Technical Analysis

• Trading ChartBeginner10 min read

  A trading chart is a picture of an asset's price history, with time running from left to right and price from bottom to top.

• CandlestickBeginner7 min read

  A candlestick is a chart symbol that shows an asset’s open, high, low and close prices for one period of time.

• TrendBeginner6 min read

  A trend is the general direction of a price over time: up when highs and lows keep rising, down when they keep falling.

• VolumeBeginner6 min read

  Volume is the number of shares, contracts or coins traded during a given period.

• TimeframeBeginner7 min read

  The timeframe is the period of time each bar or candle on a chart represents, such as one minute, one hour or one day.

• Technical AnalysisBeginner4 min read

  Technical analysis is the study of past prices and volume, usually on charts, to judge market behaviour and plan trades — as opposed to analysing a business or economy.

• DojiIntermediate4 min read

  A doji is a candle whose open and close are almost equal, leaving a very small body; it shows that neither buyers nor sellers won the period.

• Engulfing PatternIntermediate4 min read

  An engulfing pattern is a two-candle pattern where the second candle's body completely covers the first candle's body in the opposite direction — bullish after a fall, bearish after a rise.

• HammerIntermediate3 min read

  A hammer is a candle with a small body near the top and a long lower wick, appearing after a decline: sellers pushed the price down but buyers drove it back up.

• Heikin-AshiIntermediate3 min read

  Heikin-Ashi is a chart type whose candles are calculated from averages of current and previous prices to smooth out noise; its prices are not actual traded prices.

• Linear and Logarithmic ScaleIntermediate3 min read

  On a linear price scale equal distances mean equal amounts of money; on a logarithmic scale equal distances mean equal percentage changes, which suits long histories.

• Open, High, Low, CloseBeginner3 min read

  OHLC are the four prices recorded for each period on a chart: the first traded price (open), the highest (high), the lowest (low) and the last (close).

• OHLC Bar ChartBeginner3 min read

  An OHLC bar chart draws each period as a vertical line from low to high, with a tick on the left for the open and on the right for the close.

• Bullish and Bearish CandlesBeginner3 min read

  A bullish candle closes above its open and a bearish candle closes below it; colours vary by platform, so always check the chart's settings.

• Candle Body and WickBeginner3 min read

  A candle's body is the thick part between its open and close; its wicks (or shadows) are the thin lines that reach the high and the low.

• Hanging ManIntermediate3 min read

  A hanging man looks like a hammer — small body, long lower wick — but appears after a rise, where it can warn that buying pressure is weakening.

• Inside and Outside BarsIntermediate3 min read

  An inside bar's whole range sits within the previous candle's range, showing contraction; an outside bar's range covers the previous candle entirely, showing expansion.

• Inverted HammerIntermediate3 min read

  An inverted hammer has a small body near the bottom and a long upper wick, appearing after a decline as a possible early sign that buyers are testing higher prices.

• Line ChartBeginner2 min read

  A line chart connects one price per period — usually the close — into a single line, which makes the overall direction easy to see.

• MarubozuIntermediate3 min read

  A marubozu is a candle with little or no wick, meaning it opened at one extreme and closed at the other — one side controlled the whole period.

• Morning Star and Evening StarIntermediate3 min read

  Morning and evening stars are three-candle reversal patterns: a large candle, a small indecisive one, then a large candle in the opposite direction.

• Shooting StarIntermediate3 min read

  A shooting star is a candle with a small body near the bottom and a long upper wick after a rise, showing that buyers pushed higher but sellers forced the price back down.

• Three White Soldiers and Three Black CrowsIntermediate3 min read

  Three white soldiers are three consecutive strong bullish candles, each closing higher; three black crows are the bearish mirror image.

• Elliott Wave TheoryAdvanced5 min read

  Elliott Wave theory, developed by Ralph Nelson Elliott in the 1930s, holds that markets move in repeating patterns: five waves in the direction of the trend, then three corrective waves against it. Wave counts are subjective, and two analysts often disagree.

• Dow TheoryIntermediate4 min read

  Dow Theory is a classic framework for reading market trends, built from Charles Dow's work. It says the market moves in primary, secondary and minor trends, that prices reflect all known information, and that a trend is confirmed when the industrial and transport averages agree.

Each term is defined in one sentence. Terms marked “Article in preparation” will get a full step-by-step article.

• AB=CD Pattern

  IntermediateArticle in preparation

  The AB=CD pattern is a simple harmonic structure in which the CD leg matches the AB leg in length, and often in time. C typically retraces 61.8–78.6% of AB, and D is where the move is expected to stall or reverse.

• Bat Pattern

  AdvancedArticle in preparation

  The Bat is a harmonic pattern defined by Scott Carney in which B retraces 38.2–50% of XA and D completes at the 88.6% retracement of XA. Its deep D point lets traders keep stops tight just beyond X.

• Butterfly Pattern

  AdvancedArticle in preparation

  The Butterfly is a harmonic pattern in which B retraces about 78.6% of XA and D extends beyond X, to roughly 127–161.8% of XA. Because D makes a new extreme, it is used to spot reversals at fresh highs or lows.

• Crab Pattern

  AdvancedArticle in preparation

  The Crab is a harmonic pattern with an extreme D point at the 161.8% extension of XA, with B retracing 38.2–61.8% of XA. The Deep Crab variant has B near 88.6%. Its far-reaching D makes it one of the most precise but least frequent patterns.

• Cypher Pattern

  AdvancedGlossary

  The Cypher is a harmonic pattern in which C extends beyond A, to about 127–141.4% of XA, and D completes at the 78.6% retracement of the whole X-to-C move. It is popular with forex traders but is not part of the original harmonic set.

• Fibonacci Arcs

  AdvancedGlossary

  Fibonacci arcs are curves centred on the end of a move, drawn at the 38.2%, 50% and 61.8% distances of that move. They combine price and time, but their shape depends on the chart's scale, so they look different on different screens.

• Fibonacci Channel

  AdvancedGlossary

  A Fibonacci channel draws a trend channel and then adds parallel lines at Fibonacci multiples of its width, such as 0.618, 1.618 and 2.618. Traders use the lines as possible targets when price leaves the original channel.

• Fibonacci Fan

  AdvancedGlossary

  A Fibonacci fan draws three lines from the start of a move through the 38.2%, 50% and 61.8% retracement levels of that move, measured at its end. The sloping lines act as possible support or resistance that changes over time.

• Fibonacci Time Zones

  AdvancedGlossary

  Fibonacci time zones are vertical lines spaced at Fibonacci intervals (1, 2, 3, 5, 8, 13, 21… bars) from a major high or low. They mark periods when a turn might come, but say nothing about price or direction.

• Gann Fan

  AdvancedGlossary

  A Gann fan, from the trader W. D. Gann, draws lines at set angles from a major high or low, such as the 1×1 line (one unit of price per unit of time). The angles depend on the chart's scale, which makes the method hard to apply consistently.

• Gartley Pattern

  AdvancedArticle in preparation

  The Gartley is the original harmonic pattern, named after H. M. Gartley. In its usual form, B retraces about 61.8% of the XA leg and the pattern completes at D, near the 78.6% retracement of XA, where a reversal is expected.

• Harmonic Patterns

  AdvancedArticle in preparation

  Harmonic patterns, such as the Gartley, Bat, Butterfly and Crab, are price structures of five points (X, A, B, C, D) whose swings fit specific Fibonacci ratios. Traders use them to mark zones where a reversal may start, which still need confirmation.

• Hollow Candles

  IntermediateGlossary

  Hollow candles combine two signals in one candle: the fill shows whether the close was above the open (hollow) or below it (filled), and the colour shows whether the close was above or below the previous close. That gives four candle types instead of two.

• Kagi Chart

  AdvancedGlossary

  A Kagi chart draws one continuous line that changes direction only when price reverses by a set amount, ignoring time. The line turns thick when price breaks above a previous high and thin when it breaks below a previous low, which marks shifts in supply and demand.

• Point and Figure Chart

  AdvancedGlossary

  A point and figure chart plots rising prices as columns of Xs and falling prices as columns of Os, ignoring time. A new column starts only when price reverses by a set number of boxes, often three, so only meaningful moves show.

• Potential Reversal ZonePRZ

  AdvancedArticle in preparation

  The potential reversal zone is the price area where several Fibonacci measurements from a harmonic pattern's legs cluster, marking where point D should complete. The tighter the cluster, the more significant the zone, but price must still confirm the turn.

• Range Bars

  IntermediateGlossary

  Range bars give every bar the same high-to-low size, ignoring time: a new bar starts only when price has moved the full range. Quiet periods produce few bars and fast markets many, which makes trends and breakouts easier to see.

• Renko Chart

  IntermediateArticle in preparation

  A Renko chart is built from bricks of a fixed price size and ignores time: a new brick appears only when price moves a full brick beyond the last one. This filters out small moves and makes trends easier to see, at the cost of lag.

• Shark Pattern

  AdvancedGlossary

  The Shark is a newer harmonic pattern introduced by Scott Carney. Point C overshoots X, at about 113–161.8% of the XA leg, and the pattern completes near an 88.6–113% retracement of the move into C. It is often treated as an early stage of another pattern.

• Three Drives Pattern

  AdvancedGlossary

  The three drives pattern is three successive pushes in the same direction, each separated by a pullback, with the drives and pullbacks in Fibonacci proportion (often 127.2% or 161.8% extensions). The third drive is expected to exhaust the move.

• Three Line Break Chart

  AdvancedGlossary

  A three line break chart adds a new line only when the close goes beyond the previous line, and reverses direction only when price breaks the extreme of the last three lines. Like Renko, it ignores time and filters out small moves.

• Wolfe Wave

  AdvancedGlossary

  A Wolfe Wave is a five-wave pattern of converging trendlines, popularised by Bill Wolfe, that traders read as a sign of an imbalance about to correct. The target comes from a line drawn through points 1 and 4.