Best Stock Charts
The best stock charts have a number of different features, all of which can be confusing. Iqchart.com offers a tutorial in chart reading, with all pertinent terms.
"With price volatility at an all-time high, it is becoming increasingly important for the investor to recognize patterns in the movements of the stocks they own or are interested in purchasing," the tutorial starts. "The interpretation of market activity using technical analysis provides clues to the investor as to the future behavior of the price. Generally speaking, the technical investor will use a combination of price, volume and time-sensitive technical indicators to maximize their profits. This page provides explanations for a complete list of technical indicators utilized by IQ Chart, Infospace's award-winning technical analysis charting software."
The following are some of the important vocabulary terms for understanding stock charts and being able to differentiate between a helpful stock chart and a useless stock chart. This information can be found at http://www.iqchart.com/101/tech_rsr.asp, along with other important terms.
Average True Range
Average True Range is a measure of volatility, and is measured by taking a moving average of the greatest value of the following:
* The distance between this period's high & low,
* The distance from last period's close to this period's high or
* The distance from last period's close to this period's low
The Breadth Advance/Decline is a market breadth indicator developed by Martin Zweig. It is an indicator designed to track the momentum of the broader market and anticipate large upswings or downswings in price. This is based on the concept that the number of advancing securities accompanying a market rise is positively correlated with the probability for further advances. Likewise, the number of declining issues pushing the market downward can be correlated with the probability for further declines.
Money Flow is one of the more sophisticated and powerful technical indicators relating price to volume, and is calculated based in each tic during the trading day. The value increases by the shares traded on the level of an uptick, and decreased by the shares traded on the level of a downtick.
Relative Strength Ranking (RSR)
Relative Strength Ranking (RSR) is based on the idea that most successful stocks must rank well as compared to the overall market based on several criteria. RSR measures the performance of a stock based on the past year's worth of data. Relative Strength Ranking is measured on a scale of 0 to 100, where each number can be considered a performance percentile out of all available individual stocks in the market.
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