Glossary · 12 terms
Technical Analysis
All technical analysis terms in the EquitiesAmerica.com glossary — plain-English definitions for American investors.
Average True Range(ATR)
Average True Range (ATR) is a volatility indicator developed by J. Welles Wilder Jr. that measures the average magnitude of a security's historical price movements over a specified period, incorporating gaps between sessions to capture the full range of price activity.
Bollinger Bands(BB)
Bollinger Bands are a volatility indicator consisting of a simple moving average flanked by two bands plotted at a specified number of standard deviations above and below the average, designed to characterize the historical relationship between price and price variability.
Candlestick Chart(Japanese candlestick)
A candlestick chart is a type of financial chart that displays the open, high, low, and closing price of a security for a specified time period using a 'candle' shape, with the body representing the open-to-close range and the wicks extending to the period high and low.
Fibonacci Retracement(Fibonacci levels)
Fibonacci retracement is a technical analysis tool that plots horizontal price levels at specific percentage ratios derived from the Fibonacci number sequence — most commonly 23.6%, 38.2%, 50%, 61.8%, and 78.6% — to identify historically significant price zones within a prior price swing.
Head and Shoulders Pattern(H&S pattern)
The head and shoulders is a historical chart pattern studied in technical analysis, characterized by three consecutive peaks — a taller central peak ('head') flanked by two shorter peaks ('shoulders') — that has historically been associated with trend reversals at market tops in examined historical price data.
MACD(Moving Average Convergence Divergence)
MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator that displays the relationship between two exponential moving averages of a security's price, commonly used to identify historical shifts in the pace and direction of price momentum.
Moving Average(simple moving average)
A moving average is a technical indicator that calculates the average closing price of a security over a specified number of past periods, updated continuously to smooth out short-term price fluctuations and reveal longer-term price trends.
On-Balance Volume(OBV)
On-Balance Volume (OBV) is a cumulative volume indicator developed by Joe Granville that adds each day's volume to a running total on up days and subtracts it on down days, used historically to study whether volume flow has been consistent with or diverging from the direction of price movement.
Relative Strength Index(RSI)
The Relative Strength Index (RSI) is a momentum oscillator developed by J. Welles Wilder Jr. that measures the speed and magnitude of recent price changes to characterize the relative pace of gains versus losses over a specified look-back period, typically 14 periods.
Resistance Level
In technical analysis, a resistance level is a historical price area where selling pressure has previously been strong enough to halt or reverse an advancing price trend, characterized by recurring instances of the price stalling or reversing in that zone.
Support Level
In technical analysis, a support level is a historical price area where buying interest has previously been strong enough to halt or reverse a declining price trend, characterized by recurring instances of the price stabilizing or bouncing in that zone.
Volume Weighted Average Price(VWAP)
Volume Weighted Average Price (VWAP) is the average price at which a security has traded throughout a trading day, weighted by the volume of each transaction, giving greater influence to price levels where larger quantities of shares have historically changed hands.