In short: SMI is an index of orders in the last half hour compared to the first half hour. The Smart Money Index, or Smart Money Flow Index, was popularized by Don Hayes in the 1990s and seeks to understand what the “smart money” is doing relative to the “dumb…
In short: Technical Analysis is trying to predict the direction of prices through the study of market data via graphics. Primarly price and volume. Behavioral economics and quantitative analysis use many of the same tools of technical analysis, which, being an aspect of active management, stands in contradiction to much of modern portfolio theory. The efficacy…
In short: Trendlines are used in TA to quickly point out the general direction of a stockprice by connecting the highs and the lows. Unlike horizontal support and resistance, trendlines are diagonal or slanted areas of value. Trendlines do behave like support and resistance in that price action can be confined…
In short: “The IPSOS Global Consumer Confidence Index measures the consumer spending and future outlook over a certain category and time”. The consumer confidence index started in 1967 and is benchmarked to 1985 = 100. This year was chosen because it was neither a peak nor a trough. The index…
Gone are the dealers on NASDAQ and the specialists at the NYSE. Instead, a company’s stock can now be traded on up to sixty competing venues where a computer matches incoming orders. A majority of quotes are now posted by high-frequency traders (HFTs), making them the dominant source of liquidity in the market.
In short: A Bar chart consist of symbols (Bars) where the opening and closing price is given as a line to the left and right of the bar. The color green or red shows the movement up or down. What is a bar chart? Bar charts are one of the…
The world’s first shares date back to Ancient Rome Although it was in northern Europe at the beginning of the 17th Century that joint ownership of companies first became popular. The world’s first joint stock company, the Dutch East India Company, was formed in 1602 by the merger of several small Dutch…
In short: Technical traders use indicators to identify market patterns and trends. Most of these indicators fall into two categories: leading and lagging. Leading tries to predict the future, Lagging shows exactly what has been. What is a leading technical indicator? A leading indicator is a tool designed to anticipate…
In short: Support and resistance trendlines are horizontally drawn lines to indicate where the price might end or gain strength. In stock market technical analysis, support and resistance are certain predetermined levels of the price of a security at which it is thought that the price will tend to stop and reverse. These levels are denoted by…
In short: A Candelstick is a chart symbol of a specific period where the opening and closing price is given as the body and the price difference during that period is given as a line above and below the body. What is a Japanese Candlestick? Japanese Candlesticks are a technical…