Terminology Guide - "M"

MACD (Moving Average Convergence Divergence): A trend-following indicator that shows the momentum of a stock by showing the relationship between two moving averages. The default calculation is done by subtracting the 26-period exponential moving average from the 12-period exponential moving average. The 9-period exponential moving average is called the signal-line, which provides the buy and sell signals.

Market Capitalization (“Market Cap”): The market value of a company’s outstanding shares.

Margin Call: A notification sent by a broker to an investor that requires the deposit additional money or securities to cover a loss.

Marubozu: A candlestick formation that has no lower or upper shadow. If the close is higher than the open, then it is very bullish and vice versa.

Momentum: A measurement of the rate of rise or fall in a stock’s price. Momentum is often thought of in bullish context but it can be either bullish or bearish.

Moving Average (MA): An average of data for a length of time periods. Moving averages are a great way to analyze the trend of a stock and they can also act as support and resistance. READ THIS blog post for a more in-depth explanation.

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