T
[Top]
[Top]
TANDEM TECHNICAL ANALYSIS INDICATOR or TANDEM (TAI)
Some positive
developments depend on the results of more than one TAI. This
requires that the TAIs be evaluated together to determine whether
or not there is one positive
development. Such TAIS are called tandem TAIs. For examples,
see the Linear Regression Slope
and R-Squared indicators.
[Top]
[Top]
TECHNICAL ANALYSIS (TA)
Technical analysis is the study of primary
data with the goal of anticipating future price changes. Before
computers were in widespread use, manually generated charts were
the primary forecasting tools. Details of such underlying concepts
as support, resistance,
Dow Theory, and volume supporting price, are beyond the scope of
this Web site.
While a gold-plated technical analysis that yields only quadruple
digit overnight gains is not yet available, careful use of technical
analysis can reduce your risk and improve your win to loss ratio.
Consider this analogy: Given a standard 52 card deck, you win if
you pull a heart on the first draw from a randomly mixed, face down
pile. The odds of this happening (that the first card drawn is a
heart) are 13 out of 52, which is 1 in 4 or 25%. If technical analysis
can remove all the diamonds before you draw, then the odds of the
first card drawn being a heart are now 13 out of 39, which is 1
in 3 or 33%, a significant improvement.
If TA can remove the diamonds and the clubs before you draw, then
the odds of the first card drawn being a heart are now 13 out of
26, which is 1 in 2 or 50%, the same odds as a random coin toss
coming up heads.
There are more than 10,000 stocks traded on the US markets. The
odds of picking a winner from that pool are more complex, partly
because the number of winners is an unknown. If technical analysis
can reduce the number of cards in the deck down to 100 or so, then
it has done a good job of reducing your investment risk.
So why isn’t technical analysis perfect? Because the market
is not reality: It is the reflection of the perception of reality.
That perception is done by human beings that, from time to time,
trade in an illogical manner. These trades are reflected in the
market, hence the reflection of their perception.
Human beings also can perform such undesirable activities as perpetrating
frauds on investors, treating the company as their personal bank
account, trading on non-public information, and similar activities.
The number of miscreants who are detected and successfully prosecuted
has risen in recent times.
In spite of the flaws in human nature, and despite irrational investor
behavior, intelligent use of technical analysis can provide significant
financial rewards.
[Top]
TECHNICAL ANALYSIS INDICATOR (TAI)
TAI is the generic term Positive Territory uses to
describe any of a wide variety of technical
analysis tools. A list of the current
TAI in use with links to more detailed
TAI explanations is available in a different part of this web
site.
[Top]
TERM
The exact definition of term often depends on context.
For accountants and tax professionals long term generally means
one year or more. Short term is less than one year. In the context
of Positive Territory we consider short term to be about two months.
See also Day Trading
[Top]
[Top]
[Top]
TOP
The highest price for an issue, which is then followed
by a decrease. The term also refers to a particular resistance level
or the highest price during a specific time-frame. Also see bottom.
[Top]
TOTAL CUMULATIVE POSITIVE DEVELOPMENTS (TCPD)
For any issue under evaluation, the total number of
cumulative positive developments
(TCPD) for today equals the total number of new
positive developments (TNPD) for today, plus any previous NPDs
that are still positive.
[Top]
TOTAL NEW POSITIVE DEVELOPMENTS (TNPD)
For any issue under evaluation, this is the sum of
positive developments that were created as the result of the application
of technical analysis indicators to today’s primary
data.
[Top]
TRADE
A trade is the consummation of the purchase or sale
of an issue. See also buy,
sell, accumulation
and distribution.
[Top]
[Top]
[Top]
TRENDING
Trending is the general tendency of elements in a series
to move in a general up or down direction, rather than sideways.
When there is general sideways movement, it is called Non-Trending,
sometimes called trading range. Trending usually refers to the activity
of price over time.
[Top]
TRIANGULAR MOVING AVERAGE (TMA)
The TMA is a type of weighted moving average in which
the heaviest weighting is on the middle of the series. We will not
discuss TMA in any more detail here. For other types of moving average,
see Moving Averages.
[Top]
[Top]
TRIPLE EXPONENTIAL SMOOTHING OF THE LOG OF THE CLOSING
PRICE (TRIX)
Sometimes called Triple Exponential Average, TRIX
is based on a one-day difference of the triple-smoothed exponential
moving average of the closing price. The indicator eliminates cycles
shorter than the selected period. TRIX can function as a momentum
indicator and identify oversold
and overbought markets.
More about this technical analysis indicator
. . .
[Top]
U
[Top]
ULTRA SHORT TERM - See Day
Trading
[Top]
[Top]
V
[Top]
[Top]
VARIABLE MOVING AVERAGE (VMA)
The VMA is an exponential moving average that adjusts
the smoothing constant k depending on the volatility of
the values to be averaged. There are several different calculations
for VMA, which will not be discussed here. Just remember that for
VMA, k (see Exponential Moving
Average) is no longer a constant. For other types of moving
average, see Moving Averages.
[Top]
[Top]
VOLATILITY
A market that has large price changes, up or down,
is considered to be highly volatile. Several
technical analysis indicators measure volatility.
[Top]
VOLUME
Volume is the number of shares traded. When reporting
on mutual funds, indices, or sectors, volume may not be reported.
If volume is not reported, then technical
analysis indicators that use volume will report a zero value.
[Top]
VOLUME * PRICE MOMENTUM OSCILLATOR (V*PMO)
Sometimes abbreviated to V*PMO, or just VPMO, the Volume
* Price Momentum Oscillator is a combination of price and volume
indicators. More about this technical
analysis indicator. . .
[Top]
[Top]
VOLUME ADJUSTED MOVING AVERAGE (VAMA)
VAMA is another variation on weighted moving averages.
Here, the trading volume weights the values: the higher the volume,
the higher the weight. See the example for WMA
and substitute trading volumes for the weights. Remember to divide
the end result by the SUM of the trading volumes.
For other types of moving averages, see Moving
Averages (MA).
[Top]
|
