Hammer and Hanging Man
(Candlestick Reversal Pattern)
In a Hammer, during a downtrend, there is an initial sharp sell off to new lows. However, by the end of the day, the market rallies to close at or near its high for the day.
The sharp recovery suggests that the bearish sentiment may be beginning to wane and if a move above the high of the Hammer days occurs during the next day’s trading there is a stronger risk of complete trend reversal.
In a Hanging man, during an uptrend there is a sharp sell off after the market. By the end of the day, the market rallies to close at or near the high for the day.
This pattern definitely requires confirmation. The recovery in price over the day could mean the bulls are still in control. However, a break to new highs on the next trading day is required to confirm. Alternately, a decline to test the low of the Hanging Man day will suggest a trend reversal.
Harami - Bullish and Bearish
(Candlestick Reversal Pattern)
The first bar to develop is a long black/white day. The second day will usually be comprised of a short day that is completely engulfed by the real body of the first.
Following a long black day at end of a downtrend, a white candlestick opens higher than the previous day’s close. Price is then unable to follow through the previous day selling pressure and the uncertainty causes shorts to be covered. (Bullish Harami)
Following a long white day at end of an uptrend, a black candlestick opens lower than the previous day’s close. Price is then unable to follow through the previous day selling pressure and the uncertainty causes long positions to be covered. (Bearish Harami)
The pattern is indicative that a reversal is possible. However, it is always preferable to have other supporting technical evidence of a potential reversal such as a bullish/bearish divergence or break of trend line.
Harami Cross - Bullish and Bearish
(Candlestick Reversal Pattern)
The first bar to develop is a long black/white day. The second day a doji cross that is completely engulfed by the real body of the first will complete.
Following a long black day at end of a downtrend, a white candlestick opens higher than the previous day’s close. Price is then unable to follow through the previous day selling pressure and the uncertainty causes shorts to be covered. (Bullish Harami Cross)
Following a long white day at end of an uptrend, a black candlestick opens lower than the previous day’s close. Price is then unable to follow through the previous day selling pressure and the uncertainty causes long positions to be covered. (Bearish Harami Cross)
The pattern is indicative that a reversal is possible. However, it is always preferable to have other supporting technical evidence of a potential reversal such as a bullish/bearish divergence or break of trend line.
Head and Shoulders
A price pattern associated with market peaks, composed of three prominent price highs. In an uptrend there is one prominent high in the middle with two slightly lower highs on either side. The pattern is said to resemble a head and shoulders. When a line is drawn through the two lows on either side of the “head”, and prices break through that “neckline”, then a downtrend may be beginning. When the same pattern occurs in reverse as price declines it is called an “Inverse Head and Shoulders”.
Hedge Funds and Portfolio Managers
Invest customer funds in the FX markets.
Higher/Lesser Degree
All waves are constructed internally of impulsive and corrective waves and ultimately all waves will be part of a larger wave pattern. Therefore, within a five-wave move higher that is labeled wave 1, waves 1, 3 and 5 (the impulse waves) will be constructed of five internal waves. These internal waves will be of “one lesser degree” to the larger wave 1. Also, the larger wave 1 may continue to develop as a five-wave move higher itself. These larger waves are of “one higher degree”
In the example shown, the waves labeled in blue are of “one lesser degree” to the waves labeled in red. The waves labeled in red are of “one lesser degree” to the waves labeled in green and of “one higher degree” to the waves labeled in blue. The waves labeled in green are of “one higher degree” to the waves labeled in red.
Histogram
Indicators may often be plotted as vertical lines around a zero line.
Historic Volatility
There are many forms of measuring volatility, the most common is Historic Volatility that considers the standard deviation of the log value of the daily difference in closes over the length detailed in the parameter. The result is then normalized on an annual basis and plotted. Volatility is utilised by many option traders as a tool to determine how volatile price has been and compare this with market traded volatility.