Glossary

Use this glossary to understand some of the terms you will come across at this site, or other sites about stock trading and technical analysis.

If there is a related word that you can't find a definition for at this site, drop me an email and I will add it to the glossary.  Just use the contact page.

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[ A B C D E F G H I J K L M N O P Q R S T U V W X Y Z ]

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Bar chart
Bear market
Bid
Breakeven
Breakout
Broker
Bull market
Buy stop order

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Ask - the price you can expect to buy at when using a market order

Arbitrage

At-the-money - an option those strike price matches the underlying current price

Bar chart - stock chart that shows a vertical line representing the price range, typically includes ticks to represent the open and close

Bear market - a market characterized by prices that generally fall

Bid - the price you expect to sell at when using a market order

Breakeven - when the price is equal to a level that covers the expense of entering and exiting a trade

Breakout - when a stock trades above or below a significant high or low price

Broker - an agent who executes buy or sell orders for customers

Bull market - a market characterized by prices that generally rise

Buy stop order - an order to buy that is contingent on prices rising above a certain price before being executed

Call option - the right, but not the obligation, to buy a stock at a certain price sometime in the future

Candlestick chart - Japanese stock chart that represents price action with a real body for the open and close and wicks, or tails, for the high and low

Chart - graphical representation of price action

Close - last trading price for the market session

Day order - order that either is filled or expires by the end of the day trading session

Day trading - trading that typically involves opening and closing a position within one trading day

DIA - ticker symbol for the AMEX Diamonds

Divergence - a difference in indicators

Downtrend - a series of lower lows and lower highs

Elliott Wave - method of analyzing the stock market in waves of threes and twos

Exchange - an association that participate in the business of buying and selling stocks

Fibonacci - for the stock market, a method of measuring potential support and resistance levels

Fill or Kill - an order that is filled almost immediately or canceled if not filled immediately

Floor trader - exchange members who trade on the floor, typically for themselves or as a member of a financial institution

Gap - a skip or jump in a trading range.

Good-Till-Cancel - an order that is open until either a certain price is reached or canceled

Hedge - a transfer of risk that typically involves offsetting a position with either the purchase or sale of options

High - highest price that occurs for a trading period

Index - a specialized average that represents a group of stocks

Interest rate - rate at which funds are usually borrowed or lended

Level II - in depth representation of bids and offers

Leverage - the ability to control a larger amount of money with a smaller amount

Limit order - an order that is only filled a specified price, or better

Line chart - stock chart that plots a line from closing price to closing price

Liquidity - a market that allows for easy entry and exit of a position due to the large amount of volume

Low - lowest price that occurs for a trading period

Margin - effectively borrowed money

Margin call - when a broker requires that you put up more money for the open positions that you have in your account

Market order - an order to enter or exit a position at the current price

Money management - controlling the amount of money at risk

Moving average - a lagging indicator of price action that replaces the oldest price with the most recent price

Offer - price at which you can expect to pay for taking a long position

Online trading - trading through a broker, typically on the internet, that requires no interaction with a human broker

Open - first price of the trading period

Point and figure chart - stock chart that represents price with X's and O's, does not account for time like a typical bar chart does

Position - what stocks you are either long or short in your account

Pullback - when stocks prices temporarily give back recent gains or losses

QQQ - AMEX tracking stock for the Nasdaq 100 index

Rally - when prices rise

Range - difference between the high and low price of a trading period

Resistance - a price level where rising prices can be expected to stop or turn back down

Retracement - when a stock gives back recent gains before rising again or when just the opposite when falling

Short - selling a stock that you don't own

SPY - AMEX tracking stock that represents the S&P 500

Stochastic - oscillator indicator typically associated with George Lane as the inventor

Stop order - order to buy or sell that is executed once a certain price is exceeded

Support - a price level where falling prices can be expected to stop or turn back up

Swing trading - trading that typically looks to enter at the first sign of a change in direction

Trading range - when a stock stays within a smaller than normal price area

Trading software - software designed specifically to help traders either by providing quotes, charts or the ability to place orders

Trading times - when the markets are open and closed

Technical analysis - uses charts to examine changes in price patterns with the anticipation that price action leads fundamentals

Trendlines - straight line that connects signficant highs or lows

Volatility - increase in price activity