A trading term called a dead cat bounce is used to when a stock is in a severe decline and has a sharp bounce off the lows. It occurs due to the huge amount of short interest in the market. This bounce will be short lived and followed up by heavy selling which will break the prior price low.
A gap in a chart is basically an empty space between one trading period and the one prior to that trading period. They normally form on account of an important and material event that will affect security, like an earnings surprise or a merger agreement. Read this article to learn more!
Flags and Pennants are categorized as a continuous pattern. They normally represent only brief pauses in a dynamic stock. They’re typically seen immediately after a quick move. The stock will then take off again in the same direction. Click on this post for more information about Flags and Pennants.
The V top is a reverse V-shaped top, where the top is quite sharp. It’s due to the irrationality of actors leading to a steep increase that will be corrected shortly afterwards. Read this article to learn more!
The V Bottom is a sharp dip pattern due to irrationality of actors, which is corrected shortly after. Click on this article to learn more about what constitutes a V Bottom pattern.
A horizontal channel is a pattern that underlines investor’s indecisiveness. This horizontal channel is assembled by two horizontal and parallel lines that build the progress of the price. To confirm a line, there should be at least two points of contact with the price. The more contact points it will has, the more these will be durable and their breakout will give an substantial buy/sell signal.
The descending triangle is a bearish continuation pattern. This pattern forms two converging lines. The initial is a downward slant which resistance and the other is a horizontal support. To validate the descending triangle, there must be oscillation between the two lines. The lines must be touched at least twice for validation.
The symmetrical triangle top is a bullish continuation pattern. This pattern forms two trend lines which are symmetrical to the horizontal and convergent. Click on this post to learn more!
A symmetrical triangle bottom is a bearish continuation pattern. This pattern forms two trend lines that are symmetrical to the horizontal and convergent. Click on this post for more details.
The ascending triangle is a bullish continuation pattern. This pattern is made by two converging lines. The first line is an upward slant which is the support and the other is a horizontal resistance line.
The Cup and Saucer is a chart with a continuous pattern, formed by two rounded bottoms, the first is deeper and wider than the second. The height of the cup and the handle will be aligned along a straight horizontal resistance. This is the neckline of the pattern. Read this article to find out more!
A Rounding Top pattern is a reverse U-shape, also called a “reverse saucer. ” The top is rounded with a flat top. Read this post for further details and a visual representation of the pattern!
A Rounding Bottom, also known as a saucer, is a U-shaped bottom reversal pattern. The dip is rounded with a flat bottom. Click on this post for more information and a visual representation!
The pennant resembles the symmetrical triangle, but it’s characteristics are not the same. The pennants is shaped like a wedge of consolidation and normally appears after a sudden upward or downward movement.
The descending flag shows as a continuation pattern. The flag is built by two straight downward parallel lines which is shaped like a rectangle. It is oriented in the direction of that trend which it consolidates. Contrary to a bearish channel, this pattern is quite short term and shows the fact that buyers will need a break. Click on this post to learn more!
An ascending flag is a continuation pattern formed by two straight upward parallel lines which are shaped like a rectangle. It is adjusted in the direction of the trend that it consolidates.
A bullish channel is called a continuation trend pattern. The bullish channel is assembled by two parallel lines that frame the upward price trend. Click on this article to learn more!
A bearish channel is a continuation trend pattern arranged by two parallel lines that frame the downward price trend. Read this article to learn more!
Click on this post to read about the Triple Top, which is a bearish pattern with an MN shape.
Reverse head and shoulders is a trend reversal pattern that marks a desire to make a bullish reversal. The theory is the same as a triple bottom other than the second bottom will be lower than the others, which are technically at the same height. Click on this post for more information.
The double top is a bearish pattern shaped like an M. Two tops must succeed, imaging an important resistance. This marks a reversal. Read this article for more information.
A reversal pattern is called a diamond bottoms. This pattern is formulated by two juxtaposed symmetrical triangles and it is shaped like a diamond.
A falling wedge is a bullish reversal pattern made by two converging downward slants. To prove a falling wedge, there has to be oscillation between the two lines. Each of the lines must be touched at least twice for validation.
A Rising Wedge is a bearish reversal pattern formed by two assembled upward slants. Read this post to learn more.
The Adam & Eve top is a type of double top that consists of a spiking first top, followed by a rounded second one. Read this article to learn more!
The formation, ascending broadening wedge is called this because of its similarity to a rising wedge formation and then has a broadening price pattern. The ascending broadening wedge differs from a rising wedge as the axis rises. Read this article to learn more!
The right-angled and ascending broadening chart pattern is not one you might choose to trade. Other chart patterns perform much better. Downward breakouts have a big break even failure rate which may disqualify them from your trading tools. Upward breakouts have only a middling average rise, and that is if you trade them perfectly.
The broadening bottom is one of those chart patterns that appears often, but you might want to avoid trading. The performance rank approaches the bottom of the list with a comparatively high break even failure rank and low average rise in a bull market. Its only redeeming value is the partial decline which does an excellent job of predicting an upward breakout.
Charting Software is an analytical, computer-based tool used to help equity (stock) traders with trading analysis by charting the price stock price for various time periods along with various indicators. Equity charting software packages are used by many traders to determine the direction on any given stock price.
With ETFs, you can scaled down the size of the transaction for small investors.
Bear ETFs short stocks to achieve their goals. Bear ETFs show gains when the underlying stocks loose value. Bull ETFs use long positions and show gains when the underlying stocks show gains.
The DIA -DIAMONDS Trust, Series 1 ETF invest in a basket of Dow Jones Industrial Average stocks that will track the price and performance of the Dow Jones Industrial Average (DJIA) Index.
A Trailing Stop Loss is calculated in a manner like the way we calculated our initial stop loss, the difference being that while we calculated our stop loss from the entry price, we’re calculating our trailing stop loss from the highest price since entry.
Compound Interest is an extremely important concept in any level of finance. Compound interest can make an enormous difference in the return you get from your investments. As we know, simple interest is the act of earning interest on an investment.
Expiration types determine how long an order will stay open without filling. Your order type is very important for limit orders, but understanding them can also remove a lot of confusion for market orders.
Market Orders, Limit Orders, Stop Market Orders, Stop Limit Orders and Trailing Stop Orders! Each one is used differently to balance a trading strategy – usually so you can place your orders and wait for prices to match your conditions
Real-life and virtual trading hours for our site (all times Eastern). For example, the US and Canadian Markets open at 9:30 AM ET (GMT-6:00) and close at 4:00 PM ET. Monday to Friday, with exceptions on National Holidays.
Stock market prices are affected by business fundamentals, company and world events, human psychology, and much more. This article will further explain some of these contributing factors.
An order is an investor’s instructions to a broker or brokerage firm to purchase or sell a security. Orders are typically placed over the phone or online. Orders fall into different available types which allow investors to place restrictions on their orders affecting the price and time at which the order can be executed. Read this article for to learn more!
This term is generally used to refer to stocks with a price below $5. The name also comes from the fact that most penny stocks have either started or will end at $0.01 (a penny).
Asset Turnover Ratio is the amount of sales generated for every dollar’s worth of assets.
Day traders buy and sell the same stock (or other investment type) within a single trading day. Day trading has become a very popular way to make money, but it requires dedication and high volumes of cash.
A list of the 25 most popular (largest) mutual funds.
Mutual Fund screeners are available on countless websites and trading platforms. They allow users to choose trading instruments that are suitable for certain criteria profile.
Over the past decade, choosing Mutual Funds has been popular among American investors in order to save towards their retirement as well as other financial targets. Although Mutual Funds seem to have a lot of advantages like professional management and diversification, they, like any other invest, have some risks.
The possible choices for investing in a mutual fund is less complicated than you think. But how do you proceed or which one is the best for you based on your needs? Read this article to find out!
Mutual fund charges and costs are fees that may be acquired by investors who possess mutual funds. Managing a mutual fund involves costs, including investment advisory fees, shareholder transaction costs, and marketing and distribution charges. These funds are passed along as costs to investors in various ways. This article details types of mutual fund charges and costs, as well as load commissions.
The following strategies are used to trade ETFs.
A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
An open end mutual fund don’t have limits on the quantity of shares the fund will issue. Provided that demand is requested often, the fund will continue to issue shares no matter the number of investors.