Introduction

Technical analysis is the examination of past price movements to forecast future

price movements. Technical analysts are sometimes referred to as chartists
because they rely almost exclusively on charts for their analysis.
Technical analysis is applicable to stocks, indices, commodities, futures,
currencies or any tradable instrument where the price is influenced by the forces
of supply and demand. Price refers to any combination of the open, high, low or
close for a given security over a specific timeframe. The time frame can be based
on intraday, daily, weekly or monthly price data and last a few hours or many
years. In addition, some technical analysts include volume or open interest
figures with their study of price action.
AmiBroker provides a comprehensive set of technical analysis tools that will be
presented in this chapter

Price charts
AmiBroker can display the prices using:
line chart
this mode is used when current symbol uses price fixing and only close
price is available

traditional bar chart

this mode is used when continuous trading is enabled, but open price is not
available (or equals to close price)

Japanese Candlesticks
this mode is used when continuous trading is enabled with
open/close/high/low data

A line chart is the simplest type of chart. One price (close) is plotted for each
time period. A single line connects each of these price points. The main strength
of this chart type is simplicity.
Bar charts are one of the most popular types of charts used in technical
analysis. For each trading day a vertical line is plotted. The top of the
vertical line indicates the highest price a security traded at during the day,
and the bottom represents the lowest price. The closing price is displayed by the
mark on the right side of the bar and opening prices are shown on the left side
of the bar.
Developed by the Japanese in the 1600s, candlestick charts are merely bar charts
that extenuate the relationship between open, high, low and closing prices. Each
candlestick represents one period of data (day-week) and consists of an upper
shadow, lower shadow and the body. The upper shadow is the highest price that the
stock traded at for the period while the lower shadow represents the lowest
price. The candlestick body is black when the close is less than the open or
white when the close is greater than the open. The top of the body is the opening
price if the candle is black and the candle is referred to as a long black
candle. If the candle is white, the top of the body is the closing price and the
candle is referred to as a long white candle.
Steven Nisons articles that explain Candlestick charting appeared in the
December, 1989 and April, 1990 issues of Futures Magazine. The definitive book on
the subject is Japanese Candlestick Charting Techniques also by Steve Nison.
There are many different candlestick formations. Some are considered to be minor
formations while others are major. Candlestick charts dramatically illustrate
supply/demand concepts defined by classical technical analysis theories.
Major Candlestick Chart Formations:
Gravestone Doji: A doji (open and close are the same) and the high is
significantly higher than the open, high and closing prices. This formation
typically occurs at the bottom of a trend and signals a bullish reversal.
Dragon-fly Doji: A doji (open and close are the same) and the low is