, connecting the right handle. We should see substantial increase in volume activity during the breakout above the handle's resistance. The projected target after the breakout can be estimated by measuring the depth of the cup. The distance from the right side of the cup to the bottom of the cup will be added to the handle resistance.” Volumes also play an important role in validating the price pattern. Pankaj Pandey, Head-Research, ICICI Direct said, "Volumes are typically light at the base of cup formation and generally increase as the stock moves back toward its old high. As the stock breaks out above resistance marked by the handle, volume typically increases. -
Course Content
Course Content Basic Forex Education (12 Topics) Lesson Content 12 Steps Why Trade Forex When to Trade Forex Trading Terminology Or Where Am I Going Long How To Trade With Leverage Whats a PIP How To Place a Trade in Forex Types of Forex Orders Technical Analysis in Forex Fundamental Analysis in Forex Types of Forex Charts Support and Resistance in Forex Trendlines Fibonacci (4 Topics) Lesson Content 4 Steps Fibonacci Forex Fibonacci Extensions Learn Forex Fibonacci Fan and Arcs Learn Forex Combining Fibonacci With Other Technical Analysis Tools Understanding Candlesticks (13 Topics) Lesson Content 13 Steps Candlesticks Doji Candlestick in Forex Marubazu Candlestick in Forex Hammer and Hanging Man Candlesticks Shooting Star and Inverted Hammer Candlestick Bullish Piercing Pattern Dark Cloud Cover Pattern Bullish and Bearish engulfing patterns Tweezer Tops and Bottoms Morning and Evening Star Patterns 3 White Soldiers 3 Black Crows 3 Inside Up 3 Inside Down Pattern Rising and Falling Three Methods Chart Formation Patterns (13 Topics) Lesson Content 13 Steps Forex Double Top and Double Bottom Formation Patterns Learn Forex Head and Shoulders Pattern Forex Inverse Head and Shoulders Pattern Forex Bull Flag Formation Patterns Forex Bear Flag Patterns Forex Bullish and Bearish Pennant Formation Forex Falling Wedge Pattern Forex Ascending and Descending Triangle Formations Forex Symmetrical Triangle Pattern Forex Box Range Forex Cup and Handle Formation Pattern Forex Inverse Cup and Handle Pattern Forex Rising Wedge Pattern Forex Indicators -
Does a Volatility Collapse = Market Collapse?
Quantitative & Strategy d Cam Hui, CFA [email protected] DOES A VOLATILITY COLLAPSE = MARKET COLLAPSE? April 22, 2019 Table of Contents EXECUTIVE SUMMARY In the past week, there has been a lot of hand wringing about the collapse in volatility across Worried About The all asset classes. Equity investors know that the VIX Index has fallen to a 12-handle, and Collapse In Volatility? ............................ 2 past episodes of low VIX readings have resolved themselves with market corrections. Some Volatility Can Be Ignored ............... 5 The MOVE Index, which measures bond market volatility, has also fallen to historic lows. Which Way The Greenback? .................. 8 Low volatility has also migrated to the foreign exchange (FX) market. Macro And Investment Implications ....... 12 We find that low equity and credit market volatility have not been actionable sell signals, but low FX volatility is a bit more worrisome. In the past, extremely low FX volatility has Timing The USD Rally ........................... 13 been followed by a large move in the USD, though the direction is unclear. Investors need to understand the potential of the move, work through the implications, and prepare accordingly. The market may be setting up for a major currency market move either later this year or early next year. Investors should be aware of such a development and be prepared for a return of market volatility. At this time, too many unknown variables exist to reliably forecast the direction of stock prices, but history shows that equity returns have not been significantly correlated with the USD. Nevertheless, a mean reversion in FX volatility may be the most important driver of asset returns over the next 12–24 months. -
© 2012, Bigtrends
1 © 2012, BigTrends Congratulations! You are now enhancing your quest to become a successful trader. The tools and tips you will find in this technical analysis primer will be useful to the novice and the pro alike. While there is a wealth of information about trading available, BigTrends.com has put together this concise, yet powerful, compilation of the most meaningful analytical tools. You’ll learn to create and interpret the same data that we use every day to make trading recommendations! This course is designed to be read in sequence, as each section builds upon knowledge you gained in the previous section. It’s also compact, with plenty of real life examples rather than a lot of theory. While some of these tools will be more useful than others, your goal is to find the ones that work best for you. Foreword Technical analysis. Those words have come to have much more meaning during the bear market of the early 2000’s. As investors have come to realize that strong fundamental data does not always equate to a strong stock performance, the role of alternative methods of investment selection has grown. Technical analysis is one of those methods. Once only a curiosity to most, technical analysis is now becoming the preferred method for many. But technical analysis tools are like fireworks – dangerous if used improperly. That’s why this book is such a valuable tool to those who read it and properly grasp the concepts. The following pages are an introduction to many of our favorite analytical tools, and we hope that you will learn the ‘why’ as well as the ‘what’ behind each of the indicators. -
Identifying Chart Patterns with Technical Analysis
746652745 A Fidelity Investments Webinar Series Identifying chart patterns with technical analysis BROKERAGE: TECHNICAL ANALYSIS BROKERAGE: TECHNICAL ANALYSIS Important Information Any screenshots, charts, or company trading symbols mentioned are provided for illustrative purposes only and should not be considered an offer to sell, a solicitation of an offer to buy, or a recommendation for the security. Investing involves risk, including risk of loss. Past performance is no guarantee of future results Stop loss orders do not guarantee the execution price you will receive and have additional risks that may be compounded in pe riods of market volatility. Stop loss orders could be triggered by price swings and could result in an execution well below your trigg er price. Trailing stop orders may have increased risks due to their reliance on trigger pricing, which may be compounded in periods of market volatility, as well as market data and other internal and external system factors. Trailing stop orders are held on a separat e, internal order file, place on a "not held" basis and only monitored between 9:30 AM and 4:00 PM Eastern. Technical analysis focuses on market action – specifically, volume and price. Technical analysis is only one approach to analyzing stocks. When considering which stocks to buy or sell, you should use the approach that you're most comfortable with. As with all your investments, you must make your own determination as to whether an investment in any particular security or securities is right for you based on your investment objectives, risk tolerance, and financial situation. Past performance is no guarantee of future results. -
Rising Wedge, Falling Wedge (PDF)
RISING WEDGE, FALLING WEDGE Rewarding patterns…provided you stay disciplined! Introduction The wedge is a very usual chartist pattern which is made of two converging trendlines that go in the same direction, both upwards or both downwards. As such, it can be immediately distinguished from a triangle. This pattern can be found on every timeframe, from the monthly charts to intraday price action. There are two sorts of wedges that have opposite consequences: Falling wedges, mostly completed following a sharp slump and which have a bullish implication, Rising wedges, which foreshadow a violent, downwards reversal phase. Their bearish bias is all the more pronounced since they are completed after a long period of time, and following a clear uptrend. But regarding most wedges as reversal patterns are just an opinion on our own. Many authors, however, consider that following the examples of triangles, pennants and flags, wedges are essentially continuation patterns, sloped against the trend. True, you can find falling wedges just in the middle of a bullish trend, or rising wedges within a bearish trend. A perfect example of continuation rising wedge made on the Japanese Topix index in 2007 is shown on the chart below. 1 Setting up precise figures on the continuation or reversal nature of wedges is hard and useless, we think. What is of more interest is that continuation wedges tend to complete in a generally shorter lapse of time than reversal wedges. Furthermore, the debate over the reversal/continuation nature of wedges is of minor importance as these patterns are overwhelmingly broken in the "natural" sense: downwards for a rising wedge, upwards for a falling wedge. -
Cup with Handle
9 Cup with Handle RESULTS SNAPSHOT Upward Breakouts Appearance Looks like a cup profile with the handle on the right. Reversal or continuation Short-term bullish continuation Bull Market Bear Market Performance rank 13 out of 23 9 out of 19 Break-even failure rate 5% 7% Average rise 34% 23% Change after trend ends –30% –34% Volume trend Downward Upward Throwbacks 58% 42% Percentage meeting price target 50% 27% Surprising findings Patterns that are tall, have short handles, and a higher left cup lip perform better. See also Bump-and-Run Reversal Bottom; Rounded Bottom This pattern sports a low failure rate but a below average rise when compared to other chart pattern types. The Results Snapshot shows the numbers. A few surprises are unique to this pattern. A cup with a short handle (shorter than the median length) tends to outperform those with longer handles. If the left cup 149 150 Cup with Handle lip is higher than the right, the postbreakout performance is also slightly bet- ter. The higher left lip is a change from the first edition of this Encyclopedia where cups with a higher right lip performed better. I believe the difference is from the change in methodology and a larger sample size. Tour The cup-with-handle formation was popularized by William J. O’Neil in his book, How to Make Money in Stocks (McGraw-Hill, 1988). He gives a couple of examples such as that shown in Figure 9.1. The stock climbed 295% in about 2 months (computed from the right cup lip to the ultimate high). -
Classic Patterns
CLASSIC PATTERNS TABLE OF CONTENTS Classic Patterns . Bullish Patterns: …………………………………………………………………………………………………………. 1 Ascending Continuation Triangle…………………………………………………………………….. 2 Bottom Triangle – Bottom Wedge…………………………………………………………………… 5 Continuation Diamond (Bullish) ……………………………………………………………………… 9 Continuation Wedge (Bullish) …………………………………………………………………………. 11 . Diamond Bottom…………………………………………………………………………………………….. 13 Double Bottom……………………………………………………………………………………………….. 15 Flag (Bullish) …………………………………………………………………………………………………… 19 . Head and Shoulders Bottom……………………………………………………………………………. 22 Megaphone Bottom………………………………………………………………………………………… 27 Pennant (Bullish) ……………………………………………………………………………………………. 28 Symmetrical Continuation Triangle (Bullish) …………………………………………………… 31 Triple Bottom………………………………………………………………………………………………….. 35 Upside Breakout……………………………………………………………………………………………… 39 Rounded Bottom…………………………………………………………………………………………….. 42 . Bearish Patterns…………………………………………………………………………………………………………. 45 Continuation Diamond (Bearish) …………………………………………………………………….. 46 Continuation Wedge (Bearish) ……………………………………………………………………….. 48 Descending Continuation Triangle…………………………………………………………………… 50 Diamond top…………………………………………………………………………………………………… 53 Double Top (Bearish) ……………………………………………………………………………………… 55 Downside Breakout…………………………………………………………………………………………. 60 Flag (Bearish) ………………………………………………………………………………………………….. 62 . Head and Shoulders top (Bearish) ………………………………………………………………….. 65 Megaphone Top……………………………………………………………………………………………… 71 Pennant -
The Most Popular Chart Patterns Why Chart Patterns Are So Important
JWBT760-c01 JWBT760-Cohen Printer: Courier Westford June 27, 2012 9:10 Trim: 6in × 9in CHAPTER 1 The Most Popular Chart Patterns Why Chart Patterns Are So Important In this chapter I am showing chart examples without the OVI indi- cator. This is deliberate. You’ll see some of the same charts with the OVI displayed in Chapter 2. he study of charts is known as technical analysis. This comes in two T forms: 1. Chart patterns—seen directly by looking at the charts. 2. Indicators—typically these are mathematical algorithms derived from price and volume. For the purpose of this book we’re going to focus on chart patterns, and as we progress through the chapter I’ll explain why. Principally it’s because they’re the purest interpretation of price action, and as traders we want our mainCOPYRIGHTED focus to be on price! MATERIAL Chart patterns are vitally important to traders, and frankly should be just as important to longer-term investors as well. Traditionally long-term investors focus more on the financial reports of a company. The prob- lem with that approach is that a share’s stock market performance is not correlated perfectly to the past quarter’s results. It’s also based on fu- ture estimates, the market’s view of management, and the quirks of the market itself. 15 JWBT760-c01 JWBT760-Cohen Printer: Courier Westford June 27, 2012 9:10 Trim: 6in × 9in 16 THE INSIDER EDGE Charts give us a visual representation of how the markets are inter- preting a company’s financial performance, its management capabilities, and its future prospects.