Primarily intended to guide the reader to understanding technical analysis of the stock market in order to make educated predictions of future stock prices and thereby trade profitably.

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Tom Supergan
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Joined: Wed, Jul 04 2007 12:16 pm
Location: Tampa Bay Area, Florida


Post by Tom Supergan » Thu, Jun 18 2009 2:53 pm

Most subjects have their own unique jargon that must be mastered in order to get the correct meaning when used. There is also a category of terms that should be avoided as they are inaccurate ("choppy"), only apply to certain positions ("good," "bad"), or are generally misleading used to evoke emotions ("bubble").

  • Bear
    Prices in down trend.
  • Bull
    Prices in up trend.
  • Closing a position
    Selling a stock owned, or buying a stock earlier sold short
  • dMA
    days Moving Average. "50dMA" is the fifty day moving average.
  • Dow
    Short for Dow Jones Industrial Average. Thirty stocks are used to calculate the average, but they are not weighted equally. Exxon, Chevron and IBM make up 22% of the price instead of 10% if they were equally weighted. Similarly with the S&P500.
  • Down
    Stock price decreased (not necessarily bad--depends on position: if short, it's then more profit as price goes down).
  • EMA
    Exponential Moving Average. More recent prices have more weight in the average. This gives trend change signals earlier than SMA.
  • Long position
    Stock owned (see Short position).
  • Moving average
    There are many formulas for determining moving averages. The moving average line on a chart is compared to other measures on the chart to give the technical analyst indicators of price movement.
  • OHLC
    Open/High/Low/Close: Type of bar chart where each day's trading range is indicated by a vertical line with the top at the days' highest price, lowest price at the bottom, a small horizontal dash on the left for the opening price, and a small dash on the right of the vertical line at the closing price.
  • Option
    A contract to buy or sell a stock at a certain price by a certain date.
  • Position
    Stocks owned or sold short, plus accompanying options, or cash available to trade with. An "all cash" position is when you own no stock or have no short sales requiring future purchase.
  • Short position
    Selling a stock you don't own. Your broker must have the stock to sell. You get the proceeds from the sale, but you owe your broker the same number of shares sold.
  • SMA
    Simple Moving Average. Each day's price has equal weight in the average.
  • Stock
    Equity shares of ownership in a corporation.
    In this forum, we will be discussing common stocks publicly traded on U.S. exchanges.
  • Trading range
    Prices moving sideways between support and resistance levels.
  • Trend
    The general direction in the price range over a period of time. Higher highs and higher lows is an uptrend. Lower highs and lower lows is a downtrend. When the chart shows equal highs and lows, it's moving sideways in a trading range, or "range-bound."
  • Trendline
    A line drawn on a chart to show limits of resistance or support.
    A line drawn connecting three or more highs shows resistance.
    A line drawn connecting three or more lows shows support.
  • Up
    Stock price increased.
More in-depth glossary.
Tom Supergan
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