Chart Formation

Dictionary Says

Definition of 'Chart Formation'

A graphical depiction of a stock's price movements over time. Technical analysts use chart formations to identify trends in a stock's price and to help them decide whether and when to buy and sell - that is, to determine entry and exit points. Technical analysts also use chart formations to decide where to place initial and trailing stops.
Investopedia Says

Investopedia explains 'Chart Formation'

Types of chart formations include the head and shoulders pattern, which is used to identify trend reversals; the inverse saucer or rounded top, which indicates a peak in a stock's price; the triangle, which indicates the reversal or continuation of a trend and the double-bottom formation, which investors use to identify potential upside targets.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Candlestick

    A chart that ...
  2. Weekly Chart

    A chart where ...
  3. Daily Chart

    A line graph ...
  4. OHLC Chart

    Short for "Open, ...
  5. Moving Average Chart

    A tool used by ...
  6. Risk

    The chance that ...
  7. Universe Of Securities

    A set of ...
  8. Arithmetic Mean

    A mathematical ...
  9. Fundamental Analysis

    A method of ...
  10. Moving Average - MA

    An indicator ...

Articles Of Interest

  1. Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  2. How To Trade The Head And Shoulders Pattern

    The head-and-shoulders chart pattern is a popular and easy-to-spot pattern - once a trader is aware of what they are watching for.
  3. Introduction To Technical Analysis Price Patterns

    To "find your game" in technical analysis, you need to be able to recognize reversals and continuations as they form.
  4. MACD Histogram Helps Determine Trend Changes

    Learn how this momentum indicator is used to determine price action on a stock.
  5. Support & Resistance Basics

    Understanding this key concept can drastically improve your short-term investing strategy.
  6. Charting Your Way To Better Returns

    Learn about the powerful hybrid techniques that take advantage of both technical and fundamental analysis.
  7. Tips For Controlling Investment Losses

    A profit/loss plan helps investors recognize mistakes and invest logically, rather than emotionally.
  8. Triple Screen Trading System - Part 4

    How can a trader use the Elder-Ray oscillator as the second screen of this system? Find out here.
  9. Triple Screen Trading System - Part 3

    Learn about market wave, the second screen in this three-part system.
  10. Triple Screen Trading System - Part 2

    Market tide is the basis for making trading decisions in this three-part system.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center