Glossary - F
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A bearish continuation pattern. A long black body is followed by three small body days, each fully contained within the range of the high and low of the first day. The fifth day closes at a new low.
Futures contracts are forward contracts, meaning they represent a pledge to make a certain transaction at a future date. These exchange-traded contracts require the delivery of a commodity, bond, currency or stock index, at a specified price, on a specified future date.
A bullish pattern that begins wide at the top and contracts as prices move lower toward a resistance breakout. See our ChartSchool article on .
The Fibonacci number sequence (1,2,3,5,8,13,21,34,55,89,144,… ) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next number is 61.8 percent, which is a popular Fibonacci number. The inverse of 61.8 percent is 38.2 percent, also used as a Fibonacci retracement number. It is the ratio of the Fibonacci sequence that is important and valuable, not the actual numbers in the sequence.
A continuation chart pattern that generally lasts less than three weeks and resembles a parallelogram that slopes against the prevailing trend. The flag represents a minor pause in a dynamic price trend. See our ChartSchool article on .
A method of market analysis that relies on economic supply and demand information as opposed to focusing on charts and market indicators (like ). See our ChartSchool article on .
