Technical Analysis

Welcome to the mysmp.com technical analysis trading center.  Put simply, technical analysis is the art of being able to analyze previous market trends to create future price projections.  As opposed to fundamental analysis which bases its projections on financial statements and corporate guidance, true technicians will ignore this information and use stock price and volume as their guide. 

Technical analysis is based on the theory that the market is a discounting mechanism which prices in the fundamentals before they are known to the general public.  Do you ever wonder why a stock will move higher into an earnings release, only to report great earnings and then fall on profit taking?  There is a saying which describes this phenomena, “buy on the rumor, sell on the news”.  The best time to buy is when nobody is interested and the best time to sell is when everyone wants a piece of the action.  The challenge with stock trading is to be able to spot this activity and trade with the big money, not against it.

Candlestick

• Abandoned Baby Candlestick
• Advance Block Candlestick
• Bearish Mat Hold Candlestick
• Bearish Separating Line - Candlestick Continuation Pattern
• Belt Hold Line - Candlestick Reversal Pattern
• Black Marubozu Candlestick
• Breakaway Pattern Candlestick
• Bullish Mat Hold Candlestick
• Bullish Separating Line Candlestick
• Candlestick Charts - Reversal Patterns
• Candlestick Charts Stars
• Closing Marubozu Candlestick
• Concealing Baby Swallow Candlestick Reversal Pattern
• Dark Cloud Cover Candlestick Pattern
• Deliberation Pattern - Candlestick Chart Formation
• Descending Hawk - Bearish Japanese Candlestick Reversal Pattern
• Descent Block - Candlestick Reversal Pattern
• Downside Tasuki Gap - Candlestick Continuation Pattern
• Dragonfly Doji - Bullish Candlestick Pattern
• Four Price Doji - Candlestick Pattern
• Gravestone Doji - Reversal Candlestick
• Harami - Candlestick Reversal Pattern
• Homing Pigeon - Bullish Candlestick Reversal Pattern
• Island Reversal - Candlestick Pattern
• Kicking Pattern - Candlestick Reversal Pattern
• Ladder Bottom - Bullish Candlestick Reversal Pattern
• Ladder Top - Bearish Candlestick Reversal Pattern
• Long-Legged Doji - Reversal Candlestick Pattern
• Matching High - Bearish Candlestick Reversal Pattern
• Matching Low - Bullish Candlestick Reversal Pattern
• Meeting Lines - Japenese Candlestick Reversal Pattern
• One Black Crow - Bearish Candlestick Reversal Pattern
• One White Soldier - Bullish Candlestick Reversal Pattern
• Opening Marubozu - Bullish Candlestick
• Paper Umbrella (Karakasa) - Candlestick Bar
• Piercing Line
• Rising and Falling Three Methods
• Squeeze Alert - Candlestick Reversal Pattern
• Stick Sandwich - Candlestick Reversal Pattern
• Three Black Crows & Three White Soldiers
• Three Inside Down - Bearish Reversal Candlestick Pattern
• Three Inside Up - Bullish Reversal Candlestick Pattern
• Three Outside Down - Bearish Reversal Candlestick Pattern
• Three Outside Up - Bullish Reversal Candlestick Pattern
• Three Stars in the North - Bearish Reversal Candlestick Pattern
• Three Stars in the South - Bullish Reversal Candlestick Pattern
• Tower Bottom - Bullish Reversal Candlestick Pattern
• Tower Top - Bearish Reversal Candlestick Pattern
• Tri Star - Reversal Candlestick Pattern
• Tweezer Bottom - Bullish Candlestick Formation
• Tweezer Top - Bearish Candlestick Formation
• Two Crows - Bearish Reversal Candlestick Pattern
• Two Rabbits - Bullish Reversal Candlestick Pattern
• Upside Tasuki Gap - Candlestick Continuation Pattern
• White Marubozu - Candlestick Bar

Chart Patterns

• Ascending Tops - Bullish Chart Formation
• Ascending Triangle Pattern
• Bear Trap - Chart Reversal Pattern
• Broadening Top - Reversal Chart Pattern
• Bull Trap - Chart Reversal Pattern
• Cup and Handle Formation
• Descending Triangle - Bearish Continuation Pattern
• Diamond Chart Formation
• Double Bottom - Reversal Chart Pattern
• Double Top - Reversal Chart Pattern
• Equivolume Definition & Chart Examples
• Flag - Continuation Chart Pattern
• Gap - Technical Analysis
• Kagi Charts - Technical Analysis Charting Method
• Pennant Chart Formation
• Renko Charts - Japanese Charting Method
• Swing High - Peak Price Movement
• Symmetrical Triangle Chart Pattern
• Triple Bottom - Chart Pattern
• Triple Top - Chart Pattern
• Wedge Chart Formation - Pause In Current Trend

Technical Indicators

• Absolute Breadth Index (ABI) - Momentum Indicator
• Advance Decline Ratio - Ratio of Advancing Issues to Declining Issues
• Advance/Decline Index - Market Breadth Indicator
• ADX
• Andrews Pitchfork - Three Parallel Trend Lines
• Arms Index (TRIN) Definition & Trading Strategy
• Aroon Indicator - Trend Following Tool
• Bollinger Bands
• Breadth Thrust Indicator Definition and Charting Example
• Bull Bear Ratio Definition and Formula
• Bullish Percent Index - Technical Analysis Indicator
• Chaikin Money Flow Indicator
• Chande Momentum Oscillator (CMO) - Technical Indicator
• Climactic Volume & How It Identifies Tops and Bottoms
• Commodity Channel Index (CCI) - Technical Analysis Indicator
• Commodity Selection Index (CSI) - Technical Analysis Indicator
• Displaced Moving Average (DMA) - Technical Analysis Indicator
• Exponential Moving Average (EMA) - Technical Indicator
• Fan Principle - Technical Indicator
• Fibonacci Arc - Technical Analysis Indicator
• Fibonacci Extensions - Price Projecting Technique
• Fibonacci Trading
• Lagging Technical and Economic Indicators
• Leading Technical and Economic Indicators
• MACD
• McClellan Oscillator - Market Breadth Indicator
• Money Flow Index - Momentum Indicator
• On Balance Volume (OBV) - Technical Indicator
• Parabolic SAR Indicator
• Positive Volume Index - Technical Indicator
• Price Rate of Change (ROC) - Technical Indicator
• Projection Oscillator - Technical Analysis Indicator
• Public Short Ratio - Market Sentiment Indicator
• Qstick - Technical Analysis Indicator
• Random Walk Index - Technical Analysis Indicator
• Rate of Change (ROC)
• Relative Volatility Index - (RVI)
• RSI
• Sentiment Indicators - Tools for Gauging Investor Beliefs
• Simple Moving Average
• Slow Stochastic Oscillator - Technical Analysis Indicator
• Swing Trading
• Technical Analysis and Market Sell Offs
• Tick Volume - Technical Analysis Indicator
• Upside Downside Volume Indicator
• Volume Analysis - Technical Indicator
• Volume Rate of Change - Technical Analysis Indicator

Above, you will find our technical analysis trading articles broken out into three categories; candlestick charts, chart patterns, and technical indicators.  It is important to understand that the foundation of technical analysis is based on the study of price, volume, and their relationship to each other.  Almost every indicator, pattern, or formation we discuss is a derivation of these two concepts.

Candlestick charts have quickly gained popularity over the last 10 years due to their ability to illustrate the emotional makeup of the investors in the market place.  They are created with four data points; the open, high, low, and close of the trading period.  Candlestick charts are now available on any reputable technical analysis charts package and being able to interpret the different formations that can occur can drastically help you understand where the market is heading.  Here, we discuss many of the popular reversal and continuation patterns, providing a very detailed explanation of each.  You can get started with the Candlestick Charts - Reversals article to get an overview of candlestick charts and some of the basic reversal patterns.

Over the past 100 years, a few key chart patterns have become the foundation of stock market technical analysis.  In our chart patterns section, we discuss many of these formations, describe the setup and even provide price targets. 

Finally, we have written a plethora of articles on technical analysis indicators.  As we suggested above, these indicators are derived from the price or volume activity in a stock and can help you confirm or deny your analysis.  Indicators can be used as part of a trading system but should never be used in a silo.  They are often useful in identifying divergences and extremes.  A seasoned trader will learn that there is no magic bullet; rather, money management and sticking to your rules will determine your level of success.

Many traders who attempt to learn the technical analysis of stock trends will inevitably fail and render this analysis technique worthless, casting it off as a form of gambling.  The truth of the matter is that, like anything worth having, technical analysis trading is a learned skill which requires a tremendous amount of patience, emotional strength, research, and strict adherence to your rules.  Trading stocks is one of the hardest professions that anyone can undertake, but it can reward you handsomely once you find your niche as a trader.