# Author: learnstocks

## Introduction to Technical Indicators

This chapter looks at what are called Technical Indicators. Technical Indicators are defined as, “tools that are implemented by a technical analyst to in order to determine the likelihood and direction of future price move trends.” Technical Indicators : Table of Contents Introduction Bollinger Bands MACD...

## SMA vs EMA Moving Averages

Let us first summarize the exponential moving average. When choosing a moving average that can react quickly to price changes and trends, then the exponential moving average is the one to choose. Act fast in finding a trend and you act fast in making money....

## Exponential Moving Average

With simple averages the calculation is, well, simple. The simplicity of the calculation can sometimes cause a bit of a flaw to the SMA. The flaw is due to spikes in the price of a security. For example, if you were to calculate the 4 day SMA of stock XYZ...

## Simple Moving Average

A simple moving average is formulated by adding up the last X number of market days’ closing prices and dividing that total by X. For example, if you wanted to calculate a stock XYZ’s 3 day simple moving average. You would add up 3 day’s...

## Introduction to Moving Averages

What is a moving average, you ask? Well, instead of looking at a jagged chart moving up and down you could choose to smooth out its price movements with a moving average. Therefore, a moving average is derived from the price of a stock over...

## Level II Quotes

Okay, so what is level II you ask? Level II’s provide the stock trader with a lot of very useful information about the stock’s current trading. It shows at a glance all of the open orders for buys (the bid column on the left, in...

## Symmetrical Triangle

The Symmetrical Triangle chart pattern is formed when a stock’s highs and lows converge together to form a triangle shape. Therefore, the stock is having less and less price fluctuation. This is a stand off with the buyers and sellers. The Symmetrical Triangle pattern is...

## Relative Strength Indicator (RSI)

The RSI or Relative Strength Index is a technical indicator used to find when a stock has been oversold or overbought. The RSI is usually plotted below the chart and its number always ranges from 0 to 100. As you can see from the chart...

## Stochastics

The technical indicator called Stochastics is used to determine patterns of uptrends and downtrends in a stock’s trading pattern. The oscillation of the Stochastics shows you when a stock is nearing or within an oversold area or nearing or within an overbought area. Stochastics come...

## Reverse Head and Shoulders Pattern

Also called an Inverse Head and Shoulders Pattern.  This is a mirrored version on the standard Head and Shoulders pattern, the Reverse Head and Shoulders pattern is formed with an initial valley (first shoulder), followed by a lower valley (the head) and finally a higher...