10 Questions
What do Bollinger Bands consist of?
Moving average and two standard deviation lines
What does the Directional Movement Index (DMI) help determine?
Strength and direction of a trend
Which candlestick pattern is characterized by a small body with long upper and lower shadows?
Highwave
What is the main purpose of Bollinger Bands in technical analysis?
Identify potential reversal
Which indicator is included in the Directional Movement Index (DMI)?
+DI, -DI, ADX
What is the special feature of Heikin-Ashi candles that helps traders overcome the biggest barrier?
Neutral candles at support/resistance
Which type of candle is considered bullish based on its wick characteristics?
Decisive with no lower wick
What signals a strong buy/sell signal in Heikin-Ashi charts?
Changing color without neutral candles at support/resistance
In Heikin-Ashi charts, what is the significance of having wicks on both sides of a candle?
Denotes an indecisive candle
Who developed Heikin-Ashi charts?
Munehisa Homma
Study Notes
Candlestick Patterns
- Three White Soldiers: a bullish pattern
- Three Black Crows: a bearish pattern
- Dark Cloud Cover: a bearish pattern
- Doji: a neutral pattern
- High Wave: a bullish pattern
- Hammers, Shooting star, Gravestone Doji, Long Legged Doji: various bullish and bearish patterns
Indicators
- Bollinger Bands: a technical analysis tool consisting of a moving average and two standard deviation lines above and below it, indicating price volatility and potential reversal points
- Upper Band (Upper BB): the top line of the Bollinger Bands
- Lower Band (Lower BB): the bottom line of the Bollinger Bands
- Median Line: the middle line of the Bollinger Bands
- Directional Movement Index (DMI): a technical indicator used to determine the strength and direction of a trend
- Positive Directional Indicator (+DI): a component of the DMI
- Negative Directional Indicator (-DI): a component of the DMI
- Average Directional Index (ADX): a component of the DMI
Heikin-Ashi Charts
- Developed by Munehisa Homma in the 1700s
- Decisive Candles: Bullish when there is NO LOWER WICK (Leg), Bearish when there is NO UPPER WICK (Leg)
- Indecisive Candles: when there are wicks on both sides
- Overcomes the Psychological barrier due to its special formation method
- Buy Signal: a strong buy/sell signal is when HA changes color without giving any neutral candle at some support/resistance
- Sell Signal: a strong buy/sell signal is when HA changes color without giving any neutral candle at some support/resistance
Test your knowledge on various trading strategies and technical analysis concepts such as stop loss, pyramiding, support & resistance, momentum, Heikin-Ashi charts, and more. Learn about bullish and bearish signals, decisive and indecisive candles, and the history behind Heikin-Ashi charts.
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