EClubTrading jargon


  • 52week low/high – the highest and lowest value of a stock during the

    past year. They represent also important support and resistance levels

  • Accumulation – a longer period of time (usually a few months) of sideways trading during which long term investors participate in the hope of a breakout
  • After-market – the few hours after the market closes when most companies announce earnings report
  • Bear flag – The opposite of the bull flag. After a down day, the next few seasions the stock is unable to get above more than 50% of the loss. If it continues for a few days, it opens the possibility for a move much lower
  • Breakaway – a move by a stock above its moving averages or above a downtrend, or important prior resistance
  • Bull flag – A positive pattern for stocks. After a string session, the following 2-3 session the price of the stock is trading in a tight range of the day 1 candle. This leads in most cases to a breakout move soon
  • Buyback – the possibility of companies of buying some of their stock from the open market. This helps drive prices higher
  • Channel- a long period of time during which the stock price has not moved significantly with every attempt at a new all time high being sold and every attempt to break down being bought
  • Day1 – a strong uptrend day, during which the stock’s price manages to reclaim its moving averages and passes above prior resistances
  • Dividend – an amount paid by a company usually on quarterly level to shareholders
  • Downtrend – a series of usually 4-5 sessions in which the underlying stock has moved in a downward direction
  • Downtrend reversal – after 3-4 down days, a stock’s price opens higher, trades below the prior low and then manages to reclaim it. At this point one can be long versus today’s low. It is usually very powerful as shorts are caught and have to cover
  • Earnings gap – a gap on a chart created either upwards or downwards after an earnings report. The longer the stock trades above or below that gap the higher the probability that will be the trend for the forseeable future
  • Earnings report- quarterly report presented by all companies which shows past peformance as well as outlook. We do not trade stocks into such events as the reaction is measured in most cases by expectations and not actual numbers
  • Faang tech stocks – Facebook, Apple, Alphabet(google), Netflix, Amazon
  • Fade/hedge/cover – To fade means to short a stock or index believing that it will drop. To hedge against means protecting your long exposure by shorting the overall index of the market. To cover means to buy in order to complete a short sell
  • Follow through – when a downtrend or uptrend is confirmed by the action
  • Futures – a benchmark of the movement of main indices. It is generally useful to watch it in pre-market to anticipate how the day will unfold. Useful to watch Asia and Europe markets as well
  • Gap down – occurs when the indices open much lower than they closed the previous session, creating a gap on the chart between the closing and opening proce
  • Gap up – occurs when the indices open much higher than they closed the previous session, creating a gap on the chart between the closing and opening price
  • H-type sell signal – a technical setup. After a big day down, the reversal the next day is not strong enough to recoup at least half the losses. In most casses this leads to another gap down the 3rd day
  • Indices/importance – spy for overall market, qqq for tech, iwm for small caps, xlf for financials, jets for airlines
  • Lagging – a stock that is trading worse than its peers
  • Long/short/trim – going long means buying the underlying stock or option. Short is the opposite, selling. To trim it means to reduce your position, usually by 1/3
  • Low of the day – the lowest price of the share during one day of trading
  • Meme/reddit/wallstreetbets – stocks- 2020/21 trading craziness. Lots of names but the most talked about was GameStop
  • MOC – market on close- the amount of money that needs to be invested or sold in the last 15 minutes of trading
  • Momentum stocks – stocks trading with a high volume in the right sector during that period. Tech has been a momentum sector in 2020
  • Monthly flows – every 1st of the month insititutions and pension funds invest and rotate money into the stock exchanges
  • Moving averages – we look at the 8,21,50,100 and 200 EMA. They represent the momentum of the stock relative to its movement in the selected period. A strong uptrend is one above the 8/21. For longer term investors holding the 200 day is very important. Importance of 8/21 shows the momentum of the stock. If it trades above it, all dips are buyable, while trading below it, most bounces cand be faded or sold.
  • Options – calls/puts/risks/spreads. A way of profiting from a price movement in a stock. If one thinks that the stock can go up from these levels but does not want to trade it actively, call options are the easisest and cheapest way. Buying puts means that the investor is betting that the underlying stock will enter a downtrend. Both types of options carry significantly higher risks than trading stocks, but the profits are bigger too. In general when you buy a call, put or spread take into account the possibility that the market may not acknowledge your thesis in time and therefore you might lose the investment by expiration
  • Options expiration – the day by which the options bought or sold expire. They occur every Friday, the 3rd one of the months being the most important
  • Overnight – holding a stock after the market closes until the next day
  • Oversold/overbought – a condition of the overall market when after multiple down days or up days it becomes either oversold or overbought. Expect bounces in both directions
  • P/E the ratio – ration of a stock betwen its price and its earnings. The lower the p/e the more value the company has. Momentum stocks trade at a higher p/e as expectations are bigger, and profits are not important at this stage
  • Pivot point – a daily area at which the stocks usually hoover around. In most days the pivot is either resistance (downtrend) or support (uptrend)
  • Pre-market – the first 5 hours before the market opens during which you can trade but the volume is lower
  • Price discovery – the first 15-30 minutes after the market opens. Important for sentiment and you get to know the first highs and lows of the sessions
  • Rally – a strong sequence of higher highs and higher lows usually lasting for a few days/weeks. The more the price diverges from its moving averages the higher the probability it is approaching its end and reversal
  • Relative strength/weakness – a measurement of a stock with regards to its peers and its sector. For example how is apple trading versus microsoft versus the qqq etf
  • Re-opening stocks – after the pandemic, airlines, cruise lines, hotels, tourism and other similar stocks can be classified as re-opening stocks
  • Resistance – after a pullback previous support which was broken becomes resistance. This can occur also at all time highs, where stocks tend to pullback from at the first attempt
  • Stay-at-home stocks – the big winners of the 2020 pandemic- zoom, netflix amazon, docusign, tesla, most growth stocks
  • Stop loss – the amount at which you wish to exit a position if it is working against you
  • Support – the level at which a stock has been before and from which it can bounce higher
  • Tlt long term treasury bond fund – Its movement affects growth stocks in particular. It is a gauge of interest rates and inflation
  • Uptrend – a series of usually 4-5 session in which the underlying stock has moved in an upward direction
  • Uptrend reversal – after 3-4 sessions up, a stock’s price opens higher and the then reverses below yesterday’s low never to reclaim during that day. One can either exit or reduce investment at this inflection point
  • Value stocks – stocks trading with a very low p/e in most cases under 10. Generally do not expect big moves in either direction
  • VIX – a gauge of volatility in the market. A reading below 20 entices investors to assume more risk and viceversa
  • Volume – the amount of shared traded during a session. The higher the volume on uptrends or downtrends, the bigger the move in the stock for that period
  • Welnness stocks cannabis stocks and etf such as tlry, vff, apha, msos, mj
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