Candlestick charts were first used by rice traders in Japanese futures markets in the 1700s. They were introduced to traders outside of Japan in 1991, when “Japanese Candlestick Charting Techniques” was published by Steve Nison. This charting technique immediately gained widespread acceptance among traders. Candlestick charts are available on many… Read More

The head-and-shoulders pattern is sometimes seen on price charts ahead of a downside reversal. It... Read More

The head-and-shoulders pattern is sometimes seen on price charts ahead of a downside reversal. It occurs after an uptrend and consists of three peaks in price, with the center peak being higher than... Read More

The Momentum of Comparative Strength (MoCS) indicator transforms relative strength (RS) into a momentum tool and helps traders identify changes in the trend of RS. This indicator was created by Christopher Hendrix, CMT, and introduced in an article in the November 2006 issue of SFO Magazine. MoCS replaces price with… Read More

Fibonacci ratios are widely used to develop price targets for retracements on countertrend moves. A... Read More

Fibonacci ratios are widely used to develop price targets for retracements on countertrend moves. A Fibonacci retracement will help spot support levels in an uptrend or resistance in a downtrend.... Read More

Retracements are price moves that are opposite to the primary trend. In a bull market, retracements are the short declines that interrupt the long-term trend of rising prices. Bear market retracements are short up moves.  While traders usually think of retracements in terms of price, the concept can also be… Read More

A number sequence known as the Fibonacci series was proposed as an answer to the question, “If we start with one pair of rabbits, how many pairs of rabbits will there be one year later if we assume that every month each pair reproduces and adds a new pair to… Read More

Average True Range (ATR) is an indicator used to measure volatility. IT was introduced to the trading community by J. Welles Wilder in his 1978 book, New Concepts in Technical Trading Systems.  Mathematically, the formula is similar to an exponential moving average and was relatively easy to calculate before computers… Read More

Charles Dow, the editor of The Wall Street Journal around the beginning of the 20th century,... Read More

Charles Dow, the editor of The Wall Street Journal around the beginning of the 20th century, provided a framework to study the stock market that would become known as the Dow Theory.  He had... Read More

Legendary investor Carl Icahn recently added a “sizable position” of Apple to his $16 billion holding company — Icahn Enterprises. Since he announced his purchase on Sept. 11, 2013, Apple is up about 20%. After making the purchase, Icahn was quoted saying it was a “no-brainer” investment, citing that the… Read More

Within a group of different stocks, mutual funds or any other possible investments, some will perform better than others. Relative strength (RS) recognizes those differences in performance and is a way to rank investments from the strongest (best performers) to the weakest (poor performers).  As the name implies, relative strength… Read More