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A Glossary Of Technical Analysis Terms (PDF Included)

Patrick Stockdale
Written by Patrick Stockdale | March 11, 2022

Within technical analysis, there are many common terms that new traders and investors will need to know when learning about technical analysis concepts, theories, strategies and definitions.

This technical analysis glossary provides definitions for over one hundred terms used within technical analysis.

There is also a downloadable technical analysis glossary pdf too.

Understanding these terms will help a trader or investor easily learn about technical analysis much faster.

The glossary can be filtered by letter so readers can easily find the definition for a particular technical analysis term.

A | B | C | D | E | F | G | H | I | K | L | M | N | O | P | R | S | T | U | V | W | Y | Z

A

Below are technical analysis terms that start with the letter A.

Advanced-Decline Line: A technical indicator that measures the number of advancing stocks relative to the number of declining stocks.

Apex: The point of intersection of two trendlines. A new trend may develop as prices approach the intersection

Arms Index: This technical indicator is a ratio of the average volume of declining stocks divided by the average volume of advancing stocks.

Ascending Triangle: An ascending triangle is a bullish technical analysis chart pattern that forms on the price charts of financial markets. The pattern forms when there is a horizontal resistance level with higher lows as the price moves up to this price resistance level.

Average Balance Volume Line: A moving average applied to the tick volume based on a comparison of the current and previous period’s closes of a financial market.

B

Below are technical analysis terms that start with the letter B.

Backtesting: Backtesting is a method of analyzing the profitability and validity of a trading strategy by using historical price data of financial markets to test how a trading strategy would have performed in the past.

Bar Chart: A bar chart, otherwise known as an OHLC chart (Open High Low Close Chart) is a type of price chart that plots price data including the open price, high price, low price and closing price of a financial market over a specific time period. Bar charts are plotted on a price chart in the form of a vertical line.

Bear Flag: A bearish flag is a technical analysis chart pattern that forms on the price charts of financial markets. The chart pattern is shaped in the form of an upside down flag and indicates a potential future downward price movement.

Bear Trap: A false price movement in a financial market to the downside that traps traders into thinking the price is going to continue lower when it doesn’t.

Bearish Indicators: Bearish indicators are technical analysis indicators that indicate that the price of a financial market may experience a downward price movement.

Bollinger Bands: Bollinger Bands are a technical analysis overlay indicator that can be plotted on the price charts of any financial markets. They are plotted as 3 levels, one center simple moving average with 2 other levels plotted at a standard deviation above and below the center simple moving average.

Breakout: A breakout is a technical analysis term that indicates that the price of a financial market has broken out of a pre determined price range, typically below a price support level or above a price resistance level.

Breakaway Gap: A breakaway gap is a price gap that forms after the price of a market gaps out of a technical analysis chart pattern. A breakaway gap can indicate the beginning of a new price trend in the direction of the gap.

Bull Flag: A bullish flag is a technical analysis chart pattern that forms on the price charts of capital markets. The chart pattern is shaped in the form of a flag and indicates a potential future upward price movement.

Bullish Indicators: Bullish indicators are technical analysis indicators that indicate that the price of a financial market may experience an upward price movement.

Bull Trap: A false price movement in a financial market to the upside that traps traders into thinking the price is going to continue higher when it doesn’t.

C

Below are technical analysis terms that start with the letter C.

Candlestick Charts: Candlestick price charts are a type of price bar that plots historical price data of a financial instrument with 4 components highlighted within a price bar including an opening price, high price, low price and closing price. This price bar is illustrated on a chart as thick body.

Channels: A channel is a technical analysis chart pattern where price consolidates between two parallel lines on a chart.

Charles Dow: Charles Dow was an American journalist who co founded Dow Jones & Company. He is the inventor of the technical analysis theory called the “Dow Theory”.

Chart Patterns: Chart patterns are specific technical analysis patterns or formations that develop on the price charts of a financial asset. These chart patterns can signal the future direction of a financial market.

Consolidation: An area on a price chart of a financial market where price tightens up and consolidates.

Continuation Pattern: A continuation pattern is a chart pattern that forms on a price chart that indicates that the price of the financial market will continue in the same direction as the dominate trend.

Cup And Handle: The cup and handle pattern is a bullish technical analysis chart pattern that forms on the price charts of a financial market. It is shaped like a cup with a handle and is used to forecast potential future upward price movements in a market.

D

Below are technical analysis terms that start with the letter D.

Doji: A candlestick pattern whereby the open and close price of a market are almost identical in price.

Descending Triangle: The descending triangle is a bearish technical analysis chart pattern that forms on the price charts of financial instruments. It forms when there is a clear horizontal support level and lower highs as prices trades into the support level.

Divergences: A technical divergence is when two or more technical analysis indicators do not confirm each other and instead diverge from one another.

Double Bottom: A double bottom pattern is a bullish technical analysis chart pattern that forms on the price chart of a financial market whereby a support level has been tested twice and the price has moved away from that level to the upside.

Double Top: A double top pattern is a bearish technical analysis chart pattern that forms on the price charts of a financial market whereby the resistance level has been tested twice and the price has moved away from that level to the downside.

Dow Theory: Dow theory is a technical analysis theory invented by Charles Dow that signals a buy signal when the Dow Transportation and the Dow Industrials averages closes above a prior price high and a sell signal is given when both averages closes below a prior price low.

Downtrend: When the price of a financial market is going lower by forming lower highs and lower lows.

E

Below are technical analysis terms that start with the letter E.

Earnings Gap: The gap up or down of price on a price chart of a stock that is caused by an earnings release.

Elliott Wave Theory: A theory that market behavior follows a pattern of 5 waves up and 3 waves down. It was invented by Ralph Nelson Elliott.

Engulfing Candle: A candlestick pattern that forms when a small candlestick on one day is followed the next day by a larger candlestick. This can be a bullish engulfing candlestick or bearish engulfing candlestick.

Evening Star: A bearish candlestick pattern used to detect when a trend is about to reverse. The pattern forms over 3 days.

Exhaustion Gap: An exhaustion gap pattern is a price gap that occurs at the end of a trend and it can signal that the trend is ending or that the trend is reversing in the opposite direction.

F

Below are technical analysis terms that start with the letter F.

False Breakouts: A false breakout, also known as a failed breakout, is when the price of a financial market breaks out of a chart pattern or through a support or resistance level and fails to continue in the same direction.

Fibonacci Extensions: A technical analysis overlay indicator that signals potential profit target areas or price reversal areas for a financial market. Common extension levels include 61.8%, 100%, 161.8%, 200%, and 261.8%.

Fibonacci Ratio: A series of numbers and ratios developed by mathematician Leonardo Fibonacci. These ratios are used as an overlay technical indicator that can signal price reversals in financial markets.

Fibonacci Retracement Levels: These are price levels where price may form a support or resistance levels. The levels are derived from Fibonacci sequence of 23.6%, 38.2%, 61.8%, and 78.6%.

Flag: A chart pattern that forms in the price chart of financial markets in the shape of a flag. There are bull flags and bear flags.

G

Below are technical analysis terms starting with the letter G.

Gann Theory: A theory otherwise known as Gann Angle Theory invented by William Gann whereby it is believed that the price of a market changes at different angles and price changes move similar to natural geometric shapes.

Gap Down: When the price of a financial market gaps down to a lower price.

Gap Fill: When the price of a financial market fills a previous gap on the price chart.

Gap Up: When the price of a market gaps up to a higher price.

H

Below are technical analysis terms starting with the letter ‘H’.

Hammer: A bullish candlestick pattern shaped like a hammer. They have a small body and a long tail.

Head And Shoulders: The head and shoulders pattern is a bearish chart pattern that forms on the price charts of a financial market. The pattern is shaped in the form of a head and shoulders and signals the price could go lower.

Heikin-Ashi: Heikin-Ashi is a chart indicator that averages price data to create a Japanese candlestick chart that filters out market noise.

I

Below are technical analysis terms that start with the letter I.

Ichimoku Cloud: A collection of technical indicators that shows support and resistance levels, momentum and trend direction.

Indicators: Technical Indicators are technical analysis tools or ‘indicators’ that help traders and investors with measuring and analyzing a financial market.

Inside Day:A day in which the total range of price of a financial market is within the range of the previous day’s price range.

Inverse Head And Shoulders: The inverse head and shoulders pattern is a bullish chart pattern that can form on the price charts of financial markets. It is shaped like an upside down head and shoulders and can signal the price of the financial market might rise in the future.

K

Below are technical analysis terms that start with the letter K.

Keltner Channels: A technical analysis indicator that has 3 bands overlaid on a price chart to measure volatility and the direction of a trend. The bands consist of an upper, lower and center band.

Kicker Pattern: A 2 bar candlestick pattern that indicates a change in the direction of a financial market’s price trend.

L

Below are technical analysis terms that start with the letter L.

Line Chart: A line chart is a graphical representation of a financial instrument’s historical price action that connects a series of data points with a continuous line.

Long-Legged Doji: A candlestick pattern that has a long upper and lower wick with the opening and closing price almost identical meaning a very small body for the candlestick.

Low Volume Pullback: When the price of a financial market trades from a higher price down to a lower price and the move down occurs with low volume or low selling volume.

M

Below are technical analysis terms that start with the letter M.

MACD: The moving average convergence divergence is a technical indicator that shows two lines. The first line is the difference between two exponential moving averages and the second line is usually a 9 period EMA of the first line. A buying or shorting signal is given when these two lines cross.

MACD Histogram: A variation of the MACD system that plots the difference between the signal and the MACD lines.

McClellan Oscillator: An oscillator indictor that measures the difference between the 19 day and the 39 day exponentially smoothed averages of the daily net advanced decline figures.

McClellan Summation Index: A cumulative sum of all daily McClellan oscillator readings that offers longer range analysis of market breath.

Moving Average: A moving average is a technical analysis overlay indicator that plots a calculation of a series of data points over a specific time period and divides these data points by the time period length to arrive at an average.

N

Below are technical analysis terms that start with the letter N.

Net Volume: A technical analysis indicator indicates whether a financial market is leaning bullish or bearish. It is calculated by subtracting a markets uptick volume by it’s downtick volume.

Noise: In technical analysis, noise refers to a financial market that is confusing to analyze and there are no obvious signals on the future price movements of that market.

O

Below are technical analysis terms that start with the letter O.

On Balance Volume: The On Balance Volume (OBV) is a running total of the upside and downside volume plotted with the price line.

Oscillators: These are indicators that determine when a market is in an overbought or oversold condition.

Overbought: A market condition in a financial market whereby the price has exceeded it’s normal range to the upside.

Oversold: A market condition in a financial market whereby the price has extended it’s normal range to the downside.

P

Below are technical analysis terms that start with the letter P.

Parabolic Sar: A technical analysis indicator used to help determine the price direction of a financial market. It also can signal when the price trend is changing.

Pennant: A continuation price chart pattern that looks similar to a flag pattern except it’s more horizontal. It typically forms over a 2 to 4 week period.

Pivot Points: Pivot points are a technical analysis indicator used intraday to calculate the overall trend of the market. Pivot Points are the average of the intraday high and low, and the closing price from the previous trading day.

Point & Figure Charts: A price chart type that plots prices of a financial markets on a graph is x’s and o’s where x’s represent rising prices and o’s represent declining prices.

Pullback: When the price of a financial market pullbacks from a higher price to a lower price.

R

Below are technical analysis terms that start with the letter R.

Rate Of Change (ROC): The speed at which a variable changes over a specific period of time. It is displayed as a ratio.

Renko Chart: A type of chart that is built using price movement rather than both price and time intervals.

Resistance: Resistance is a price level on a price chart of a financial market where price struggles to go higher and as a result reverses from that level to the downside.

Relative Strength Index: The relative strength index (RSI) is a technical analysis momentum indicator that measures the relative strength of a financial market. When prices are at RSI extreme levels, it can indicate a market is overbought or oversold.

S

Below are technical analysis terms that start with the letter S.

Sentiment Indicators: A sentiment indicator is a technical analysis indicator that attempts to measure the degree of bullishness or bearishness in a financial market. It also attempts to measure the sentiment of traders and investors for a specific market.

Simple Moving Average: A moving average plotted as a line on the price chart of a financial market that gives equal weight to each day’s price data.

Stochastics: An overbought-oversold oscillator indicator that signals a financial market is overbought if it returns a reading above 80 and oversold when it returns a reading of below 20.

Support: A price level or zone, where the price of a financial market reverses from and does not trade below that price area.

Symmetrical Triangle: A symmetrical triangle pattern is a technical analysis price chart pattern that forms when prices are trading sideways. The upper trendline is declining and the lower trendline is rising.

T

Below are technical analysis terms that start with the letter T.

Technical Analyst: A technical analyst, also known as a market technician or chartist, is a professional whose job it is to use technical analysis to measure and attempt to forecast future price movements of a tradable asset by using technical indicators and/or chart patterns.

Trendlines: Straight lines drawn on the price chart of a financial market that connect important levels to each other and can signal the steepness of a current trend in a market.

Triple Bottom: A triple bottom pattern is a bullish technical analysis chart pattern that forms on the price chart of a financial market whereby a support level has been tested three times and the price has moved away from that level to the upside

Triple Top: A triple top pattern is a bearish technical analysis chart pattern that forms on the price charts of a financial market whereby the resistance level has been tested three times and the price has moved away from that level to the downside.

Tri-Star: A 3 line candlestick pattern that signals a potential price reversal in the trend of the financial market.

U

Below are technical analysis terms that start with the letter U.

Uptrend: When the direction of the price of a financial market is rising.

Up Trendline: A straight line drawn upward and to the right connected by rising support levels on the price chart of a financial instrument.

Unique Three River: A candlestick pattern that is composed of three candlesticks that predicts a potential bullish reversal in a financial market.

Upside Tasuki Gap: An Upside Tasuki Gap is a three bar candlestick formation that is used to indicate the continuation of the current price trend of a market.

V

Below are technical analysis terms that start with the letter V.

V Pattern: A price pattern that forms on the price chart of a financial market that is shaped like the letter V.

Volume: A technical analysis indicator that highlights the volume traded in a financial market at a given time period.

Volume Profile: A technical analysis indicator that displays the volume traded in a financial market at a specific price.

Volume Weighted Average Price: The Volume Weighted Average Price (VWAP) is a technical analysis overlay indicator that indicates the average price of a financial market, adjusted for its volume.

W

Below are technical analysis terms that start with the letter W.

Wedge: A price chart pattern characterized by a contracting range in prices coupled with an upward trend in prices or a downward trend in prices, also known as a rising wedge or falling wedge.

Williams %R: A technical analysis indicator showing the current closing price in relation to the high and low of the past specific number of days.

Wyckoff Accumulation: A phase in a market cycle whereby the price of the financial market is trading within a price range or sideways price action. It occurs after a long period of downtrending prices. It identifies potential accumulation of large market players like institutions.

Wyckoff Distribution: A phase in a market cycle whereby the price of the financial market is trading within a price range or sideways price action. It occurs after a long period of up trending prices. It identifies potential distribution of long trades by large market players like institutions or shorting trades by large traders or investors.

Y

Below are technical analysis terms that start with the letter Y.

Yearly Price Candles: A candlestick price chart where each candlestick bar represents 1 year of historical price data.

Yo-Yo: A slang term for extremely volatile financial markets.

Z

Below are technical analysis terms that start with the letter Z.

Zig-Zags: A zig-zag is a three-wave chart pattern against the major price trend of the market which breaks down into a 5-3-5 sequence.

Technical Analysis Glossary PDF

Below is a free downloadable technical analysis glossary in PDF format.