CTA Candlestick Analysis & Japanese Techniques 3

Question 1

What is the 'Ichimoku Kinko Hyo' system and its primary advantage?

Accepted Answer

A multi-component system providing support/resistance, trend direction, and momentum signals in one view

Answer

A single-line momentum indicator

Answer

A volume-based breadth indicator

Answer

A method for calculating pivot points

Question 2

In Ichimoku analysis, the 'Kumo' (Cloud) represents:

Accepted Answer

A dynamic support/resistance zone formed by the leading spans, with thickness indicating strength

Answer

A single moving average of closing prices

Answer

The difference between the conversion and base lines

Answer

A momentum oscillator bounded between 0 and 100

Question 3

The 'Evening Star' candlestick pattern signals:

Accepted Answer

A bearish reversal consisting of a large up candle, a small-body candle (star), and a large down candle

Answer

A bullish reversal at support

Answer

A continuation of the current uptrend

Answer

A neutral consolidation at resistance

Question 4

A 'Piercing Line' pattern is the bullish equivalent of which bearish pattern?

Accepted Answer

Dark Cloud Cover

Answer

Shooting Star

Answer

Bearish Engulfing

Answer

Evening Star

Question 5

What does the 'upper shadow' (upper wick) of a candlestick represent?

Accepted Answer

The distance between the high and the body's top, showing the extent to which buyers attempted to push price higher but failed

Answer

The opening price of the session

Answer

The average price during the session

Answer

The volume of trades at the high of the day

Question 6

The 'Three Inside Up' pattern is a bullish reversal pattern that combines which two patterns?

Accepted Answer

A Bullish Harami followed by a confirming up candle

Answer

Doji followed by a Hammer

Answer

Three consecutive Hammers

Answer

An Engulfing pattern followed by a Doji