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Trading Terminology
There is a lot of trading terminology that you must learn before you can begin to invest in the stock market. In today’s article we discuss some trading terminology to get you started, but there is a lot more to learn before you begin to invest money in stocks.
Fundamental analysis – fundamental analysis is a method used by investors to analyze the value of a security. Investors examine a company’s financials including sales and earnings, growth, debt and assets. They also look at things such as the company’s operations including management, products and services, as well as the company’s competition in the market place.
Technical analysis – technical analysis is used to predict future market trends and price movements of stocks. Technical analysts evaluate stocks and other securities by analyzing market data such as price and volume through the use of stock charts. The intrinsic or fundamental value of a company is not studied because technical analysts believe they can predict the future price of stocks based on historical prices and other variables.
Capital gain – capital gain is the amount in which an asset’s selling price exceeds its initial purchase price. Capital gains typically receive favorable tax treatment when compared to ordinary gains. Realized capital gains is profit as a result of selling an investment whereas unrealized capital gains is an investment that has not yet been sold, but if it were sold it would result in profits.
Equity – equity is the value of assets minus the total liabilities and it can be described as ownership interest in a company that is in the form of common stocks or preferred stocks. The trading term equity is also referred to as “net worth “or “shareholder’s equity,” and when referring to equity in the context of a brokerage account, it equals the net value of the account.
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In today’s article we discuss some trading
terminology to get you started, but there is a
lot more to learn before you begin to invest
money in stocks.
4. Before We Continue…
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They also look at things such as the company’s
operations including management, products
and services, as well as the company’s
competition in the market place.
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The intrinsic or fundamental value of a company
is not studied because technical analysts
believe they can predict the future price of
stocks based on historical prices and other
variables.
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Realized capital gains is profit as a result of
selling an investment whereas unrealized
capital gains is an investment that has not yet
been sold, but if it were sold it would result in
profits.
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Equity – equity is the value of assets minus the
total liabilities and it can be described as
ownership interest in a company that is in the
form of common stocks or preferred stocks.
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The trading term equity is also referred to as “net
worth “or “shareholder’s equity,” and when
referring to equity in the context of a
brokerage account, it equals the net value of
the account.
