Using a Technical Indicator with a Price Graph

Synopsis

Objectives

  1. Introducing studies.

  2. Introducing graphic options.

  3. Reiterating date conditions.

Market Brief

Price graphs, like those used in the Wall Street Journal or other financial periodicals, are helpful aids used to determine where the current price of a security is in relationship to the prices the security traded at for some relevant past period of time. Researchers commonly employ the same technique to certain basic mathematical formulas. These formulas may be used to define trends based on changes within the formula’s value relative to some previous period. When studying the price trend of two or more related securities, it is sometimes helpful to employ a moving correlation study to better understand the change in price of a security relative to the other. A correlation study may be employed with the price series as an aid in determining price movement.