My company recently bought a brokerage firm. So, instead of dealing with basic consumer stuff like money market accounts, balloon mortgages, and such like, I now get to deal with this. (Source: optionetics.com.)
Hope you enjoy the pix as well. They're what you get when Google-image this stuff.
Abandoned Baby Pattern
A rare candlestick
pattern in which an upside gap doji star (where the shadows do not touch) is
followed by a downside gap black candlestick where the shadows also do not
touch; considered a major top reversal signal.
Arms Ease of Movement
Developed by Richard W. Arms, Jr., this analysis routine
expands on Mr. Arms' Equivolume charting tool by quantifying the shape aspects
of the plotted boxes. The purpose of this quantifying is to determine the ease,
or lack thereof, with which a particular issue is able to move in one direction
or another. The ease with which an issue moves is a product of a ratio between
the height (trading range) and width (volume) of the plotted box. In general, a
higher ratio results from a wider box and indicates difficulty of movement. A
lower ratio results from a narrower box and indicates easier movement. This
ratio is then related to a comparison between today's and yesterday's
trading-range midpoint values to determine the ease of movement value (EMV). A
moving average is then applied to the EMV value-the moving average period can
be varied in order to make the EMV flexible as a trading tool.
Bandpass Filter
An oscillator that accentuates only the frequencies in an
intermediate range and rejects high and low frequencies. Implemented by first
applying a low pass filter to the data and then a high pass filter to the
resulting data (e.g., two SMA crossover system).
Bollinger Bands
Bollinger bands plot trading bands above and below a simple
moving average. The standard deviation of closing prices for a period equal to
the moving average employed is used to determine the bandwidth. This causes the
bands to tighten in quiet markets and loosen in volatile markets. The bands can
be used to determine overbought and oversold levels, locate reversal areas,
project targets for market moves, and determine appropriate stop levels. The
bands are used in conjunction with indicators such as RSI, MACD histogram, CCI
and Rate of Change. Divergences between Bollinger bands and other indicators
show potential action points. As a general guideline, look for buying
opportunities when prices are in the lower band, and selling opportunities when
the price activity is in the upper band.
Bollinger Station is a rockin', fun band!
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Box-Jenkins Linear Least Squares
The additive structure of Box-Jenkins models with a
polynomial structure. Box-Jenkins Method From G.E.P. Box and G.M. Jenkins, who
authored Time Series Analysis: Forecasting and Control. The method refers to
the use of autoregressive integrated moving averages (ARIMA), which fit
seasonal models and nonseasonal models to a time series.
Chaikin Oscillator
The Chaikin Oscillator is created by subtracting a 10-period
exponential moving average of the Accumulation/Distribution line from a
3-period moving average of the Accumulation/Distribution Line.
Crack Spreads
The spread between crude oil and its products: heating oil
and unleaded gasoline plays a major role in the trading process.
Cross on the Board
When an investment dealer has both an order to sell and an
order to buy the same stock at the same price, the transaction is allowed
without interfering with the limits of the prevailing market.
Cutler's RSI
Cutler's RSI is a slight variation of Welles Wilder's
original Relative Strength Index. The RSI is a momentum oscillator used to
identify overbought and oversold conditions by keying on specific levels,
generally 30 and 70, on a chart scaled from 0 to 100. The study can also be
used to detect the following:^1. Movement that might not be as readily apparent
on the bar chart^2. Failure swings above 70 or below 30, which indicate
reversals. Support and resistance. Divergences between RSI and price
Double-Smoothed
A price series that has been smoothed by a mathematical
technique such as a moving average. This first series of smoothed price data is
then smoothed a second time.
Fast Fourier Transform
A method by which to decompose data into a sum of sinusoids
of varying cycle length, with each cycle being a fraction of a common
fundamental cycle length.
Gann Square
The Gann Square is a mathematical system for finding support
and resistance based upon a commodity or stock's extreme low or high price for
a given period. Attainment of a particular price level in a square tells you
the next probable price peak or valley of future movement. The probable price
levels tend to be more reliable if they are extrapolated from Gann Square
values along one of the major axes of the Gann Square. The Gann Square is
generated from a central value, normally an all-time or cyclical high or low.
If a low is used, the numbers are incremented by a constant amount to generate
the Gann Square. If a high is used, the numbers are decremented during the
square generation.
Gray Knight
A term used to describe an acquiring company that outbids a
white knight. Since the acquiring company is not unfriendly, management of the
target company considers it better that the white knight be outbid by a gray
knight than that the white knight be outbid by a hostile company or raider.
Guts
A strangle where the call and the put are in-the-money.
Harami
In candlestick terminology, a small real body contained
within a relatively long real body.
Iron Butterfly
The combination of a long (short) straddle and a short
(long) strangle. All options must have the same underlying and have the same
expiration.
Irregular Flat
A type of Elliott wave correction that has a 3-3-5 wave
pattern, where the B wave terminates beyond the start of wave A. A
"flat" is in progress, implying that a larger pattern is developing.
It will contain waves of one higher degree than the A-B-C waves just completed.
Descriptive measure of how flat or pointed a distribution
is.
Leg Out
In rolling forward in futures, a method that would result in
liquidating a position.
Ljung-Box Statistic
A chi-square test of significance of higher order
correlation existence. The marginal significance level is the probability that
a no more higher order correlation exists.
Naked Writer
A seller or writer who has sold stock or a stock option
contract for stock that he or she does not own. Also referred to as a naked
writer.
Norton High/Low Indicator
The Norton High/Low indicator uses results from the Demand
Index and the Stochastic study and is designed to pick tops and bottoms on
long-term price charts. Two lines are generated: the NLP line and the NHP line.
The system also uses level lines at -2 and -3. The NLP line crossing -3 to the
downside is the signal that a new bottom will occur in 4-6 periods, using
daily, weekly, or monthly data. Similarly, the NHP line crossing -3 to the
downside indicates a new top in the same time frame. The indicator tends to be
more reliable using longer-term data (weekly or monthly). When either indicator
drops below the -3 level, a reversal may be imminent. The reversal (or hook) is
the signal to enter the market. For greater reliability, use the Norton
High/Low Indicator together with other studies for confirmation.
Piggy Back Warrants
Some warrants entitle the holder to acquire shares plus
additional warrants at a later date. The warrants that are received upon the
exercise of the initial warrants are known as piggyback warrants.
Running Stops
Something which when quoted, floor traders use to move the
market. When stops are bunched together, traders may move the market in order
to activate stop orders and propel the market further.
Schwarz-a-tron
A dedicated computer system for options calculations and
simulations.
Schwarz und Weiß mit Neonlämpchen
Shaved Candlestick
In candlestick charting, when the shadows of a candle which
mark the area between the real body and the extremes and give the appearance of
being wicks are absent.
Spline
The linear interpolation between two adjacent points on a
curve.
Stochastic Indicator
The Stochastic Indicator is based on the observation that as
prices increase, closing prices tend to accumulate ever closer to the highs for
the period. Conversely, as prices decrease, closing prices tend to accumulate
ever closer to the lows for the period. Trading decisions are made with respect
to divergence between % of "D" (one of the two lines generated by the
study) and the item's price. For example, when a commodity or stock makes a
high, reacts, and subsequently moves to a higher high while corresponding peaks
on the % of "D" line make a high and then a lower high, a bearish
divergence is indicated. When a commodity or stock has established a new low,
reacts, and moves to a lower low while the corresponding low points on the % of
"D" line make a low and then a higher low, a bullish divergence is
indicated. Traders act upon this divergence when the other line generated by
the study (K) crosses on the right-hand side of the peak of the % of
"D" line in the case of a top, or on the right-hand side of the low
point of the % of "D" line in the case of a bottom. Two variations of
the Stochastic Indicator are in use: Regular and Slow. When the Regular plot of
the Stochastic too choppy, the "Slow" version can often clarify the
Stochastics.
Strange Attractor
A balance point between a set of conflicting forces.
Synthetic Straddle
Futures and options combined to create a delta neutral
trade.
Telegrapher's Equation
A variation of the diffusion equation that describes minor
differences in the drunkard's walk, in which the random decision controls the
change in direction rather than the direction itself.
Weak Hands
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