Technical analysis is based almost entirely on the analysis
of price and volume. The fields which define a futures or commodities price and
volume are explained below.
Open - This is the price of the first trade for the
period (the first trade of the day). When analyzing daily data, the Open is
especially important as it is the consensus price after all interested parties
were able to "sleep on it."
High - This is the highest price that the security
traded during the period. It is the point at which there were more sellers than
buyers (i.e., there are always sellers willing to sell at higher prices, but the
High represents the highest price buyers were willing to pay).
Low - This is the lowest price that the security
traded during the period. It is the point at which there were more buyers than
sellers (i.e., there are always buyers willing to buy at lower prices, but the
Low represents the lowest price sellers were willing to accept).
Close - This is the last price that the security
traded during the period. Due to its availability, the Close is the most often
used price for analysis. The relationship between the Open (the first price) and
the Close (the last price) are considered significant by most technicians. This
relationship is emphasized in candlestick charts.
Volume - This is the number of shares (or contracts)
that were traded during the period. The relationship between prices and volume
(increasing prices accompanied with increasing volume) is important.
Open Interest - This is the total number of
outstanding contracts (i.e., those that have not been exercised, closed, or
expired) of a future or option. Open interest is often used as an indicator.
Bid - This is the price a market maker is willing to
pay for a security (i.e., the price you will receive for the future or commodity
if you sell).
Ask - This is the price a market maker is willing to
accept (i.e., the price you will pay to buy the future or commodity).