I am going to list some terms that I will use when I talk about my retirement account strategy. I am attempting to write this guide for people at all levels of market knowledge so many of these terms will be very basic for advanced readers. The definitions come from
Investopedia.com.
DEFINITION of 'Index'
A statistical measure of change in an economy or a
securities market. In the case of financial markets, an index is an
imaginary portfolio of securities representing a particular market or a
portion of it. Each index has its own calculation methodology and is
usually expressed in terms of a change from a base value. Thus, the
percentage change is more important than the actual numeric value.
Stock and bond market indexes are used to construct index mutual
funds and exchange-traded funds (ETFs) whose portfolios mirror the
components of the index.
Read more:
Index Definition | Investopedia http://www.investopedia.com/terms/i/index.asp#ixzz3jfJ7gFMf
DEFINITION of 'Market Capitalization'
The total dollar market value of all of a company's
outstanding shares. Market capitalization is calculated by multiplying a
company's shares outstanding by the current market price of one share.
The investment community uses this figure to determine a company's size,
as opposed to sales or total asset figures.
Frequently referred to as "market cap."
DEFINITION of 'Candlestick'
A chart that displays the high, low, opening and closing
prices for a security for a single day. The wide part of the candlestick
is called the "real body" and tells investors whether the closing price
was higher or lower than the opening price (black/red if the stock
closed lower, white/green if the stock closed higher). The candlestick's
shadows show the day's high and lows and how they compare to the open
and close. A candlestick's shape varies based on the relationship
between the day's high, low, opening and closing prices.
DEFINITION of 'Moving Average - MA'
A widely used indicator in technical analysis that helps
smooth out price action by filtering out the “noise” from random price
fluctuations. A moving average (MA) is a trend-following or lagging
indicator because it is based on past prices. The two basic and commonly
used MAs are the simple moving average (SMA), which is the simple
average of a security over a defined number of time periods, and the
exponential moving average (EMA), which gives bigger weight to more
recent prices. The most common applications of MAs are to identify the
trend direction and to determine support and resistance levels. While
MAs are useful enough on their own, they also form the basis for other
indicators such as the Moving Average Convergence Divergence (MACD).
DEFINITION of 'Exponential Moving Average - EMA'
A type of moving average that is similar to a simple
moving average, except that more weight is given to the latest data. The
exponential moving average is also known as "exponentially weighted
moving average".
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