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This guide will assist those of you unfamiliar with our technical analysis and trading strategies.
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Below you will find an explanation of
two typical forecasts, short and long, and the terms used within them:
Common Terms:
Bull Market
(Bullish) - market associated with steadily rising prices.
Bear Market (Bearish) - market associated with steadily
declining prices.
ST - Short Term (1-2 weeks)
MT - Medium Term (1-6 months)
LT - Long Term (1-2 years)
Example Short Strategy:
Go 50/100% short IBM on a rally in IBM near 70.00 and 72.00, stop at 75.15.
Cover your shorts near 60.15!
- 50% short indicates that you should allocate half of what you would typically invest
in a short position.
- To go short means to sell or short sell a security.
- Short selling allows you to "borrow"
the security from your broker in an effort to make profit as the value of the security declines. To realize profit, you buy
your security back at a lower price to cover your short.
- Stop (also known as risking) is a level at which a position
should be liquidated/closed to prevent further loss.
- The term "cover your shorts" means to buy back your security
at a lower price than where you initially shorted the stock to realize profit.
Example Long Strategy:
Go
50/100% long IBM on a pullback near 60.00 and 58.00, stop at 54.85. Sell IBM on a rally near 72.00!
- 50% long indicates
that you should allocate half of what you would typically invest in a long position.
- To go long means to buy a security.
- Stop is a level at which a position should be liquidated/closed to prevent further loss.
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