Home Stock Trading Technical Analysis

Technical Analysis

Technical analysis is the art and science of interpreting the supply and demand in the market for an asset, whether a stock, commodity or currency. Technical analysis helps you understand stock trends, charts, direction, and risk-reward.

RSI Indicator: The Best Way to Trade RSI Based on Data

I backtested four RSI indicator trading setups from 1-minute to daily charts across the DJ30 stocks from 1 month to 27 years, equaling over 820 years of testing data. Not all RSI configurations work, but I did discover the most profitable RSI indicator settings.

Parabolic SAR: Is This Indicator Profitable? We Test It!

I backtested seven Parabolic SAR trading setups from 1-minute to daily charts across the DJ30 stocks over 12 years, equaling over 2,880 years of testing data. On standard charts, PSAR is not a profitable trading indicator. But I did discover the most profitable PSAR configuration.

Hull Moving Average: Indicator Performance Test

The Hull moving average is a lesser-known chart indicator, and our testing reveals it outperforms other moving averages. But with only a 17% win rate, using the Hull moving average for trading is not advised due to its poor performance in consolidating markets.

Weighted Moving Averages: Test Data Says Avoid WMAs

The weighted moving average (WMA) is a widely used chart indicator, but our testing reveals it underperforms other moving averages with only a 7% win rate. Using WMA as a trading tool is not advised due to its incredibly poor performance.

How to Draw Trend Lines on a Stock Chart Like a...

Drawing trendlines on stock charts is a powerful way to assess the direction of the market. Trendlines help you understand the trend direction and timeframe to set expectations for future market moves. 

Exponential Moving Average: Mythbusting with 960 Years of Data!

The exponential moving average (EMA) is a popular chart indicator considered to be better than the simple moving average. But according to our testing, it performs much worse. I advise against using the EMA as a trading tool as it is inaccurate and can lead to traders losing money.

Simple Moving Average: 960-Year Test Results

The simple moving average is a popular, commonly used chart indicator. The SMA is typically the first indicator beginner traders learn and use, but our testing shows it is an extremely poor trading tool and should be avoided.

5 Best Moving Averages & How to Trade Them Like a...

The 5 best moving averages for traders are the simple, exponential, weighted, exponential weighted, and Hull moving averages. Understanding how to interpret moving averages is a key skill for any trader looking for improved performance.

Top 23 Stock Chart Patterns for Successful Trading

Academic research shows best chart patterns in technical analysis are the inverse head and shoulders, double bottom, triple bottom, descending triangle, and rectangle top. Each of these patterns has a proven success rate of over 85%, with an average gain of 43%.

Elliott Wave Theory: Examples & Reliability Uncovered

Elliott Wave theory has an avid following amongst technical traders, enabling an understanding of market moves in cycles and waves. But wave theory has serious reliability limitations in trading, which means it is unproven and cannot be backtested for accuracy.

Ichimoku Cloud: 600 Years of Data Says Avoid this Indicator

Backtesting the Ichimoku Cloud strategy on the DJ-30 Index stocks over 20 years resulted in 600 years of testing. The results are a dismal 10% win rate underperforming a buy-and-hold strategy 90% of the time. The Ichimoku indicator is a bad choice for traders.

MACD Indicator Reliability Tested: Traders Must Avoid It!

The Moving Average Convergence Divergence (MACD) indicator is one of the most widely used yet poor-performing technical analysis indicators. Traders are misled into believing they can profit from this indicator.

Is the KDJ Indicator Worth It? I Backtest KDJ for 600...

The KDJ indicator can be up to 63% successful if configured correctly. If KDJ is set up poorly, it can cause significant losses and a poor reliability of 5%. Our KDJ testing shows how to use and understand the KDJ indicator.

Heikin Ashi Candles Proven The Best Strategy with 360 Years of...

Heikin Ashi candle charts are better than candlesticks for maximizing returns in a professional trading strategy. Backtesting 360 years of data across 30 major stocks shows that Heikin Ashi chart strategies outperform 60% of equities vs. a buy-and-hold strategy.

Rate of Change Indicator: ROC Testing Shows a 66% Success Rate

Backtesting the price rate of change indicator on 30 Dow Jones Industrial Average stocks over 20 years resulted in an impressive 66% win rate outperforming a buy-and-hold strategy. The ROC indicator is a good choice for traders.

8 Best Bearish Patterns Based on Tested Research

Bearish patterns in technical analysis suggest a decline in an asset's value. Common examples include flags, wedges, rectangles, and triangles. Due to the stock market's inherent bull bias, short-selling using bear patterns is risky and best left to experienced traders.

10 Best Bullish Patterns for Traders Based on Data

Bullish chart patterns signal future price increases and are important to traders, but not all are accurate or profitable. Testing shows triangles, rectangles, double bottoms, and the cup and handle are the most reliable bullish patterns. Traders need to avoid bull pennants and bull flags.

Inverse Cup and Handle: 82% Reliability for Short-Sellers

The inverse cup and handle chart pattern is a technical analysis trading strategy. Traders use it to identify a breakdown in asset prices, aiming to profit from short-selling a sharp price decline. The inverse cup and handle chart pattern is considered reliable based on 556+ trades, with an 82% success rate in bull markets.

Cup and Handle Pattern: Trading a 95% Reliable Chart Pattern

Twenty years of trading research show the cup and handle pattern has a 95% success rate in bull markets and returns an average profit of +54%. The cup and handle chart pattern is reliable and accurate but can be difficult to identify.

12 Accurate Chart Patterns Proven Profitable & Reliable

Research shows the most reliable and profitable chart patterns are the Head & Shoulders, with an 89% success rate, the Double Bottom (88%), and the Triple Bottom and Descending Triangle (87%). The most profitable chart pattern is the Rectangle Top, with a 51% average profit.

Our Best Training & Strategies

Learn How to Invest in Stocks with Professional Training

Start the New Year Right: Learn stock market investing with the complete online stock trading course by Barry D. Moore, a professionally certified financial markets analyst. You will learn stock market fundamentals, stock chart technical analysis, stock screening, and strategy.

MOSES ETF Investing Strategy: Beat The Market & Lower Risk

MOSES is a stock market index ETF investing system designed to help you beat the market's performance by avoiding major stock market crashes. There are five core indicators in the Moses strategy; you can use the best approach to eliminate most losses and compound your investments to beat the market.

Beat the Market: A Proven Growth Stock Strategy

Beat the market with a 9-year proven strategy that finds financially healthy high-growth stocks with a track record of outperformance. This system gives you an investing edge by identifying the 35 best growth stocks to buy now to help you beat the S&P500.