Technical Analysis Tweet Series (1)
Keywords: CMT Association, Bar Charts, Candlestick Charts, Point and Figure Charts, Gap, Volume
By CMT Association on Twitter | About | Local Chapters
Provide an open forum for market professionals to discuss the markets from a technical perspective.
Provide a place for the public to increase their knowledge and skill in using technical analysis
Provide a place where market professionals can exchange ideas with those of differing investment disciplines.
Provide a networking forum for all participants.
Exploring Technical Analysis
Technical analysis is truly a universal language. You can talk about the markets and understand charts because it transcends all of the local languages we speak.
Dave Keller, CMT
1 🔸 2 🔸 3
The Bar Chart
Sep 7, 2022
@CMTAssociation: Are you familiar with the concept of Bar Chart?
In addition to the closing price, bar charts display at least two additional pieces of information: the highest price (H) at which the stock traded during the day and the lowest price (L) at which the stock traded during the day.
Tweet | A fourth piece of information, the opening price (O) for the day, is also displayed on some bar charts. Price is plotted on the vertical axis, and time is measured on the horizontal axis … Each trading day is represented by one vertical line, known as a bar.
Tweet | The length of the bar indicates the trading range for that day. The top of the bar records the highest price at which the security traded; the bottom of the bar records the lowest price at which the security traded that day.
Tweet | Thus, a longer bar represents a larger trading range, and a shorter bar indicates a smaller trading range. A small tick mark on the right side of the bar indicates the day’s closing price.
Tweet | A small tick mark on the left side of the bar denotes the day’s opening price, if that data is included on the bar chart. CMT Level I Curriculum - 2022 Chapter 3 “Introduction to Charts”, Part I - Dahlquist
The Candlestick Charts
Sep 21, 2022
@CMTAssociation: Are you familiar with the Candlestick Charts?
Candlestick charts are constructed in much the same way, and using the same data, as bar charts. The candlestick records the three pieces of data that are always included in the bar chart: high, low, and close.
Tweet | The candlestick is more inclusive, however, in that it always includes the opening price, which is sometimes omitted from a bar chart. Price is plotted on the vertical axis and time is measured on the horizontal axis.
Tweet | The major difference between the bar chart and the candlestick chart is that a rectangle connects the opening and closing prices. CMT Level I Curriculum - 2022 Chapter 3 “Introduction to Charts”, Part 1 - Dahlquist
The Point and Figure Charts
Sep 28, 2022
@CMTAssociation: Are you familiar with the Point and Figure Charts?
The point-and-figure charting method focuses solely on plotting price changes. ... As with other charting methods, price is plotted vertically on the point-and-figure chart.
Tweet | A horizontal move along the point-and-figure chart to a new column represents a reversal in the direction of price movement. a column of Xs represents increasing prices and a column of Os represents falling prices.
Tweet | [Price] is measured along the y-axis on point-and-figure charts. However, time is not measured on the x-axis. The x-axis is nonfunctional on point-and-figure charts... CMT Level II Curriculum - 2022 Chapter 2 “Additional Charting Methods” - Dahlquist
The Concept of Gap
Nov 30, 2022
⚡️@CMTAssociation: Are you familiar with the concept of Gap?
A gap occurs when a security opens and trades at a range totally outside the previous day’s range.
Tweet | In other words, there is no overlap between one day’s trading prices and the previous day’s trading prices, and a gap appears between the bars for the two days on a chart.
Tweet | A gap is usually a sign that important information was released during the period between the bars that had an extraordinary effect on the buyers and sellers. If the reason for the gap is legitimate, the price continues in the direction in which it broke out.
Tweet | When the gap is closed (“covered” or “filled”), however, there is the danger that the gap was false and prices will reverse their trend.
Tweet | MT Level I Curriculum - 2022 Chapter 6 “Breakouts, Stops, and Retracements”– Kirkpatrick and Dahlquist
The Concept of Volume
Nov 23, 2022
@CMTAssociation: Are you familiar with the concept of Volume?
Volume … refers to the number of units of a given tradable item (shares of stock, futures contracts, options contracts, etc.) exchanged between buyers and sellers over a given length of time … typically a day.
Tweet | CMT Level I Curriculum - 2022 Chapter 10 “Introduction to Volume Analysis” – Dormeier
Volume is commonly portrayed at the bottom of the price chart, with its own scale, using a vertical bar to represent the total volume for each interval.
Tweet | … The histogram at the bottom of the chart shows that, about 20,000,000 shares of TWTR changed hands on many days during the month. However, a couple of days in the month jump out. On July 8, volume exceeded 100,000,000 shares. ⤵️
Tweet | July 23 also saw extremely heavy trading with approximately 90,000,000 shares changing hands. CMT Level I Curriculum - 2022 Chapter 4 “Introduction to Charts” (Part 2) – Dahlquist ⤵️
Source: Twitter, Inc. Investor Relations - Stock Quote and Stock Chart *Chart added to the thread
