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Friday, March 29, 2024
Knowledge BaseGlossary

Glossary

Algorithmic Trading can be a complex subject. Keep your knowledge current with this glossary of key concepts, terminology, and technical indicators.

Price Rate Of Change - ROC

Price Rate Of Change - ROC

Price Rate Of Change - ROC

A technical indicator that measures the percentage change between the most recent price and the price "n" periods in the past.

Print

Print

The execution of a trade. The term print originates from the ticker tape where trades would be listed, or printed, as they were executed.

Put-Call Ratio

Put-Call Ratio

A ratio of the trading volume of put options to call options. The put-call ratio has long been viewed as an indicator of investor sentiment in the markets. Times where the number of traded call options outpaces the number of traded put options would signal a bullish sentiment, and vice versa.

Qstick Indicator

Qstick Indicator

A technical indicator developed by Tushar Chande to numerically identify trends in candlestick charting. It is calculated by taking an 'n' period moving average of the difference between the open and closing prices. A Qstick value greater than zero means that the majority of the last 'n' days have been up, indicating that buying pressure has been increasing.

Range-Bound Trading

Range-Bound Trading

A trading strategy that identifies stocks trading in channels. By finding major support and resistance levels with technical analysis, a trend trader buys stocks at the lower level of support (bottom of the channel) and sells them near resistance (top of the channel).

Real Body

Real Body

In candlestick charting this is the wide part of a candle that represents the range between the opening and the closing prices over a specific time period.

Rectangles

Rectangles

A technical trading pattern in which a security's value ranges between two horizontal price points, creating a rectangle on a trader's screen. Rectangles occur in situations where a security is consistently bought up, when a lower price value is established, and sold down, when an upper value is similarly established. These price values remain "hard" values for a definite period, which is what creates the rectangular pattern.

Red Candlestick

Red Candlestick

Red Candlestick

The component of a candlestick chart that represents a downward movement in the underlying price. A red candlestick is composed of the period's high, low, opening and closing prices. If the closing price is lower than the day's opening price, then the body of the candle is red or black.

Relative Strength Index - RSI

Relative Strength Index - RSI

Relative Strength Index - RSI

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset.

Relative Vigor Index - RVI

Relative Vigor Index - RVI

Relative Vigor Index - RVI

An indicator used in technical analysis that measures the conviction of a recent price action and the likelihood that it will continue. The RVI compares the positioning of a security's closing price relative to its price range, and the result is smoothed by calculating an exponential moving average of the values.

Retracement

Retracement

Retracement

A temporary reversal in the direction of a stock's price that goes against the prevailing trend. A retracement does not signify a change in the larger trend. On a chart where a stock's price is generally headed upward, retracements are the small dips in price that the stock experiences during its overall upward trend. Whether an investor identifies a change in a stock's direction as a retracement or a reversal will impact how he responds to it.

Return On Risk-Adjusted Capital - RORAC

Return On Risk-Adjusted Capital - RORAC

Return On Risk-Adjusted Capital - RORAC

A rate of return used in financial analysis, whereby riskier projects and investments are evaluated based on the capital at risk. RORAC makes it easier to compare and contrast projects with different risk profiles.
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TRADING FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS
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