Glossary

A significant short-term recovery in the price of a financial instrument or of a market in general after a period of decline.

The part of the candlestick that connects the opening and closing prices. The real body shows the opening and closing prices with a clear, or a dark, rectangle. When the rectangle or real body is clear, it means that the stock closed above its opening price. When the real body is dark, it means that the stock closed below its opening price.

The price at which a stock or market can trade, but which it cannot exceed, for a certain period of time. Often referred to as "resistance level". Acts like a ceiling.

A right is an instrument entitling current common stock-holders to purchase additional common shares directly from the company at a specified price within a specified time period. The price upon issue is usually at a discount. Investors should also consider examining Technical Analysis for the underlying stock when researching rights. Technical Analysis should be used as one piece of additional information within greater research regarding these instruments.

The chance that an investment's actual return will be different than expected. This includes the possibility of losing some or all of the original investment. It is usually measured by calculating the standard deviation of the historical returns or average returns of a specific investment.

This is capital that you can lose without having to risk your lifestyle. Investors who speculate in options or futures contracts should only use risk capital. The money that a person allocates to investing in high-risk securities.

The principle that potential return rises with an increase in risk. Low levels of uncertainty (low risk) are associated with low potential returns, whereas high levels of uncertainty (high risk) are associated with high potential returns. In other words, the risk-return tradeoff says that invested money can render higher profits only if it is subject to the possibility of being lost.

Relative Strength Index (RSI) is an oscillator that measures a particular stock's current relative strength compared to its own price history. The RSI is plotted on a vertical scale numbered from 0 to 100. A security is considered to be oversold when it falls below 30 and overbought when it rises over 70. Failure swings occur when in a downtrend the RSI fails to set a new low and then goes on to set a new high or in an uptrend when the RSI fails to set a new high and then goes on to set a new low.