\documentclass[10pt,a4paper]{article} % Packages \usepackage{fancyhdr} % For header and footer \usepackage{multicol} % Allows multicols in tables \usepackage{tabularx} % Intelligent column widths \usepackage{tabulary} % Used in header and footer \usepackage{hhline} % Border under tables \usepackage{graphicx} % For images \usepackage{xcolor} % For hex colours %\usepackage[utf8x]{inputenc} % For unicode character support \usepackage[T1]{fontenc} % Without this we get weird character replacements \usepackage{colortbl} % For coloured tables \usepackage{setspace} % For line height \usepackage{lastpage} % Needed for total page number \usepackage{seqsplit} % Splits long words. %\usepackage{opensans} % Can't make this work so far. Shame. Would be lovely. \usepackage[normalem]{ulem} % For underlining links % Most of the following are not required for the majority % of cheat sheets but are needed for some symbol support. \usepackage{amsmath} % Symbols \usepackage{MnSymbol} % Symbols \usepackage{wasysym} % Symbols %\usepackage[english,german,french,spanish,italian]{babel} % Languages % Document Info \author{lh2018} \pdfinfo{ /Title (technical-analysis-of-financial-markets.pdf) /Creator (Cheatography) /Author (lh2018) /Subject (Technical Analysis of Financial Markets Cheat Sheet) } % Lengths and widths \addtolength{\textwidth}{6cm} \addtolength{\textheight}{-1cm} \addtolength{\hoffset}{-3cm} \addtolength{\voffset}{-2cm} \setlength{\tabcolsep}{0.2cm} % Space between columns \setlength{\headsep}{-12pt} % Reduce space between header and content \setlength{\headheight}{85pt} % If less, LaTeX automatically increases it \renewcommand{\footrulewidth}{0pt} % Remove footer line \renewcommand{\headrulewidth}{0pt} % Remove header line \renewcommand{\seqinsert}{\ifmmode\allowbreak\else\-\fi} % Hyphens in seqsplit % This two commands together give roughly % the right line height in the tables \renewcommand{\arraystretch}{1.3} \onehalfspacing % Commands \newcommand{\SetRowColor}[1]{\noalign{\gdef\RowColorName{#1}}\rowcolor{\RowColorName}} % Shortcut for row colour \newcommand{\mymulticolumn}[3]{\multicolumn{#1}{>{\columncolor{\RowColorName}}#2}{#3}} % For coloured multi-cols \newcolumntype{x}[1]{>{\raggedright}p{#1}} % New column types for ragged-right paragraph columns \newcommand{\tn}{\tabularnewline} % Required as custom column type in use % Font and Colours \definecolor{HeadBackground}{HTML}{333333} \definecolor{FootBackground}{HTML}{666666} \definecolor{TextColor}{HTML}{333333} \definecolor{DarkBackground}{HTML}{584DA3} \definecolor{LightBackground}{HTML}{F4F3F9} \renewcommand{\familydefault}{\sfdefault} \color{TextColor} % Header and Footer \pagestyle{fancy} \fancyhead{} % Set header to blank \fancyfoot{} % Set footer to blank \fancyhead[L]{ \noindent \begin{multicols}{3} \begin{tabulary}{5.8cm}{C} \SetRowColor{DarkBackground} \vspace{-7pt} {\parbox{\dimexpr\textwidth-2\fboxsep\relax}{\noindent \hspace*{-6pt}\includegraphics[width=5.8cm]{/web/www.cheatography.com/public/images/cheatography_logo.pdf}} } \end{tabulary} \columnbreak \begin{tabulary}{11cm}{L} \vspace{-2pt}\large{\bf{\textcolor{DarkBackground}{\textrm{Technical Analysis of Financial Markets Cheat Sheet}}}} \\ \normalsize{by \textcolor{DarkBackground}{lh2018} via \textcolor{DarkBackground}{\uline{cheatography.com/70804/cs/17949/}}} \end{tabulary} \end{multicols}} \fancyfoot[L]{ \footnotesize \noindent \begin{multicols}{3} \begin{tabulary}{5.8cm}{LL} \SetRowColor{FootBackground} \mymulticolumn{2}{p{5.377cm}}{\bf\textcolor{white}{Cheatographer}} \\ \vspace{-2pt}lh2018 \\ \uline{cheatography.com/lh2018} \\ \end{tabulary} \vfill \columnbreak \begin{tabulary}{5.8cm}{L} \SetRowColor{FootBackground} \mymulticolumn{1}{p{5.377cm}}{\bf\textcolor{white}{Cheat Sheet}} \\ \vspace{-2pt}Not Yet Published.\\ Updated 24th November, 2018.\\ Page {\thepage} of \pageref{LastPage}. \end{tabulary} \vfill \columnbreak \begin{tabulary}{5.8cm}{L} \SetRowColor{FootBackground} \mymulticolumn{1}{p{5.377cm}}{\bf\textcolor{white}{Sponsor}} \\ \SetRowColor{white} \vspace{-5pt} %\includegraphics[width=48px,height=48px]{dave.jpeg} Measure your website readability!\\ www.readability-score.com \end{tabulary} \end{multicols}} \begin{document} \raggedright \raggedcolumns % Set font size to small. Switch to any value % from this page to resize cheat sheet text: % www.emerson.emory.edu/services/latex/latex_169.html \footnotesize % Small font. \begin{multicols*}{4} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Module 1}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Technical Analysis:}} The process of making prediction about the future by analyzing historical market action. {\bf{Market action:}} includes the 4 primary sources of market data are 1) price, 2) time, 3) volume (or open interest for derivative contracts) and 4) breadth.} \tn % Row Count 6 (+ 6) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{3 Key Assumptions of TA:}} 1. All market influences are discounted (or reflected) in prices. – Focus on price action 2. History repeats itself. – That explains why chart patterns are important 3. Prices move in trends. – information disseminated from informed professionals or insiders to aggr. investors, and then to the general investing public. In addition, technicians claim that processing new information takes time.} \tn % Row Count 15 (+ 9) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Fundamental vs. Technical -}} {\bf{TA:}} Focuses on market action; Studies the effect; Tool of forecasting and timing {\bf{FA:}} Focuses on economic forces of D/S that influence prices; Studies the cause; Tool for forecasting only {\bf{Both:}} prices acts as a leading indicator of the fundamentals, since assumption 1 is true than TA includes FA.} \tn % Row Count 22 (+ 7) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Arithmetic Scale}} (Linear Scale) – Show identical distances for identical point/price moves – space between 2 to 4 is the same as 20 and 22 – Problem: 100\% from 2 to 4 but only 10\% return from 20 to 22 (visual distortion) – ok for: short-term charts (\textless{}=1 yr)} \tn % Row Count 28 (+ 6) % Row 4 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Ratio Scale}} (Log Scale) – Show identical distances for identical percentage moves – space between 2 to 4 is the same as 4 and 8 – Application: long-term charts (\textgreater{} 1 yr)} \tn % Row Count 32 (+ 4) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Module 2}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Trend:}} direction of the market action} \tn % Row Count 1 (+ 1) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{6 Tenets of Dow Theory:}} 1. The Averages Discount Everything. 2. The Market Has Three Trends. 3. Major Trends Have Three Phases. 4. The Averages Must Confirm Each Other. 5. Volume Must Confirm The Trend. 6. A Trend Is Assumed To Be In Effect Until It Gives Definite Signals That It Has Reversed.} \tn % Row Count 7 (+ 6) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Trading Rule for Dow:}} When the yield on DJIA falls to 3\% or below =\textgreater{} sell signal (market tops) • When the yield on DJIA increases to 6\% or above =\textgreater{} buy signal (market bottoms)} \tn % Row Count 11 (+ 4) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Support and Resistance}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Return-Risk Ratio}} = (next resistance – current price)/(current price – next support)} \tn % Row Count 2 (+ 2) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{Make sure RRR is greater than 3} \tn % Row Count 3 (+ 1) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{buy above a key support} \tn % Row Count 4 (+ 1) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{sell just below a key resistance} \tn % Row Count 5 (+ 1) % Row 4 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Autocorrelation}}: correlation between members of series of observations ordered in time. Math.:Correlation measures the linear relationship between two random variables • -1 ≤ correlation ≤ +1} \tn % Row Count 10 (+ 5) % Row 5 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{Negative Autocorrelation: for performance means higher risk. for trading means market is ranging, oscillating.} \tn % Row Count 13 (+ 3) % Row 6 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Rule for breakout:}} Penetrated by more than 3\% and for more than 2 consecutive days} \tn % Row Count 15 (+ 2) % Row 7 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Tim Fong's 3-Step Price Action Analysis:}} 1. Touching down or up 2. Fighting 3. Departing – Reversing the trend if you win the battle in step 2 – Continuing the trend if you lose the battle in step 2} \tn % Row Count 20 (+ 5) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Module 3}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Market Order:}} a buy or sell order to be executed by the broker immediately at current market prices. • Limit Order – A limit order is an order to buy a security at no more or sell at no less) than a specific price.} \tn % Row Count 5 (+ 5) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Stop Order:}} A stop order is an order to buy (or sell) a security once the price of the security has climbed above (or dropped below) a specified stop price. When the specified stop price is reached, the stop order will become a market order.} \tn % Row Count 10 (+ 5) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Trailing Stop Order:}} entered with a stop parameter that creates a moving or trailing activation price – This parameter is entered as a percentage change or actual specific amount of rise (or fall) in the security price – Key advantage of setting a trailing stop sell orders are used to maximize and protect profit as a stock's price rises and limit losses when it's price falls} \tn % Row Count 18 (+ 8) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Reversal pattern}}( reversal in trend is pending): H\&S tops and bottoms; Double tops and bottoms; Rounded/saucer tops and bottoms; Key reversal day; Island reversal day} \tn % Row Count 22 (+ 4) % Row 4 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Continuation pattern:}} Triangles; Wedges; Flags and Pennants; Broadening Tops; Rectangles} \tn % Row Count 24 (+ 2) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Module 3 (cont.)}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Pattern Formation and Its Trading Application:}} 1.Classification of reversal vs. continuation pattern; 2. Determination of bullishness or bearishness.; 3. Confirmation of pattern and breakout; 4. Measurement of minimum price objectives} \tn % Row Count 5 (+ 5) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Bid 1.21 Ask 1.25 Bid Size 5:}} the market is willing to buy 500 shares at 1.21 and to sell at 1.25} \tn % Row Count 8 (+ 3) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Tops vs. Bottoms:}} 1)The bottom formation usually takes longer to form.; 2)Volume confirmations are generally more important for bottom formation.} \tn % Row Count 11 (+ 3) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Flag vs. Pennant:}} pennant consolidation is formed by two converging trendlines. volume tends to contract even more during formation of a pennant. both have similar measuring implication, take similar time to develop} \tn % Row Count 16 (+ 5) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Module 3 (cont. 2)}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{VIX:}} Measure of the implied volatility of at-the-money S\&P 500 index options with 30-day maturity} \tn % Row Count 3 (+ 3) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Statistics}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{sample mean}}: x\_bar = ( Σ xi ) / n financial interpretation: expected return} \tn % Row Count 2 (+ 2) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Standard Deviation:}} s = sqrt {[} Σ ( xi – x\_bar )2 / ( n – 1 ) {]} Financial Interpretation: Volatility (Risk or Deviation from the Expectation)} \tn % Row Count 5 (+ 3) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Skewness:}} Biasedness towards upside potential or downward risk (i.e. positive skewness = long right tail of the return distribution)} \tn % Row Count 8 (+ 3) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Kurtosis:}} Stability or Surprise Index (Excess Kurtosis \textgreater{} 0 means that it has more peakedness than normal distribution)} \tn % Row Count 11 (+ 3) % Row 4 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Correlation:}} Effectiveness of hedge (Ex.: USD \& Gold)} \tn % Row Count 13 (+ 2) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Indicators}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Trend-following Indicators:}} 1) SMA, WMA and EMA; 2) MA Envelopes; 3) Bollinger Bands} \tn % Row Count 2 (+ 2) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Momentum Indicators}} (Oscillators): 1) ROC; 2) RSI; 3) MACD; 4) Stochastic} \tn % Row Count 4 (+ 2) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Momentum Indicators}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{Momentum:}} measures the speed of price change and provides a leading indicator of changes in trend.} \tn % Row Count 3 (+ 3) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Momentum signals:}} 1) Zero crossover; 2) Divergence (or trend analysis of momentum vs. price) 3)Extreme values (overbought vs. oversold)} \tn % Row Count 6 (+ 3) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{A divergence occurs when price and momentum indicator fail to confirm one another.} \tn % Row Count 8 (+ 2) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{Momentum signals should always be used in conjunction with a trend-reversal signal by the actual price} \tn % Row Count 11 (+ 3) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{Mom. Indic. (cont.)}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{ROC}}t =(Pt – Pt-n)/ Pt-n} \tn % Row Count 1 (+ 1) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{ROC}} = {[}(Current Price / Price n periods ago) – 1{]} x 100} \tn % Row Count 3 (+ 2) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{\textasciicircum{}MACD\textasciicircum{}}}t = \textasciicircum{}EMA\textasciicircum{}t, 12 – \textasciicircum{}EMA\textasciicircum{}t, 26} \tn % Row Count 4 (+ 1) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{RSI}} = 100 – 100/(1+RS) where RS = (total gain / n days) / total loss / n days)} \tn % Row Count 6 (+ 2) % Row 4 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{RSI = 0 if falls all days; RSI = 100 if up all days; RSI = 50 if flat} \tn % Row Count 8 (+ 2) % Row 5 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{RSI {\bf{thresholds}}: – Use 20/80 when the stock is "trending"; – Use 30/70 when "oscillating"} \tn % Row Count 11 (+ 3) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} \begin{tabularx}{3.833cm}{X} \SetRowColor{DarkBackground} \mymulticolumn{1}{x{3.833cm}}{\bf\textcolor{white}{More Indicators}} \tn % Row 0 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{DMI}} made of ADX, +DI and -DI} \tn % Row Count 1 (+ 1) % Row 1 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{ADX \textgreater{} 20 =\textgreater{} trending; • Long when DI+ crosses over DI- • Short when DI+ crosses below DI-} \tn % Row Count 3 (+ 2) % Row 2 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{TR}} = max(Ht - Lt, Ht - Ct-1, Ct-1 – Lt)} \tn % Row Count 4 (+ 1) % Row 3 \SetRowColor{white} \mymulticolumn{1}{x{3.833cm}}{{\bf{Keltner Channel}} vs. MA envelopes: KC uses ema by definition; ATR is used to calculate the bands for KC} \tn % Row Count 7 (+ 3) % Row 4 \SetRowColor{LightBackground} \mymulticolumn{1}{x{3.833cm}}{{\bf{KC}} made up of 2 bands plotted around an EMA} \tn % Row Count 8 (+ 1) \hhline{>{\arrayrulecolor{DarkBackground}}-} \end{tabularx} \par\addvspace{1.3em} % That's all folks \end{multicols*} \end{document}