Terminology Guide - "E"

Engulfing Pattern: A candlestick formation that signals a potential reversal out of the current trend is on the way. The first candle is completely engulfed by the following candles body, showing an overpowering amount of buying/selling pressure.

Exchange Traded Fund (ETF): A security that tracks a group of equities. I like to think of it as a basket of stocks. Unlike a mutual fund, ETF’s are closed off so the holdings cannot change to avoid any tracking error. ETF’s usually track a specific group, industry, sector, commodity, or index.

Exponential Moving Average (EMA): A moving average that gives greater weight to more recent data in an attempt to improve reaction time.

 

F