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Don’t start investing or trading in stock market without proper knowledge. In Indian stock market or in any stock market few standard terms are used with the relevance of technical analysis. Sharetipsinfo suggest investors or traders must read complete glossary to understand stock market better. Learn basics of stock market with our glossary.
A rare reversal pattern characterized by a gap followed by a Doji, which is then followed by another gap in the opposite direction. The shadows on the Doji must completely gap below or above the shadows of the first and third day.
Above the market
A limit order to buy or sell a security for a specified price that is higher than the current market price. If the market does not reach the specified price, the order will go unfilled.
Absolute Breadth index
Developed by Norman Fosback, the ABI is equal to the absolute value of the difference between the advancing issues and the declining issues. It shows how much activity and volatility is taking place while totally ignoring the price direction.
The act of buying more shares of a security without causing the price to increase significantly. After a decline, a stock may start to base and trade sideways for an extended period. While this base builds, well informed traders and investors may seek to establish or increase existing long positions. In that case, the stock is said to have come under accumulation.
Accumulation Distribution Line
A momentum indicator that relates price changes with volume. It relates the closing price to the range of prices (H-L). The closer the close is to the high, the more volume is added to the cumulative total.
Advance Decline Line
One of the most widely used indicators to measure the breadth of a stock market advance or decline. The AD line tracks the net difference between advancing and declining issues. It is usually compared to a market average where divergence from that average would be an early indication of a possible trend reversal.
Advance Decline Ratio
The ratio of advancing securities over decline securities. Taking the moving average of the AD ratio will smooth it so it can be used as an overbought and oversold indicator.
A market stage of a stock that is characterized by an uptrend with subsequently higher highs and higher lows.
American Depository Receipt (ADR)
Securities issued by commercial banks that represent the shares of a foreign company. ADRs trade just like normal stocks on various US stock exchanges. Their performance usually parallels that of the parent company on its domestic exchange.
Developed by Alan Andrews, this concept that uses three parallel lines drawn from three points that you select. The points selected to begin the pitchfork are usually three consecutive major peaks or troughs. The three parallel lines extending out to the right are used as normal support and resistance points.
The date on which a company first publicly announces an impending stock split.
The translation of periods of less than a year into an annual rate for comparative purposes. To annualize quarterly figures, you multiply them by four.
The simultaneous buying and selling of securities to take advantage of price discrepancies. Arbitrage opportunities usually surface after a takeover offer.
Ascending Trend Channel
An ascending line that connects the bottoms of the down waves and is parallel to a trend line. The ascending channel line and the trend line form borders on an uptrend.
A sideways price pattern between two converging trend lines in which the lower line is rising while the upper line is flat. This is generally a bullish pattern.
Ask Also known as the “offer”, the price that the market maker guarantees to fill a buy order. A buy order placed at the market will usually be filled at the current asking (offer) price. The ask price is usually greater than the bid price.
Any possessions that have value in an exchange.
At the money
An option whose strike price is equal to the price of the underlying security
Average Directional index(ADX)
Part of the directional movement indicator system developed by J. Welle Wilder, the ADX line is based on the spread between the +DI and –DI lines from the same system.
Average True Range(ATR)
An indicator that measures a security’s volatility. High ATR values indicate high volatility and may be an indication of panic selling or panic buying. Low ATR readings indicate sideways movement by the stock.
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