APS (Assets Per Share) - All of a company's assets except patents,
trademarks, and other intangible assets minus all liabilities and
the par value of preferred stock, divided by the number of shares
outstanding.
Aroon - An indicator system that can be used to determine whether
or not a stock is trending and the strength of its trend. The Aroon
Oscillator signals an upward trend when it rises above zero and a
downward trend when it falls below zero. The farther away the oscillator
is from the zero line, the stronger the trend.
Aroon Oscillator - An indicator called the Aroon Oscillator
can be constructed by subtracting Aroon(down) from Aroon(up). Since
Aroon(up) and Aroon(down) oscillate between 0 and +100, the Aroon
Oscillator oscillate between -100 and +100 with zero as the center
crossover line.
Ask (or asking price) - Declared price at which a seller is
willing to handover a security.
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.
Bar Chart - 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.
Bearish - Security or market marked by a tendency to fall,
as opposed to Bullish, which means the exact opposite.
Benchmark - Portfolio reference. For example, a manager who has the Dow Jones as benchmark will seek to do better than this index.
Bid - Posted price at which a buyer is prepared to take a security.
Blue Chip - Term for high-yield, low-risk securites. A high
investment quality both in terms of capitalisation and the level of
transactions. Example : IBM.
Bullish - Security or market marked by a tendency to rise, as opposed to bearish, which means the exact opposite.
Candlestick charts - A charting method, originally from Japan,
in which the high and low are plotted as a single line and are referred
to as shadows. The price range between the open and the close is plotted
as a narrow rectangle and is referred to as the body. If the close
is above the open, the body is white. If the close is below the open,
the body is black.
Chaikin Money Flow (CMF) - An oscillator that helps signal
if a stock is undergoing accumulation or distribution. It is calculated
from the daily readings of the Accumulation Distribution Line. The
CMF is unlike a momentum oscillator in that it is not influenced
by the daily price change. Instead, the indicator focuses on the
location of the close relative to the range for the period (daily
or weekly).
Chaikin Oscillator - A technical analysis tool that compares
the day's closing price to the intraday high and intraday low through
this calculation: volume x [(close-low)- (high-close)] / (high -
low). The figure is calculated daily and then a running total is
kept. The oscillator is created by comparing the three-day moving
average to the ten-day moving average.
Closing price - Final price for a security when the trading
session ends. Reference price reproduced by the financial newspapers.
Commodity Channel Index (CCI) - Developed by Donald Lambert,
the CCI is an indicator designed to identify cyclical turns in commodities.
It may also be applied to stocks or bonds.
Consensus - Aggregated forecasts drawn from a number of
different brokers about the likely future earnings of a company.
Corporate action - Any event initiated by a corporation
which impacts its shareholders.
Directional Movement Indicator (DMI) - An indicator that plots
a positive +DI line measuring buying pressure and a negative -DI line
measuring selling pressure. The DMI pattern is bullish as long as
the +DI line is above the -DI line. The Average Directional Index
line is derived from this system and is based on the spread between
the +DI and -DI lines.
DPS (Dividend Per Share) - Dividend per share is the dividend
payment for each share.
DY (Dividend Yield) - Dividend yield per share is the ratio
of the last dividend paid out to the current share price. Dividend
yield can be either gross (including the dividend tax credit) or net
(without the dividend tax credit). Dividend yield is based on market
value, never on book value.
EBIT - Earnings before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation and
Amortization
Envelopes - Lines that are placed at fixed percentages above
and below a moving average line. Envelopes help determine when a market
has traveled too far from its moving average and is overextended.
EPS (Earnings per share) - Net profit divided by the number of securities comprising the capital. It is primarily used to calculate the PER (price/earnings ratio), and discover the amount of earnings for each share. This provides a means of comparing the earnings over several years when the number of shares has been changed.
Exponential Moving Average (EMA) - A moving average that gives
greater weight to more recent data in an attempt to reduce the lag
of (or "smooth") the moving average.
Fundamental analysis - Analytical model using economic information
and company bookkeeping information to assess its growth potential
and the progress of its activities.
Good Till Date (GTD) order - The order duration is defined
by the user and set at a certain date. The order is cancelled if it
is not executed by that date.
Highest - Highest exchange rate for a security over a period.
Lowest - Lowest exchange rate for a security over a period.
Limit order - Stock exchange order assigned a price above
which it will no longer be executed. This is the maximum price for
which the buyer is prepared to take the security, or the minimum
price in the case of a sale.
Limit price - Order comprising a price limit below which
the seller is not prepared to relinquish securities, and above which
the buyer is not prepared to purchase securities.
Linear (Arithmetic) Scaling - On a linear (arithmetic) scale
chart, the spacing between each point on the vertical scale is identical.
Thus the vertical distance between 10 and 20 is the same as the
vertical distance between 90 and 100. While this kind of scaling
is intuitive and easy to recreate by hand, linear scaling should
not be used on charts with large vertical ranges. A move from 10
to 20 is much better than a move from 90 to 100, but on a linear
scale they both appear the same.
Line Chart - Price charts that connect the closing prices
of a given market over a span of time that form a curving line on
the chart. This type of chart is most useful with overlay or comparison
charts that are commonly employed in intermarket analysis. It is
also used for visual trend analysis of open end mutual funds.
Liquidity - A market is said to be liquid when an adequate
level of offers is matched with a sufficient level of demands to
set prices and allow securities to be traded.
Long position - Position where an investor buys on the market.
MACD (Moving Average Convergence/Divergence) - Technical
analysis term for the crossing of two exponentially smoothed moving
averages.
Market capitalisation - Assessment of the market value
of a company listed on the stock exchange, at a given time. This
is calculated by multiplying the share price by the number of securities
in circulation.
Market value (or market price) - A security's last reported
sale price (if on an exchange) or its current bid and ask prices
(if over-the-counter); i.e. the price as determined dynamically
by buyers and sellers in an open market.
Momentum - Mathematical tool indicating the speed at which
prices are moving. When it is positive (negative) it indicates an
upward (downward) acceleration in prices. The changeover from zero
may be interpreted as a changing trend and provides a signal to
buy (in the event of an upward transition) or to sell (for a downward
transition).
Moving average - The moving average is a technical assessment
instrument. It takes the form of a curve where each point represents
the average for prices over a period defined as a number of days.
It is used to discover trends and provide signals to buy and sell.
Net assets - Book value of all a company's resources minus
liabilities.
Opening price - First price set by a value (or index) during
a stock exchange trading session.
Order book - List which allows investors to view the status
of their transactions.
Parabolic SAR - An indicator that sets trailing price stops
for long or short positions. Also referred 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 below the price. If the trend is down,
sell when the indicator moves above the price.
PER (Price Earnings Ratio) - This ratio is extensively used
to calculate whether a share is expensive or not in relation to comparable
companies or the stock market as a whole.
RES (Resistance) - Horizontal line on a graph joining the highest
price a security achieves over a given period. The resistance line
is therefore an obstacle to higher prices as many participants adopt
a selling position on its approach. The break in the line acts as
an indicator to sell. Whenever a resistance is crossed it becomes
a support.
RSI (Relative Strength Index) - A technical analysis indicator
which measures the magnitude of gains over a given time period against
the magnitude of losses over that period. The equation is RSI =
100 - 100 / (1 + RS) where RS = (total gains / n) / (total losses
/ n) and n = number of RSI periods. The value can range from 1 to
100. Some technical analysts believe that a value of 30 or below
indicates an oversold condition and that a value of 70 or above
indicates an overbought condition.
Settlement date - The date by which an executed securities
transaction must be settled, by paying for a purchase or by delivering
a sold asset; usually three business days after the trade was executed
(T+3).
Short - To have a short selling position means being a short
seller.
Short position - Position where an investor sells on the
market.
Small caps - Shares of small companies with a low level of
market capitalisation.
Spread - The difference between the bid and the ask. Generally
speaking, more liquid (heavy volume) stocks usually have smaller
bid/ask spreads. Less liquid stocks (light volume) usually have
larger spreads.
Stochastic Oscillator - A technical indicator which compares
a stock's closing price to its price range over a given period of
time. The belief is that in rising market stocks will close near
their highs, while in a falling market they will close near their
lows.
StochRSI - An oscillator used to identify overbought and
oversold readings in RSI. Because RSI can go for extended periods
without becoming overbought (above 70) or oversold (below 30), StochRSI
provides an alternative means to identify these extremities. StochRSI
is found by applying the Stochastics formula to RSI readings --
hence its name. As an indicator of RSI, it measures the value of
RSI relative to its high/low range over a set number of periods.
When RSI records a new low for the set period, StochRSI will be
at 0. When RSI records a new high for the set period, StochRSI will
be at 100.
Stop order - Also called stop-loss order, this order offers
protection or advantage from a market reversal. The principal offers
to buy or sell after a designated price is reached (stop point).
Stop-loss order - This is used to set a maximum loss target
without having to forgo favourable price trends.
SUP (Support) - Graphic threshold setting the theoretical
limit to a price fall for a security or market. It therefore represents
a target for which operators, not expecting a greater fall, will
decide to purchase a security.
Symbol (or ticker symbol) - A system of letters used to
uniquely identify a stock or mutual fund. Symbols with up to three
letters are used for stocks which are listed and trade on an exchange.
Technical analysis - All models based on the graphic and mathematical
interpretation (moving average, for example) used to anticipate trends
on the financial markets.
Trailing stop order - The stop order follows the market price
up (long) or down (short) and stays put when the market price moves
against the trader. The Distance to Market ('Dist.') as well as the
increments the order moves in ('Step') are defined by the trader.
The distance to market and step size are in the currency of the CFD.
Ultimate Oscillator - An oscillator that attempts to combine
information for several different time periods into one number. Three
different time periods are used, typically a 7-day period, a 14-day
period, and a 28-day period. The resulting oscillator is "bounded"
in that it moves between 0 and 100 with 50 as the center line. 70
and 30 are used as overbought/oversold levels.
Volatility - Volatility measures the price variation for assets
over a given period of time, expressed as a percentage.
Volume (or trading volume) - The number of shares, bonds or
contracts traded during a given period, for a security or an entire
exchange.
Volume Price Trend - A technical indicator consisting of a
cumulative volume line that adds or subtracts a multiple of the percentage
change in share price trend and current volume, depending upon their
upward or downward movements. This is used to determine the balance
between a stock's demand and supply. The percentage change in the
share price trend denotes the relative supply or demand of a particular
security, while volume indicates the actual size of the forces.
Weighted Average - A moving average that uses a selected
time span, but gives greater weight to the more recent price data.
Williams %R - Developed by Larry Williams, Williams %R is
a momentum indicator much like the Stochastic Oscillator and is
especially popular for measuring overbought and oversold levels.
The scale ranges from 0 to -100 with readings from 0 to -20 considered
overbought, and readings from -80 to -100 considered oversold. Typically,
Williams %R is calculated using 14 periods and can be used on intraday,
daily, weekly or monthly data.
Yield - This should not be confused with profitability, as
it refers to the level of the dividend divided by the share price.
Zig Zag - The Zig Zag (Basic) overlay is a collection of straight
lines that connect significant tops and bottoms on a price graph.
It takes a single parameter that specifies the percentage that the
price must move in order for a new "zig" or "zag"
to appear. Zig Zig does not predict trends and should not be used
on its own.
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