Glossary

Pattern Types have been grouped into several categories based on their behavior or the method that is used to detect the pattern. Examples of Pattern Categories are Bullish, Bearish, Classic, Short-term, Continuation and Reversal.

The number of days over which the pattern formed. Pattern Duration is equivalent to Pattern Length. In searching for Technical Analysis, one may specify the pattern duration in days. Longer duration patterns generally forecast price movement over a longer period of time. For example, a 90 day pattern anticipates price movement over the long term, compared to a shorter-term 30 day pattern.

Pattern Length is equivalent to Pattern Duration.

The specific type of pattern for pattern-based events. Examples of Pattern Types are: Head and Shoulders Bottom, Bearish Engulfing Line, Double Top. Refer to the detailed descriptions of each pattern for specific recommendations for the use of the pattern in trading.

The financial risk that a country's government will suddenly change its policies. Also known as "geopolitical risk".

The percentage of the breakout price that the price is expected to move based on this event. To calculate the Possible Target Price multiply the Possible Percentage Price Move by the Breakout Price. Take the result and add for Bottom patterns and subtract for Top patterns from the Breakout Price.

The price range that the instrument is expected to reach. This price range is determined by analyzing the event that has occurred.

A preferred stock is a class of stock entitling the holder to receive a specified dollar value per share upon liquidation of the company, and a fixed dividend paid before the common stock holders. Voting rights are usually limited to special situations such as when a certain number of dividends have been missed. Investors should also consider examining Technical Analysis for the underlying stock when researching convertible preferred shares. Technical Analysis may be considered less indicative for non-convertible preferred shares. Technical Analysis should be used as one piece of additional information within greater research regarding these instruments.

The risk that the value of a security or portfolio of securities will decline in the future

A significant short-term reversal in the price of a financial instrument or of a market in general. Prices for a security may often pullback immediately after a pattern is formed. For example a Double Top is pattern which indicates that the price of a stock is descending. When the price breaks through the confirmation point of this pattern it will often pullback or rise for a few days after the pattern has formed. It will then continue its downward trend.

An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time. The buyer of a put option estimates that the underlying asset will drop below the exercise price before the expiration date. When an individual purchases a put, they expect the underlying asset will decline in price.