📖Glossary - K
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Last updated
Developed by Perry Kaufman, Kaufman's Adaptive Moving Average (KAMA) is a moving average designed to account for market noise or volatility. This trend-following indicator can identify the overall trend, time turning points, and filter price movements. See our ChartSchool article on KAMA.
Similar to Bollinger Bands, Keltner Channels form volatility-based bands above and below an exponential moving average of price. Channel direction and price breakouts above or below the channels can be used to identify trend reversals. See our ChartSchool article on Keltner Channels.
A one-day chart pattern where prices sharply reverse during a trend. In an uptrend, prices open to new highs and then close below the previous day's closing price. In a downtrend, prices open lower and then close higher. The wider the price range on the key reversal day and the heavier the volume, the greater the odds that a reversal is taking place.