An Overview Of Chart Types Used In Technical Analysis

Charts are graphical presentations of price information of securities over time. Charts plot historical data based on a combination of price, volume as well as time intervals. The use of charts is so prevalent, that technical analyst is often referred to as chartists. Originally, charts were drawn manually, but a majority of charts nowadays are drawn by computer.

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Investar Drawing Tools

Technical drawing tools play an important role in analyzing charts and are an important part of any Technical Analyst’s tool set. Drawing tools help you in your technical analysis, market timing, locating support and resistance levels in recognizing price patterns, confirming trends and much more. With Investar drawing tools, you may draw Trend Lines, Fibonacci Retracement, Fibonacci Fan, Andrew’s Pitchfork, Gann Fans, and other vital studies.

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Using Support/Resistance Zones

Support/Resistance breakouts are used by traders as buy/sell signals. However, often times a stock breaking out of a resistance or support line can lead to false breakouts. One situation this can occur is if too many resistance or support lines are very close together. When this happens, it is best to club nearby lines and treat them as a support or resistance zone rather than trade them separately.

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Using Pivot Levels for intraday trading.

Pivot Points are theoretical support and resistance levels based on the previous day’s open, high, low and close values: PP,R1,R2,R3,S1,S2,S3. PP is the Pivot Point, R1,R2,R3 are resistance levels, and S1,S2 and S3 are support levels. They are only valid as support and resistance levels for intraday trading. Pivot Levels can be calculated based on Classic, Camarilla or Woodie based formulae. Continue reading

How to use Open Interest in Future/Option trading

Open Interest is the third most important indicator after price and volume. It is defined as is the number of contracts outstanding at the end of a day. Open Interest is very important for any Future and Option Trader. Continue reading