Technical Analysis

ATR, or Average True Range, measures the average distance a market travels over a chosen number of periods, including gaps. It is a pure volatility reading with no directional bias. Traders use ATR to set stop distances that respect normal noise, to size positions consistently, and to judge whether current conditions are unusually quiet or unusually fast.

A candle that closes below its open — sellers finished the period in control.

Bollinger Bands are a volatility indicator made up of a moving average with upper and lower bands that expand and contract as market volatility changes. They help traders judge whether price is becoming stretched, identify volatility changes, and support both trend-following and mean reversion analysis.

A breakout occurs when price moves decisively beyond a defined level such as a range high, trendline or consolidation boundary. It signals that the balance between buyers and sellers has shifted and can start a sustained move. Breakouts also fail often, so traders look for confirmation through follow-through, expanding range and a successful retest of the broken level.

A candle that closes above its open — buyers finished the period in control.

A single bar on a candlestick chart showing the open, high, low and close for one period.

The price at which a candle finishes its period — the standard evidence that a move is genuine, not a spike.

Price resuming its existing direction after a pause or pullback.

A move beyond a level that fails and returns inside, trapping traders who acted on the initial break.

Indicators that confirm a move after it is already underway.

Indicators that attempt to signal a move before it happens.

Momentum describes how strongly price is moving in one direction. Strong momentum suggests buyers or sellers remain firmly in control and that a move is likely to continue. Weakening momentum, where each push travels a shorter distance than the last, often warns that a slowdown, pause or reversal is approaching even while price is still rising or falling.

A moving average smooths price into a single line by averaging recent closes, making the underlying direction easier to see. Simple and exponential versions are the most common, with the exponential type reacting faster to new prices. Traders use moving averages to define trend, to locate dynamic support and resistance, and to time pullback entries.

A pullback is a temporary move against the prevailing trend before it resumes. It gives trend traders a lower-risk entry than chasing an extended move, because the stop can sit behind nearby structure. The judgement is always the same: is this a pause within a healthy trend, or the start of a genuine reversal?

Price reaching a level and being pushed straight back, usually leaving a long wick behind.

A candle with a long wick and a small body, showing price was pushed into an area and then forced straight back out.

A change of direction where the existing trend structure breaks and the opposite side takes control.

A sustained directional move, defined by higher highs and higher lows, or lower highs and lower lows.

The specific candle whose close activates an entry.

The thin line above or below a candle body showing a price that was reached but not held.