chart_school:glossary_f

Glossary - F

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Falling Three Methods: 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.

Falling Wedge: A bullish pattern that begins wide at the top and contracts as prices move lower toward a resistance breakout. See ChartSchool article on Falling Wedge (Reversal).

Fibonacci Numbers: 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 retracement 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.

Flag: 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 ChartSchool article on Flag, Pennant (Continuation).

Fundamental Analysis: A market analyst that relies on economic supply and demand information as opposed to focusing on charts and market indicators for a technical analysis. See Chart School article on Fundamental Analysis.

Futures: 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.