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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 popular way to display and analyze financial price information in graphical form. The horizontal axis of a bar chart represents the passage of time with the most recent time periods on the right side while the vertical axis represents the stock’s price.
The difference between cash prices and the future contract prices.
A person who believes prices will decline might be described as having a “bearish” outlook. Bear markets occur when roughly 80% of all stocks decline for an extended period of time.
A long period of time when prices in the market are generally declining. It is often measured by a percentage decline of more than 20%.
An option strategy with maximum profit when the price of the underlying securities decline. In futures, short the nearby future and long the deferred in anticipation of a decline in the general level of prices.
A situation that occurs when prices break below a significant level and generate a sell signal, but then reverse course and negate the sell signal, thus “trapping” the bears that acted on the signal with losses. A bear trap is another form of whipsaw and relates to the spring.
Below the Market
A limit order to buy or sell the security for a specific price that is lower than the current market price. If the market does not reach these prices, the order will go unfilled.
A measure of a security’s systematic or market risk. While most stocks move in the same direction as the stock market, the level of the beta indicates the degree of correlation between a security and the market. The market is the benchmark and has a beta of 1.
The price at which the market maker guarantees to fill a sell order. A sell order placed at the market will usually be filled at the current bid price. The bid price is usually less than the ask price.
Blue Chip Stock
A stock well known, public company that is thought to be in good financial shape and have sound fundamentals (profitability, earnings). An investment in a blue chip is regarded as a safe investment. Examples include Reliance, Infosys, ONGC etc.
Bollinger Band Widths
This is an indicator tool in charting service. It will display the width of Bollinger Bands as an indicator o your chart.
An indicator that allows users to compare volatility and relative price levels over a period of time. It consists of three bands designed to encompass the majority of a security’s price action. Prices will often meet resistance at the upper band and support at the lower band.
Not to be confused with bond yield, it is the amount an investor pays to buy a bond . Bond prices and interest rates have an inverse relationship: when rates rise , bond prices fall; when rates decline , bond prices rise .
The return an investor would earn if a bond was purchase and held to maturity. Usually, the longer the term of a bond , the higher the interest rate that’s paid to the holder, compensating for the inflation risk of having money tied up for a long time. To determine the yield, divide the interest rate by the purchase price of the bond.
A comparison of the number of issues traded wit the number of issues listed for trading. A measurement of the number of issues advancing versus the number of issues declining on a given day or as a moving average. Many measurements are used: advances divided by declines, as a percentage, advances minus declines as net positive or negative number. The measurement consistently followed is an insight into investor sentiment and is used extensively by market analysts.
A price gap that forms on the completion of an important price pattern. A breakaway gap usually signals the beginning of an important price move .
Price of a security emerging from a previous trading pattern. The new price “Breaks out” above the high (or below the low) trading pattern lines that enclose all other prices for that security in the preceding period. Breakouts are used by technical analysts to predict substantial upside or downside movement.
A person who believes prices will advance and might be described as having a “bullish” outlook. Bull markets occur when roughly 80% of all stocks advance over an extended period of time.
A long period of time when prices in the market are generally increasing.
A situation that occurs when prices break above a significant level and generate a buy signal, but suddenly reverse course and negate the buy signal, thus “trapping” the bulls that acted on the signal with losses. A bull trap is another form of whipsaw and relates to the up thrust.
Bump and Run Reversal
A reversal chart pattern that forma after excessive speculation drives prices up too far , too fast . It is designed to identify speculative advances that are unsustainable for a long period.
A condition that indicates a good time to buy a stock. The exact circumstances of the signal will be determined by the indicator that an analyst is using. For example, it’s considered a buy signal when the MACD crosses above its signal line.
A buy order usually placed above the current price, ensuring that a security would have to trade at the set level before the buy order would be activated at 35. By placing a buy stop order just above resistance, a trader can ensure that the security will break resistance before going long. On the other hand, traders looking to catch a bottom or intraday low might place a buy stop below the current price, but near support.
A company’s repurchase of it’s own shares of stock.
Buy on Margin
A risky short-term strategy where a buyer borrows money from a broker to make an investment. The buyer believes the stock price will rise and is trying maximize profits by investing more money in the stock.
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