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12 Types of Technical Indicators Used by Stock Traders

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If you’re planning to hold a portfolio of blue chip stocks well into retirement, then short-term movements in the market are not likely your biggest worry.

However, if you dabble in the stock market on a day-to-day basis, or if you simply want to know what drives the thinking of other market participants, it can be very beneficial to understand the basics of technical indicators.

Many traders swear by them to help with the timing of their trades or to alert them of trends. But, even for an investor more focused on the underlying fundamentals of companies, learning how these indicators work can provide added conviction on new or existing trades.

Types of Technical Indicators

Today’s infographic comes to us from StocksToTrade.com, and it explores the fundamentals behind 12 of the most commonly-used technical indicators. It differentiates between lagging and leading indicators, and also explains some basic tactics for incorporating these markers into an overall investment strategy.

12 Types of Technical Indicators Used by Stock Traders

The infographic differentiates between four different types, including trend, momentum, volatility, and volume indicators.

Trend indicators
These technical indicators measure the direction and strength of a trend by comparing prices to an established baseline.

Moving Averages: Used to identify trends and reversals, as well as to set up support and resistance levels.
Parabolic Stop and Reverse (Parabolic SAR): Used to find potential reversals in the market price direction.
Moving Average Convergence Divergence (MACD): Used to reveal changes in the strength, direction, momentum, and duration of a trend in a stock’s price.

Momentum indicators
These technical indicators may identify the speed of price movement by comparing the current closing price to previous closes.

Stochastic Oscillator: Used to predict price turning points by comparing the closing price to its price range.
Commodity Channel Index (CCI): An oscillator that helps identify price reversals, price extremes, and trend strength.
Relative Strength Index (RSI): Measures recent trading strength, velocity of change in the trend, and magnitude of the move.

Volatility Indicators
These technical indicators measure the rate of price movement, regardless of direction.

Bollinger bands: Measures the “highness” or “lowness” of price, relative to previous trades.
Average True Range: Shows the degree of price volatility.
Standard Deviation: Used to measure expected risk and to determine the significance of certain price movements.

Volume Indicators
These technical indicators measure the strength of a trend based on volume of shares traded.

Chaikin Oscillator: Monitors the flow of money in and out of the market, which can help determine tops and bottoms.
On-Balance Volume (OBV): Attempts to measure level of accumulation or distribution, by comparing volume to price.
Volume Rate of Change: Highlights increases in volume. These normally happen mostly at market tops, bottoms, or breakouts.

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Cannabis

The Allure of Craft Cannabis to Investors

Craft products are taking the retail world by storm. Find out why investors should be paying close attention to craft cannabis and its potential impact.

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The Investor Appeal in Craft Cannabis

They say if you do what you love, then the money will follow. In the multi-billion dollar cannabis business, that has certainly proved true for those who have been passionate about the plant for decades — otherwise known as craft growers.

Today’s infographic from Pasha Brands dives into the huge consumer demand for craft products, and why investors should pay attention to this trend as it extends into cannabis.

The Perfect Craft Product

Chances are, you may have encountered any of the following at least once: microbrewed beer, specialty coffee, premium wine, or organic food. They’ve become so popular, that craft versions of all these are steadily carving a valuable niche in their original markets.

 U.S. Market Size, 2017Craft Market Size, 2017Share of total
Beer vs Microbrew Beer$111B$26B23%
Coffee vs Specialty Coffee$32B$10B31%
Wine vs Premium Wine$80B$44.8B56%
Food vs Organic Food$898B$49.4B5.5%

Whether it’s introducing flavors into brews, slow-roasting beans, producing wine in small lots, or using a conscious “farm to table” label — what they have in common is the careful attention that’s paid to the process from start to end.

Craft cannabis bears a strong resemblance to all of these in that way, as growing it involves extra care, compared to large-scale producers. For example, hand-trimming is more labor intensive than using machines, but results in products with superior quality.

What are some other characteristics of craft cannabis?

  • Attention to detail
    A hands-on approach allows growers to personally ensure each cannabis plant is healthy.
  • Sustainable practices
    The use of organic farming to save energy, creating a smaller environmental footprint.
  • Social responsibility
    Smaller growers typically leverage local connections, creating employment opportunities.
  • Artisanal branding
    Sophisticated and modern packaging helps appeal to different types of craft cannabis consumers.

It’s clear why consumers care about craft cannabis. But what does it offer investors?

Making the Case for Craft

Investors should be paying close attention to craft cannabis for three key reasons: a higher price point, a focus on quality, and access to the retail market.

Upscale Price Tag

On average, organic cannabis has a higher price point attached to it, compared to regular grade cannabis.

  • Industry average: $9.02/ gram
  • Organic average: $11.40/ gram

Using organic methods to grow cannabis means that the final product on shelves boast an enhanced potency and effect. Since craft cannabis is also grown organically, it’s clear that consumers are willing to spend more to secure a premium product.

Promise of Quality

It might not come as a surprise that the most famous craft cannabis regions are also where the biggest volume of legal cannabis sales come from. California and Canada accounted for nearly 38% in global market share in 2017:

  • Worldwide sales: $9.5 billion
  • California sales: $3 billion
  • Rest of U.S. sales: $5.5 billion
  • Canada sales: $0.6 billion
  • Rest of world: $0.4 billion

These two areas have a foothold in cannabis sales, and with recreational legalization unfolding in both – and 75 million people living between the two jurisdictions – it will only continue to grow.

Opening the Doors

Following nation-wide legalization in Canada and an increasing number of states in the U.S., the continent is facing a cannabis shortage. Why? As it turns out, while craft growers are abundant, they still face regulatory hurdles in order to move from the “gray” underground market into launching legal operations.

Craft cannabis could be a cornerstone for industry growth, but its growers have been in the shadows for a long time. As cannabis gains momentum, tapping into the huge network of craft growers will be key for success.

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How the Modern Consumer is Different

We all have a stereotypical image of the average consumer – but is it an accurate one? Meet the modern consumer, and what it means for business.

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How the Modern Consumer is Different

How the Modern Consumer is Different

There is a prevailing wisdom that says the stereotypical American consumer can be defined by certain characteristics.

Based on what popular culture tells us, as well as years of experiences and data, we all have an idea of what the average consumer might look for in a house, car, restaurant, or shopping center.

But as circumstances change, so do consumer tastes – and according to a recent report by Deloitte, the modern consumer is becoming increasingly distinct from those of years past. For us to truly understand how these changes will affect the marketplace and our investments, we need to rethink and update our image of the modern consumer.

A Changing Consumer Base

In their analysis, Deloitte leans heavily on big picture demographic and economic factors to help in summarizing the three major ways in which consumers are changing.

Here are three ways the new consumer is different than in years past:

1. Increasingly Diverse
In terms of ethnicity, the Baby Boomers are 75% white, while the Millennial generation is 56% white. This diversity also transfers to other areas as well, such as sexual and gender identities.

Not surprisingly, future generations are expected to be even more heterogeneous – Gen Z, for example, identifies as being 49% non-white.

2. Under Greater Financial Pressure
Today’s consumers are more educated than ever before, but it’s come at a stiff price. In fact, the cost of education has increased by 65% between 2007 and 2017, and this has translated to a record-setting $1.5 trillion in student loans on the books.

Other costs have mounted as well, leaving the bottom 80% of consumers with effectively no increase in discretionary income over the last decade. To make matters worse, if you single out just the bottom 40% of earners, they actually have less discretionary income to spend than they did back in 2007.

3. Delaying Key Life Milestones
Getting married, having children, and buying a house all have one major thing in common: they can be expensive.

The average person under 35 years old has a 34% lower net worth than they would have had in the 1990s, making it harder to tackle typical adult milestones. In fact, the average couple today is marrying eight years later than they did in 1965, while the U.S. birthrate is at its lowest point in three decades. Meanwhile, homeownership for those aged 24-32 has dropped by 9% since 2005.

A New Landscape for Business?

The modern consumer base is more diverse, but also must deal with increased financial pressures and a delayed start in achieving traditional milestones of adulthood. These demographic and economic factors ultimately have a ripple effect down to businesses and investors.

How do these big picture changes impact your business or investments?

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