Analyzing Chart Patterns
  1. Analyzing Chart Patterns: Introduction
  2. Analyzing Chart Patterns: Why Charts?
  3. Analyzing Chart Patterns: Head And Shoulders
  4. Analyzing Chart Patterns: Cup And Handle
  5. Analyzing Chart Patterns: Double Top And Double Bottom
  6. Analyzing Chart Patterns: Triangles
  7. Analyzing Chart Patterns: Flags And Pennants
  8. Analyzing Chart Patterns: The Wedge
  9. Analyzing Chart Patterns: Gaps
  10. Analyzing Chart Patterns: Triple Tops And Bottoms
  11. Analyzing Chart Patterns: Round Bottoms
  12. Analyzing Chart Patterns: Conclusion

Analyzing Chart Patterns: Introduction


By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com

Ever looked at the chart of a stock or commodity? Most likely, you have. Just about everyone who has ever analyzed a security takes a look at the price movements of the past month, quarter, year, etc.

For many analysts, the chart of a security is the starting point for all future analysis. Even staunch critics of technical analysis use charts to some extent. And for good reason: charts can provide a lot of information in a small amount of time.

Taking a look at the five-year chart of a company, you can quickly determine how well shareholders have done over the period. Based on the movements represented on the chart, one can tell if a company's share value has grown over the period or lagged.

The chart reader also can determine the volatility of the company's shares by looking at the movements on the chart. A company whose stock exhibits very jagged up-and-down movements is clearly more volatile than a company whose stock moves relatively smoothly across time.

But this is only the tip of the iceberg in terms of how charts are used by market participants. In this tutorial, we'll introduce you to some of the more advanced uses of charts.

Analyzing Chart Patterns: Why Charts?

  1. Analyzing Chart Patterns: Introduction
  2. Analyzing Chart Patterns: Why Charts?
  3. Analyzing Chart Patterns: Head And Shoulders
  4. Analyzing Chart Patterns: Cup And Handle
  5. Analyzing Chart Patterns: Double Top And Double Bottom
  6. Analyzing Chart Patterns: Triangles
  7. Analyzing Chart Patterns: Flags And Pennants
  8. Analyzing Chart Patterns: The Wedge
  9. Analyzing Chart Patterns: Gaps
  10. Analyzing Chart Patterns: Triple Tops And Bottoms
  11. Analyzing Chart Patterns: Round Bottoms
  12. Analyzing Chart Patterns: Conclusion
RELATED TERMS
  1. Golden Cross

    A crossover involving a security's short-term moving average ...
  2. Cup and Handle

    A pattern on bar charts resembling a cup with a handle. The cup ...
  3. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, ...
  4. Markdown

    The difference between the highest current bid price among dealers ...
  5. Catalyst

    A catalyst in equity markets is a revelation or event that propels ...
  6. Confirmation

    The use of an additional indicator or indicators to substantiate ...
RELATED FAQS
  1. How do I build a profitable strategy when spotting a Rounding Bottom pattern?

    For investors looking to ride a new trend to profits, accurately identifying a reversal is the holy grail of chart analysis. ... Read Full Answer >>
  2. What is the difference between a Hanging Man and a Hammer Pattern?

    The hanging man and the hammer are both candlestick patterns that indicate trend reversal. The only difference between the ... Read Full Answer >>
  3. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  4. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  5. What is the 'Rule of 72'?

    The 'Rule of 72' is a simplified way to determine how long an investment will take to double, given a fixed annual rate of ... Read Full Answer >>
  6. What is a stock split? Why do stocks split?

    All publicly-traded companies have a set number of shares that are outstanding on the stock market. A stock split is a decision ... Read Full Answer >>
Hot Definitions
  1. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  2. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  3. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  4. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  5. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center