Gap Definition.

Gap definition, in technical analysis, is the area between the high and the low price of a security over a period of time. A gap can be created by a number of events, such as an earnings announcement, a change in analyst coverage, or a change in the overall market sentiment. Gaps can be either … Read more

What Is a Broadening Formation?

A broadening formation is a price chart pattern characterized by a series of price peaks and troughs that get progressively wider over time. The pattern is considered a bullish indicator, as it shows that prices are trending higher despite periods of temporary weakness. The broadening formation is also sometimes referred to as a “megaphone” or … Read more

Down Volume Definition.

Down volume refers to the total number of shares traded during a given period that were sold at a price lower than the price at which they were previously traded. This is contrasted with up volume, which refers to the total number of shares traded during a given period that were sold at a price … Read more

Zig Zag Indicator Definition.

The Zig Zag Indicator is a technical analysis tool used to identify market trends. The indicator is designed to filter out small price movements and only show the larger price swings. The Zig Zag Indicator is based on a simple concept: price moves in waves. The Zig Zag Indicator is designed to identify these waves … Read more

What Is an Envelope in Technical Analysis?

An envelope is a technical analysis tool used to measure volatility and price movements. It is constructed by adding and subtracting a certain percentage from a moving average. Envelopes are used to identify trends and possible reversal points. The percentage used to construct an envelope is typically between 2% and 5%. The moving average can … Read more

Stick Sandwich Definition.

A stick sandwich is a candlestick charting pattern that is composed of three candlesticks. The first candlestick is a long bearish candlestick that closes near its low. The second candlestick is a short candlestick (either bullish or bearish) that opens and closes within the body of the first candlestick. The third candlestick is a long … Read more