The Bearish Engulfing Pattern is a candlestick chart pattern that signals a potential reversal from an uptrend to a downtrend. The pattern is made up of two candlesticks, with the second candlestick “engulfing” the first candlestick. The first candlestick is typically a small, bullish candlestick, while the second candlestick is a large, bearish candlestick. The … Read more
An impulse wave is a sharp, strong move in the markets that is typically followed by a period of consolidation or correction. These waves are often the first stage of a larger trend and can be used by traders to enter positions in the direction of the overall trend. How many patterns are in Elliott … Read more
A spinning top is a candlestick pattern with a small real body that is centered between an upper and lower shadow. The shadows should be of nearly equal length, and the real body should be small in comparison to the overall candlestick. The pattern can be bullish or bearish, depending on the candlestick’s direction. A … Read more
The Money Flow Index (MFI) is a technical indicator that uses price and volume data to measure buying and selling pressure. The MFI is also known as the volume-weighted RSI. The MFI is calculated using a similar formula to the Relative Strength Index (RSI), but it also takes into account the volume of each period. … Read more
Double Top: Definition, Patterns, and Use in Trading This title covers the basics of what a double top is, including its definition and some common patterns. It also covers how this technical analysis tool can be used in trading. Can a double top be bullish? A double top is a bearish reversal pattern that is … Read more
A fakeout is a move in the market that “fakes out” investors by lured them into a position only to see the market move in the opposite direction. Fakeouts can occur at any time frame but are most commonly seen on the intraday charts. The key to avoiding fakeouts is to not act on emotion … Read more
How to Use Exponential Moving Average With Formula. An exponential moving average (EMA) is a type of moving average that places a greater weight on recent prices to make it more responsive to new information. The exponential moving average is also referred to as the exponentially weighted moving average. The formula for an EMA is: … Read more
A moving average ribbon is a type of technical indicator that is used to smooth out price action and help traders identify trends. The ribbon is created by plotting a series of moving averages of different lengths on a price chart. The most common lengths used are 20, 50, and 200. The moving average ribbon … Read more
. Bollinger Bands: How to Calculate and What They Indicate How do you calculate Bollinger Bands? Bollinger Bands® are a technical analysis tool comprised of a simple moving average (SMA) and two upper and lower bands. The upper and lower bands are typically 2 standard deviations (SD) above and below the SMA, respectively. Bollinger Bands … Read more
A head-fake trade is a technical analysis term used to describe a false signal that tricks traders into taking a position in the market. Head-fake trades are often the result of false breakouts, which occur when the price of an asset moves outside of a defined support or resistance level, only to quickly reverse course … Read more
