Alpha is the measure of return for a given equity, portfolio, or investment. This data point is what we want to maximize without increasing factors such as risk or cost. Jensen Alpha measures return but takes into account a risk-adjusted aspect of the alpha. Using this alpha will also utilize CAPM and take into account the product or portfolio beta number. Beta is the correlation to the underlying market and how it reacts, with a 1 being a lock step with the underlying.

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With the many different products out there, people are always asking how the particular fund is giving them an edge in the market. More specifically with ETF’s and mutual funds, many wonder how they are beating the benchmark and how often they are doing so. The information ratio seeks to give us an answer to this question by measuring how a portfolio fairs compared its respective benchmark.

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Understanding the different prices is crucial technical analysis as they may represent different things. First off, let us go over what median is. Median is the mid point within a group. For example, numbers one through five, we note that three is the median as it is in the middle.

 education alltechnicalanalysis   investor education

Candlestick patterns are a wonderful way to alert yourself to potential shifts in the market. With the unique 3 river candlestick pattern, this can help alert you to a change in trend. For example purposes, we are going to look at a bearish trend and how the candle formation is going to signal a potential change in the trend. Remember, these are not one hundred percent, but rather potential setups alerting traders and investors to potential market shifts.

 education alltechnicalanalysis   investor education

For those of you who are looking for a simple and very noticeable candlestick patter, then long line candle is for you. The set up is utilizing only one candle and the message from that candle can be very clear. With searching for candlestick patterns, it is important to look at fundamental information once a pattern is identified because the goal is to understand what is causing the move and how you can better prepare for it in the future.

 education alltechnicalanalysis   investor education

For those of you who are looking for a simple and very noticeable candlestick pattern, then Marubozu is for you. The set up is utilizing only one candle and the message from that candle can be very clear. With searching for candlestick patterns, it is important to look at fundamental information once a pattern is identified because the goal is to understand what is causing the move and how you can better prepare for it in the future.

 education alltechnicalanalysis   investor education

Candlestick charts allow the user to view open, highs, lows, and closes for any given period they choose. The style of the candles can also tell a story depending on what you are looking for. With short line candles, it can tell you that the market may not know where price wants to go. A short line candle is when a candle forms and there is a short body, indicating that the open and close are similar, cause the body to be small.

 education alltechnicalanalysis   investor education

There are many different trend and momentum tools out there, and it only expands as people learn how to build unique indicators. Aroon has been around for quite some time now and is used in helping to determine the trend of the market. This particular indicator will utilize two lines and ranges from 0 to 100.

 education alltechnicalanalysis   investor education

Created by Welles Wilder, the Average Directional Index or ADX for short, is an indicator that helps the investor or trader look for movement within a market. This indicator is helped to measure the potential shift of a trend and even the strength of the move. Strength can be used in different terms such as volume strength, money flow strength, or trading range.

 education alltechnicalanalysis   investor education

Finding a pattern can be easy for some patterns and difficult for others, but the engulfing patter is probably one of the easier ones. Its name eludes to the pattern itself, which is when the first candle is engulfed by the second candle. This is effective for bother bearish and bullish trends, but there are a few aspects to take into consideration when evaluating the potential change.

 education alltechnicalanalysis   investor education

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