Technical Analysis

What are Kagi Charts?

Kagi charts display the price action for a security.  This method was developed by the Japanese in the late 1800s.  Kagi charts are similar to point and figure charts in that it is not time based, but is dependent upon the price movement of the security to print a new line on the chart.
 

How to Construct a Kagi Chart

Kagi charts are a combination of vertical and horizontal lines.  Each vertical line represents the total price movement from low to peak before a counter move occurs.  As each previous high or low is exceeded a thick black line is drawn to indicate that dominant trend is still in play.  While all counter moves are indicated by a thin colored line.

Dead Cat Bounce Definition

A dead cat bounce is a trading term used to define when a stock in a severe decline has a sharp bounce off the lows.  A dead cat bounce occurs due to the enormous amount of short interest in the market.  Once the supply and demand is unbalanced, any sort of rally will generate a massive short covering which leads to a swift price mo

What is the Money Flow Index

The Money Flow Index MFI is a momentum indicator which is used to measure the amount of money flowing into and out of a security.   The indicator is similar to the Relative Strength Indicator, but ins

Commodity Selection Index (CSI) Definition

The Commodity Selection Index (CSI) is a momentum indicator that uses the ADXR component of the Directional Movement indicator to select commodities suitable for short-term trading.  The CSI was developed by Welles Wilder and was first published in the book New Concepts in Technical Trading Systems.  The higher the CSI, the greater the volatility and strength of trend.  Traders use the CSI is to find commodities with the highest volatility, because it has the greatest odds of quick gains.  The CSI is designed for short-term traders that have money management rules that account for the risks associated with highly volatile markets.

Random Walk Index Definition

The random walk index (RWI) is a technical indicator that attempts to determine if a stock's price movement is random or nature or a result of a statistically significant trend.  The random walk index attempts to determine when the market is in a strong

Volume Rate of Change Definition

The volume rate of change (ROC) is a technical indicator used to gauge the volatility in a security's volume.  The volume rate of change is a powerful indicator when estimating a security's ability to push through key