Friday, February 3rd 2012 - 06:06:23 pm

TradeStocksAmerica.com Glossary of Terms

Glossary of Terms
(Some abbreviations are for communication on the Trading Room)

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Tech stock - Stock in a technology sector, such as software, semiconductors, networking, and computers.

Technical Analysis – evaluates stocks and markets by using technical indicators such as buying and selling pressure, volume, moving averages, support, resistance levels, relative strength and pricing. There are many more technical studies that give some indication what a stock has been doing and forecasts could be made what a stock could possibly do in the future.

Ten-bagger - A stock which rises tenfold. A term first coined and used by Peter Lynch, a legendary mutual fund manager for Fidelity, primarily known as the manager of the Fidelity Magellan Fund in the late 1980’s through most of the 1990’s.

Ticker symbol - A system of letters used to uniquely identify a stock or mutual fund. Symbols with one to three letters are used for stocks which are “listed” and trade on an exchange. Symbols with four letters are used for NASDAQ stocks with an occasional 5 letter symbol. Symbols with five letters ending in X are used for mutual funds.

Trader – a person who looks for profits on a shorter time frame vs. an investor who tends to buy and hold a security for longer periods of time. Short term traders can profit with intraday trades, swing trades of 2 to 7 days or for a few months with intermediate term trades.

Trading - Buying and selling securities or commodities on a short-term basis, hoping to make quick profits.

Type 1 – Cash account within a brokerage account. Type 2 is considered a margin account. If you buy a stock for the cash and never borrow money (or go on margin) that transaction will stay in your Cash account or be designated as a Type 1.

Type 2 account – Margin account within the brokerage account. Type 1 is a cash account and if you buy stocks exceeding the value of the cash in your brokerage account, you will be borrowing money from the brokerage firm which is considered as going on margin. Most brokerage firms designate Type 2 as a margin account vs. Type 1 as a cash account.

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