Glossary - T

Technical Analysis

The art of identifying a trend reversal at a relatively early stage and riding on that trend until the weight of the evidence proves that the trend has reversed.

 
Theta

Theta shows the change in an option's price (in points) due to the effect of time alone.  The longer the time until expiration, the less effect that time has on the option’s price.  As it nears expiration, the effect can be great, particularly on out-of-the-money options.  Theta is also referred to as "time decay."

Tick

The minimum fluctuation of a tradable security.

Tick Indicator

Measures the number of stocks traded on a specific exchange whose last trade was an uptick or a downtick.

Time Limit Order

An order that designates the time during which it can be executed.

Trade Balance

The difference between a nation's exports and imports of merchandise.

Trading Range

A period in which prices fluctuate within specific price levels.  A trading range reflects an overall balance between buyers and sellers.

Trailing Stop

A stop-loss order that is continually changed to follow the prevailing price trend.

Trend

The tendency of a set of statistical data as related to time to move in a specific overall direction.

Trend Channel

An up sloping or down sloping trading range where it is possible to construct two parallel trendlines, one joining a series of peaks, the other a series of troughs.

Trendline

A line drawn that connects a series of highs in a downtrend or a series of lows in an uptrend. Up trendlines represent support and down trendlines resistance. Trendline penetrations either result in consolidation moves or an actual reversal in trend. Their significance is determined by their length, the number of times they have been touched or approached and the steepness of the angle of ascent or descent.

Triangular Moving Average

A moving average in which each day's data is multiplied by a weight that increases in value at steady increments to a peak value and then declines to zero at equivalent increments. The sum of the weighted daily data is divided by the number of variables.

Triangle Patterns

Triangles are formed when the price breaks out from a trading range that is confined by two converging trendlines. When one line is ascending and the other descending the pattern is known as a “symmetrical triangle’. When one of the lines is at right angles to the vertical axis it is known as a “right angled triangle”. Ascending right-angled triangles develop in uptrends and descending right-angled triangles develop in downtrends.

TRIN

Also known as the ARMS index: It is an oscillator of market breadth indicator that also uses volume in its construction. It moves inversely with the market, which means that a low number  i.e. between 30-50 is bullish and a high one, in excess of 150 is bearish.. The index is often smoothed with a simple moving average.

True Range

The largest of the following: Today's high minus today's low, today's high minus yesterday's close, today's low minus yesterday's close.

Two Day (bar) Reversal

These patterns develop after a persistent trend. The first opens on the low (high in a downtrend) and closes on the high(low in a downtrend). The second opens at the same level as the previous sessions close and then closes at or close to the previous session’s low (high in a downtrend)

Tweezer Bottoms and Tops

A two period candlestick formation where both candles have identical highs and lows. 

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