Charting terms and indicators

Many different techniques and indicators can be used to follow and predict trends in markets, and usually at least a few at a time are considered when making an investment decision. Some of the most widely known include:

• Accumulation/distribution index - based on the close within the day's range
• Average true range - averaged daily trading range
• Bollinger bands - a range of price volatility
• Breakout - when a price passes through and stays above an area of support or resistance
• Commodity Channel Index - identifies cyclical trends
• Hikkake Pattern - pattern for identifying reversals and continuations
• MACD - moving average convergence/divergence
• Momentum - the rate of price change
• Money Flow - the amount of stock traded on days the price went up
• Moving average - lags behind the price action,
• On balance volume - the momentum of buying and selling stocks
• PAC charts - two-dimensional method for charting volume by price level
• Parabolic SAR - Wilder's trailing stop based on prices tending to stay within a parabolic curve during a strong trend.
• Pivot point - derived by calculating the numerical average of a particular currency's or stock's high, low and closing prices.
• Relative Strength Index - oscillator showing price strength.
• Resistance - an area that brings on increased selling
• Stochastic oscillator, close position within recent trading range
• Support - an area that brings on increased buying
• Trend line - a sloping line of support or resistance

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