The general direction of a market or of the price of an asset. Trends can vary in length from short, to intermediate, to long term. If you can identify a trend, it can be highly profitable, because you will be able to trade with the trend. As a general strategy, it is best to trade with trends, meaning that if the general trend of the market is headed up, you should be very cautious about taking any positions that rely on the trend going in the opposite direction.A trend can also apply to interest rates, yields, equities and any other market which is characterized by a long-term movement in price or volume.
A technical indicator invented by Larry Williams that uses the weighted average of three different time periods to reduce the volatility and false transaction signals that are associated with many other indicators that mainly rely on a single time period. This is a range-bound indicator, which means the value fluctuates between 0 and 100. Similar to the RSI, levels below 30 are deemed to be oversold, and levels above 70 are deemed to be overbought. Transaction signals are derived by finding situations where the price is going in opposite directions than the indicator. once this divergence has been identified the trader will wait to confirm the transaction by using other technical indicators.
A metaphor for daily market activity that goes against the weekly market tide. An investor trading daily would measure the market waves, or the daily market trends, with various oscillators from the triple screen trading system. The ocean metaphors for market trends were coined by one of the markets first technical analysts, Robert Rhea.
An economic cycle of recession and recovery that resembles a "W" in charting. A W-shaped recovery represents the shape of the chart of certain economic measures such as employment, GDP, industrial output, etc. A W-shaped recovery involves a sharp decline in these metrics followed by a sharp rise back to the previous peak, followed again by a sharp decline and ending with another sharp rise. The middle section of the W can represent a significant bear market rally or a recovery that was stifled by an additional economic crisis. A W-shaped recovery generally characterizes a period of extreme volatility compared to other types of recoveries. There are countless other shapes a recession and recovery chart could take, including L-shaped, V-shaped, U-shaped and J-shaped. Each shape represents the general shape of the chart of economic metrics that gauge economic health.
A technical indicator consisting of a cumulative volume line that adds or subtracts a multiple of the percentage change in share price trend and current volume, depending upon their upward or downward movements. This indicator is used to determine the balance between a stock's demand and supply. The percentage change in the share price trend denotes the relative supply or demand of a particular security, while volume indicates the actual size of the forces.
A technical indicator used to identify price ranges and breakouts. The volatility ratio uses a true price range to determine a stock's true trading range and is able to identify situations where the price has moved out of this true range. The volatility ratio is typically signified with a primary line on a chart, apart from price bars. Although there is no hard-and-fast number used to determine when a breakout is probable, a volatility of 0.5 is most often used by technical traders.
The volume of a security that trades at a price higher than its previous price. A security that has a higher uptick than downtick volume over a specified period of time may indicate that it is starting to gain upward momentum.
The volume of advancing NYSE issues divided by the volume of declining NYSE issues. If the upside-downside ratio is greater than 1, it shows that there is more volume in stocks that are increasing in price than in stocks that are decreasing in price. The higher the ratio is, the more bullish the market.