Technical Analysis For Dummies, 3rd Edition

Part V

Dynamic Analysis

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In this part…

• Learn that a moving average is an arithmetic method of smoothing price numbers so that you can see and measure a trend. A straight line is a good visual organizing device, but a dynamic line — the moving average — more accurately describes what's really going on.
• Find out that momentum (the speed of a price change) is the single best tool for detecting when a trend is about to end rather than just putting in a minor pullback.
• Get the scoop on the Bollinger band, the most popular way traders incorporate consideration of volatility into their trading plans.
• Understand how point-and-figure charting strips away time and displays only significant prices on the chart, resulting in filtered price action.
• Survey some combinations of techniques and get some guidance on the process of putting techniques together to forge a systematic approach to trading.
• Check out how the financial cycle follows the economic and business cycles but with the addition of something new — risk management.