Trading - Fundamentals of Technical Analysis

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Type of Charts – Constructing and Intrepreting Charts

Patterns can be seen in all Chart styles

  • Line charts contain the less amount of information but just as useful as other styles.
  • Bar charts represent each time period as a bar and add information about the size of the range (high-low) which depicts the a measure of volatility.
  • Candlesticks add a level of detail absent from bar charts by coloring the candle to show whether the close was up or down relative to the open.
  • Point and figure charts ignore time and show only price actions, focusing on the trends.

RSI Relative Strength Index – Most Popular Indicator of Bloomberg

% of Charts Using Purpose
RSI 44 Reversal
MACD 22 Strength of Trend
Bollinger Bands 12 Strength of Trend
Stochastics 9 Reversal
DMI 5 Direction of Trend
Volume at Time 3 Liquity


Bollinger Bands

  • Bands drawn 2 standard deviations above and below a 20-period moving average.
  • A measure of volatility where volatility as bands narrow and expands as bands widen.
  • In theory, two standard deviations should contain 95% of the data points.
  • In practice, the bands contains about 90% of the price action. This is useful to know since it tells us the break is unusual and relatively rare.

About The Course

The New York Institute of Finance’s Trading – Fundamentals of Technical Analysis teaches students how to apply technical analysis as a standalone trading methodology or as a supplement to fundamental analysis using tools that have been quantitatively tested – global scope with applications to equities, fixed income, commodities, and foreign exchange markets.

About NYIF

The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in class, in over 120 countries.

See all of NYIF’s training and qualifications here.

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