by Henry Liverman | May 12, 2021 | Market Definitions
A very bearish technical reversal pattern. A double top occurs when a stock or asset reaches a high two consecutive times with a slight decline between the highs. Once the price falls below a support level equal to the low between the two highs, the bearish momentum...
by Henry Liverman | May 12, 2021 | Market Definitions
A chart pattern indicating a major bearish shift. A death cross occurs when a stock’s short-term moving average crosses below its long-term moving average. The death cross is also considered a long-term indicator, as the most common moving averages used to...
by Henry Liverman | May 11, 2021 | Market Definitions
A bullish trading signal where a security’s price chart shows an elongated “u” shape followed by a slight downward drift (forming a shape resembling a cup with a handle). Generally, cups with a longer “u” bottom provide a stronger signal...
by Henry Liverman | May 11, 2021 | Market Definitions
The addition of interest to the principal sum of a loan or deposit. Or, interest on your interest. This interest calculated on the initial principal also includes all of the accumulated interest from previous periods. Interest can be compounded on any schedule,...
by Henry Liverman | May 11, 2021 | Market Definitions
A shortened version of the colloquial term “don’t try to catch a falling knife.” When it comes to trading, this term translates to “wait for the price to hit a bottom before buying it.” There is no defined amount a stock must fall in...
by Henry Liverman | May 11, 2021 | Market Definitions
A tax on the profit made from selling assets (eg stocks, real estate, or other investments). The “capital gain” being taxed is the total price of the sale subtracted from the original cost of the asset. When the assets themselves have been sold, the...
by Henry Liverman | May 11, 2021 | Market Definitions
A trading pattern showing showing a rapid and substantial rise in price and volume preceding a rapid drop in price (ie, it produces a Λ shape). These patterns appear in all markets and is a very volatile trading pattern. It must be approached smartly, as a poorly...
by Henry Liverman | May 10, 2021 | Market Definitions
The opposite of an ascending wedge pattern. A descending wedge pattern is a bullish technical indicator. They typically begin wide at the top and constrict as prices continue to lower. This action forms a triangle shape as the reaction highs and lows converge. ...
by Henry Liverman | May 10, 2021 | Market Definitions
An extremely unpredictable event that produces potentially drastic effects on markets. Black swan events are characterized by their rarity, impact, and general belief “we should have seen it coming.” Examples of a black swan event are 9/11, the 2008...
by Henry Liverman | May 10, 2021 | Market Definitions
A lesser known potential bullish chart pattern made up of a sharp V-shaped bottom (the “Adam” bottom) and a second, longer-term cup-shaped bottom (the “Eve” bottom). This creates a double bottom pattern that eventually compresses into a tight...
