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Igor

Market Wizard
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Everything posted by Igor

  1. It is used by investors to ascertain whether a manager’s decisions are yielding satisfactory gains.
  2. It is considered a bullish chart pattern and is traded on the basis of a bullish breakout of the horizontal trend line.
  3. Analysts consider this to be a strong buy signal.
  4. An ascending channel is seen in an uptrend and the trading strategy is to buy at the bounce on the lower trend line.
  5. This is a subjective order screening technique that investors can set on their own to avoid buying or selling at minor changes in price, or to only enter positions when a certain level of percentage change in price has been achieved.
  6. The Aroon Indicator is made up of an Aroon Up and Aroon Down components. Values closer to 100 indicates a strong trend while values close to zero show a weak trend. If the value of Aroon Up is lower than Aroon Down, this shows a weak uptrend and vice versa.
  7. A TRIN value above one is a bullish signal, less than one is a bearish signal while a TRIN value with a unit value of one is a sign of a balanced market. The Arms Index is named after Richard Arms.
  8. It is not a very good indicator as it can be overly affected by extremes in either direction.
  9. The lines of the indicator look like a handle with prongs, hence the name pitchfork.
  10. Amplitude is positive when calculating a bullish retracement, and negative when calculating a bearish retracement.
  11. Advances and Declines form an integral part of analytic tools like the advance-decline ratio and advance-decline index.
  12. It is used by most traders to confirm the strength of a trend and the possibility of its reversal.
  13. It is a good indicator of market movements.
  14. It helps day traders to profit in unstable markets by signaling price movements.
  15. It is commonly used to confirm trend-line breakouts on price charts.
  16. It is used to determine the situations wherein the price is moving in an opposite direction to the indicator itself.
  17. The logical trading strategy for an asset which has reached its accumulation area is to buy the asset. Traders therefore watch out for areas where the asset shows accumulation so as to enter long positions at these points.
  18. It is normally calculated using the NYSE.
  19. This options greek is used to determine how closely an options contract tracks its underlying market, hence is useful for traders who want to track gamma hedged trades.
  20. Options and commodities are examples of assets where the zero sum game principle is seen. This means that profits made are paid for by losses of counterparties to the profitable trade.
  21. This is used to setup several options trades simultaneously so that the premiums from the net credit trades cancel out the premiums paid on the net debit trades, thus allowing profits to be strictly determined by the asset performance.
  22. Purchasing a put and selling a call at a lower strike price is an example of a zero cost collar trade.
  23. The principle of trading debt instruments as options is based on the whether the interest payable on that instrument is above or below the strike price of the trade. Money is made when a call option holder on a yield-based option holds an options position which ends in the interest being higher than the strike, or when a put option holder holds a position which ends with the interest being lower than the strike price of the asset.
  24. Selling an option involves shorting an options contract, especially when there is a negative view on the asset to be traded.
  25. Anyone who sells an options contract or goes short on an options contract is an options writer.
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