http://www.CandlestickForums.com Trading Terminology There is a lot of trading terminology that you must learn before you can begin to invest in the stock market. In today’s article we discuss some trading terminology to get you started, but there is a lot more to learn before you begin to invest money in stocks. Fundamental analysis – fundamental analysis is a method used by investors to analyze the value of a security. Investors examine a company’s financials including sales and earnings, growth, debt and assets. They also look at things such as the company’s operations including management, products and services, as well as the company’s competition in the market place. Technical analysis – technical analysis is used to predict future market trends and price movements of stocks. Technical analysts evaluate stocks and other securities by analyzing market data such as price and volume through the use of stock charts. The intrinsic or fundamental value of a company is not studied because technical analysts believe they can predict the future price of stocks based on historical prices and other variables. Capital gain – capital gain is the amount in which an asset’s selling price exceeds its initial purchase price. Capital gains typically receive favorable tax treatment when compared to ordinary gains. Realized capital gains is profit as a result of selling an investment whereas unrealized capital gains is an investment that has not yet been sold, but if it were sold it would result in profits. Equity – equity is the value of assets minus the total liabilities and it can be described as ownership interest in a company that is in the form of common stocks or preferred stocks. The trading term equity is also referred to as “net worth “or “shareholder’s equity,” and when referring to equity in the context of a brokerage account, it equals the net value of the account.

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Trading
Terminology

2. www.CandlestickForums.com
There is a lot of trading terminology that you
must learn before you can begin to invest in
the stock market.

3. www.CandlestickForums.com
In today’s article we discuss some trading
terminology to get you started, but there is a
lot more to learn before you begin to invest
money in stocks.

4. Before We Continue…
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Fundamental analysis – fundamental analysis is a
method used by investors to analyze the value
of a security.

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Investors examine a company’s financials
including sales and earnings, growth, debt and
assets.

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They also look at things such as the company’s
operations including management, products
and services, as well as the company’s
competition in the market place.

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Technical analysis – technical analysis is used to
predict future market trends and price
movements of stocks.

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Technical analysts evaluate stocks and other
securities by analyzing market data such as
price and volume through the use of stock
charts.

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The intrinsic or fundamental value of a company
is not studied because technical analysts
believe they can predict the future price of
stocks based on historical prices and other
variables.

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Capital gain – capital gain is the amount in
which an asset’s selling price exceeds its initial
purchase price.

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Capital gains typically receive favorable tax
treatment when compared to ordinary gains.

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Realized capital gains is profit as a result of
selling an investment whereas unrealized
capital gains is an investment that has not yet
been sold, but if it were sold it would result in
profits.

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Equity – equity is the value of assets minus the
total liabilities and it can be described as
ownership interest in a company that is in the
form of common stocks or preferred stocks.

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The trading term equity is also referred to as “net
worth “or “shareholder’s equity,” and when
referring to equity in the context of a
brokerage account, it equals the net value of
the account.

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Current market value – the current market value
is the present worth of a portfolio of securities
at the current market price.

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Diversification – portfolio diversification is the
reduction of risk through the combination of
investments that are unlikely to move in the
same direction.

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Basically it allows for more consistency in
performance under changing and unpredictable
market conditions and reduces the upside and
downside potential.

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A diversified portfolio may include stocks,
bonds, real estate and gold.

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A diversified stock portfolio should include stock
in companies from different industries, in the
event one industry struggles.

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There is a lot more trading terminology to learn
about as it relates to the stock market.

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Continue your trading education to determine
how you would like to invest.