Technical analysis Terminology

The term “technical analysis terminology” refers to the study of price behavior by
historical data. Trader and analyst uses many chart patterns,Trendlines, Indicators
and moving average in technical analysis to identify pattern and trend in the
market. In technical analysis the time period is also a key point because technical
analysis performs for a short period.

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A to Z Trading Jargons of Technical Analysis
(In Own Understanding way)
● Activity Level: Activity level is the major zone where prices do major
movement in historical data.
● Arbitrage: Arbitrage is when traders buy an asset in Market A and Sell this
asset to market B to make Profit by price difference.
● Average Loss/Profit: To determine how the strategy was working we
calculate the average loss and profit divide by the number of trades taken.
● Back Testing: Back testing is the Process where we Put our specific strategy
to Check Its working or not uses of Historical Data.
● Bear/Bull Market: Bull Market is where Price goes above and above Means
buyers are aggressively buying. And sellers are not active. Bear market Price
is going down for a longer period and sellers are active and buyers are not
interested in Buying assets in this Market condition.
● Bear/Bull Trap: Bear trap is like where Price action showing Market or Stock
price goes down but in Reality It's going up to trap investor and trader Bull
Trap same as for Upside Move.
● Beta: Beta refers to Stock volatility or movement compared to market
● Breakdown: Breakdown is where price breaks an important support zone
and is ready to go down. We can say higher sellers are active and less buyer
active who can not hold the price at the moment.
● Breakout: Breakout is where price breaks an important resistance zone and
is ready to go up movement. We can also say less sellers are active or higher
buyers are active.
● Call: It's an Option contract that gives the owner to buy securities of asset
by paying premium in underlying assets of specific strike price
predetermined expiry date.
● Candlestick: The most used chart type where every asset’s price is shown in
the form of a candlestick.
● Charting: Charting is the visual representation of the data of assets such as
Presentation in many ways .

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● CMP: Current Market Price is the price of an asset to buy for one that time.
● Consolidation: When price is stuck in a crucial support and resistance zone
for a period of time.
● Correction: A correction is a short reversal of trends.For uptrend move price
goes down and downtrend move price goes up for a short time.
● Divergence: It's an indicator showing When the Price is moving in the
opposite direction to the Technical indicator.
● Dow: Dow Jones Industrial Average is a US stocks Index which shows
American 30 Blue chip Stock.
● Dow Theory: The Dow theory is one of the most important theories in the
stock markets according to which the market moves in three major trends:
Primary, Secondary, and a Minor trend.
● Downtrend: Where the market is continuously making lower low and lower
high for a period of time.
● Elliott Wave Theory: Elliott Wave theory says Market repeats his move after
a period of time so analysis of historical data we can predict the move.
● Entry: Which price trader buys an asset is an entry point.
● Exit: Exit price is where the trader cuts the trade or sells the asset on this
price.
● Expiry: In Derivative segment traders buy contracts of future and option for
a specific time period.Expiry is the last date of the contract after that
contract closes automatically.
● Fibonacci ratios: Fibonacci ratios are a technical tool which shows possible
levels of a stock to predict future prices.help of fibonacci we can predict
support and resistance and also correction move.
● Float: Companies share who are available for public to trade called as float.
In india minimum 25% of the whole share for the Public to trade
● Gap-Up: A gap up is when the market opens up after the previous day
close.
● Gap-Down: A gap down is when the market opens low after the Previous
day closes.

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● Going Long: Going long or taking a long position means buyers think the
price will go up in future.
● Going Short: Going short means traders sell the asset and buy when price
goes down. That means traders showing bearish view on market
● Index: Index are included stock according to the sector,
performance,country to determine the overall trend of market and sector.
● Insider trading: when a trader got some tips from a company's top
employee and made a decision to buy an asset is insider trading. Insider
trading is illegal in India.
● Line Chart: line chart shows price in line form joint of previous close and
currently movement of price.
● Liquidity: Liquidity refers to how fast and easily the buyers/sellers can enter
into/exit from the market or how easily an asset is available for traders.
● Margin: In some trades, such as Intraday, a trader need not pay the full
amount of asset brokers provide some margin to trade.
● Market Cap: market capitalization is the value of a company in the current
market. Its calculated by no. of share outstanding * Current market price of
company share.
● Nasdaq: Nasdaq is an american stock exchange.
● Noise: uncertainty in price movement of price fluctuation we can say noise.
● Pullback: when the price breaks the support and resistance zone and goes
ahead. Again come to price and touch the zone thats a pullback
● Put: Put is an option contract that provides to sell the underlying asset on
specific strike price predetermined expiry.
● Relative Performance: Relative performance means an asset performs
according to segment and market.
● Resistance: Resistance is a zone where sellers are active and buyers not
interested. Resistance zone stops when the price goes up.
● Retracement: This is a temporary fall/rise in a market against the prevailing
trend and does not affect the larger trend.
● S&P 500: This is one of the most famous indices in the financial world which
measures the performance of the top 500 companies listed in the US.

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 ● Short Selling: Short selling refers to the process of borrowing stocks to sell
them and buy them back at lower prices to gain from the price difference.
● Slippage: Slippage refers to the difference between estimated costs of
transacting and the actual cost incurred.
● Stop-loss order: Stop loss order means when the trade goes against the
strategy trader calculates the how much loss he can take and placed order
to sell at this price if trade is not as per plan.
● Support: Support is a level where buyers are active on this price not giving
price down to this level.
● Technical Analysis: Technical analysis is the study of price behavior and
price movement .Uses chart, trendline, indicator, moving average for
technical analysis.
● Trend: Trend is the direction in which the price of a security is moving.Three
type of trend Uptrend, Downtrend and sideways
● Trendline- Trendline is the line drawn on price movement to identify trends.
● Volatility: Volatility is how prices are changing in a given time. If the price
changes too much in too little time, the stock is considered highly volatile.
● Yield: Yield refers to the % of return an investor earns on their
investment.From Stock, Bond and Fixed deposit

Conclusion

In conclusion, understanding technical analysis terminology is essential for traders

and investors aiming to navigate the financial markets effectively. Key concepts
such as support and resistance, trends, indicators, and chart patterns provide
valuable insights into market behavior. Mastering these terms allows market
participants to make informed decisions, manage risk, and develop strategies
tailored to their trading styles. As markets evolve, continuing to learn and adapt
these concepts will enhance one’s analytical skills and potentially lead to more
successful trading outcomes.