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Don’t start investing or trading in stock market without proper knowledge. In Indian stock market or in any stock market few standard terms are used with the relevance of technical analysis. Sharetipsinfo suggest investors or traders must read complete glossary to understand stock market better. Learn basics of stock market with our glossary.

 

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MACD (Moving Average Convergence/Divergence)

An indicator developed by Gerald Appel that is calculated by subtracting the 26-period exponential moving average of a given security from its 12-period exponential moving average . By comparing moving averages , MACD displays trend following characteristics, and by plotting the difference of the moving averages as an oscillator , MACD displays momentum characteristics .

MACD Histogram

A visual representation of the difference between the MACD line and the MACD signal line . The plot of this difference is presented as a histogram , making the centerline crossovers and divergences easily identifiable .

Market Capitalization

Also known as market cap , it is the total market value of a company (number of shares outstanding multiplied by the price of the stock) . A company with 1 million shares outstanding and a stock price of $10 would have a market capitalization of $10 million .

Market Order

An order to buy or sell a security at the prevailing market price . Sometimes referred to as “at the market”, these orders are usually filled immediately by the market maker . A sell order placed at the market will most likely be filled at the bid price and a buy order will be filled at the ask price .

Marubozu

A candlestick with no shadow extending from the body at either the open , the close or at both . The name means close-cropped or close-cut in Japanese, though other interpretations refer to it as bald or Shaven Head .

Momentum

A leading indicator measuring a security’s rate of change . The ongoing plot foirms an oscillator that moves above and below 100. Bullish and bearish interpretations are found by looking for divergences , centerline cross overs and extreme readings.

Money Flow Index (MFI)

A volume – weighted momentum indiactor that measures the strength of money flowing in and out of a security . It compares “positive money flow ” to “negative money flow ” to create an indicator that can be compared to price in order to identify the strength or weakness of a trend . The MFI is measured on a 0 – 100 scale and is often calculated using a 14 day period .

Morning Doji Star

A three day bulish reversal pattern that is very similar to the morning star . The first day is in a down trend with a long black body . The next day opens lower with a Doji that has a small trading range . The last day close above the midpoint of the first day .

Morning Star

A three day bullish reversal pattern consisting of three candlesicks -  a long –bodied  black candle that gapped down on the open , and a long-bodied white candle that gapped up on the open and closed above the midpoint of the body of the first day .

Moving Average (MA)

An average of data for a certain number of time periods . It “moves” because for each calculation , we use the latest x number of time periods data . By definition , a moving average lags the market . An exponentially smoothed moving average (EMA) gives greater weight to the more recent data, in attempt to reduce the lag.

Average Directional Index (ADX)

-DI is the line that measure the force of the down moves over a set period . The default setting is 14 periods

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