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| b | c
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l | m n
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v w |
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| Key Reversal day |
| The true key reversal day marks an
important turning point, but cannot be correctly identified as
such until well after the fact i.e., after prices have moved
significantly in the opposite direction of the prior trend. |
| Line chart |
| This type of chart produces a solid
line by connecting only the closing prices. Only the closing price
is plotted for each successive day. Many chartists believe that
because the closing price is the most critical price of the
trading day, a line (or close only) chart is a more valid measure
of price activity. |
| Lower tops and bottoms |
| When every decline in the prices of
scrip carries it to the successive lower levels and every counter
rally fails in bringing them back to the earlier higher levels,
the result is formation of a lower highs and lower low chart. |
| Logarithmic (Ratio) Scale |
| It is a method of charting in which
equal distances on a chart represents equal ratio or percentage.
For example a distance from 10 to 20 in a logarithmic scale
represents a change of 100% of value, a distance of 20 to 30
represents a change of 50% and a change from 30 to 40 represents a
change of 33% in value. |
| Long Term Charts |
|
| Weekly and monthly charts
that compress price in such a way that the time horizon can be
greatly expanded and much longer time periods can be studied. Long
range price charts provide a perspective on the market trend that
is impossible to achieve with the use of daily charts alone. |
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