technical analysis

[Votke2310]

can anyone explain the difference between spikes, runaway days, and key reversal days?

 

[JonBooth]

Dont follow the heard - You must approach markets in an unconventional way if you want to earn superior, risk-adjusted, returns. You cannot make decisions in the same fashion as the herd and expect your portfolio’s performance to deviate from the average.

 

[tomorton]

Take a look at thepatternsite.com or the books by Steve Nison on candlestick patterns.

I'm unclear on runaway days but a spike would be a short-lived price move typically indicated by a long wick on a candlestick. The length of the wick should be several times the length of the open-close main body. The time duration should be very short, several time shorter than the candlestick time-frame. Typically, the spike is also counter-trend and is not followed through. Not that common or significant when trading on the daily time-frame.

A key reversal day is often also referred to as an outside key reversal day. The high of the day is higher than the prior high and the low is lower than the prior low. Typically, price also opens outside the prior day's range and closes outside it also in the opposite direction, so it might open above yesterday's high but closes below yesterday's low. These are held to be powerful markers of price direction reversal which should commonly then continues subsequently in the direction indicated by the op-close direction, e.g. the Dow 31/07.

 

[Votke2310]

thank you that was a great explanation

 

[wallstreetwarrior87]

can anyone explain the difference between spikes, runaway days, and key reversal days?

To explain them in any other terms above and beyond stating the obvious (ie - in hindsight "look its here, look its there"), would mean you understand them. If you understand them, you can begin to grasp why they occur, and when they are likely to occur. That is real trading!

Need to dig deeper than the technical surface - if you dont know why they occur, the technical terms will mean nothing to you in terms of providing anything valuable/usable to make a trading decision.

They happen for a reason, they are not random, it is due to consequence.

 

[Votke2310]

To explain them in any other terms above and beyond stating the obvious (ie - in hindsight "look its here, look its there"), would mean you understand them. If you understand them, you can begin to grasp why they occur, and when they are likely to occur. That is real trading!

Need to dig deeper than the technical surface - if you dont know why they occur, the technical terms will mean nothing to you in terms of providing anything valuable/usable to make a trading decision.

They happen for a reason, they are not random, it is due to consequence.

how can I learn why they occur?