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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 hypothetical trade that does not involve any monetary transactions .Paper trading is a risk-free way to learn the ropes of the market .
An indicator that sets trailing price stops for long or short positions. Also refered to as the “stop” and reversal indicator” , Parabolic SAR is more popular for setting stops than for establishing direction or trend . If the trend is up , buy when the indicator moves above the price .
A continuation chart pattern that is similar to the flag , except that is more horizontal and resembles a small symmetrical triangle . Like the flag , the pennant usually lasts from one to three weeks and is typically followed by a resumption of the prior trend.
A stock that usually sells for less than $1 per share , though the price may rise because of significant promotion . Penny stocks are very speculative and risky due to their lack of available information and poor liquidity.
Percent Investment Advisors Bullish
A measure of stock market bullish sentiment that is published weekly by investor’s Intelligence . When only 35% of professionals are bullish , the market is considered oversold . A reading of 55% is considered to be overbought.
A bullish two day reversal pattern . the first day, in a downtrend , is a long black day . The next day opens at a new low , then closes above the mid-point of the body of the first day .
The point at which resistance disintegrates and the stock price begins to rise past the prior resistance level . This point can be considered the optimal time to buy as the bulls are gaining strength .
Point & Figure Chart
A type of chart consist8ing of columns of X’s (showing price rises) and O’s (showing price falls ) arranged on a square grid . When the index increases , a rising column of blacks X’s is created – a rally . When the index falls , a desceding column of red O’s appears – a decline .
A style of trading of trading characterized by holding open positions for an extended period of time . Contrast this with day trading , where a trader buys , then sells out of a position before the market closes that day .
Price By Volume
A horizontal histogram that overlays a price chart . The histogram bars stretch from left to right starting at the left side of the chart . The length of each bar is determined by the cumulative total of all volume bars for the periods during which the closing price fell within the vertical range of the histogram bar .
Similar to Bollinger Bands , price channels form boundaries above and below the price line and can be used as indicators of volatility . Price channels are created by specifying a number of periods that will charts an n-periods high or low around the price line .
Price Momentum Oscillator (PMO)
A proprietary indicator created by Carl Swenlin and featured on his website , DecisionPoint.com
The right to sell a stock or commodity future at a given price before a given date . The owner of the put option is speculating that the price of the stock will go down and is therefore bearish.
Based on CBOE statistics , the Put/Call Ratio equals the total number of pits divided by the total number of calls. When more puts are traded than calls the ratio will exceed 1. As an indicator , the Put/Call Ratio is used to measure market sentiment .When the ratio gets too low , it indicates that call volume is high relative to put volume and the market may be overly bullish or complacent . When the ratio gets too high , it indicates that put volume relative to put volume and the market may be overly bullish or complacent . When the ratio gets too high , it indicates that put volume is high relative to call volume and the market may be overly bearish or in panic .
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