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Finance GlossaryAbc Wave Theory
Abc Wave Theory
Definition of Abc Wave Theory
Abc Wave Theory or Elliot Wave Theory is used to determine the direction of the stock market by identifying recurring waves or patterns over the long term. The theory is named after Ralph Nelson Elliott.
5 Motive or Impulse Waves are formed if the movement is in the direction of the trend. 3 Corrective Waves are formed if the movement is against the direction of the trend.
5 Motive or Impulse Waves are formed if the movement is in the direction of the trend. 3 Corrective Waves are formed if the movement is against the direction of the trend.
Related Terms
Bear Market
A bear market is a period of continuous decline in the stock or commodity market.
Typically, investors believe that a bear market has arrived when a stock, commodity, or entire index fall by 20% or more from its most recent highs.
The onset of a bear market is generally in tandem with poor economic conditions.
Typically, investors believe that a bear market has arrived when a stock, commodity, or entire index fall by 20% or more from its most recent highs.
The onset of a bear market is generally in tandem with poor economic conditions.
Block Trade
A block trade is a substantially large buy or sell order for a stock, commodity, or other security. Block trades are typically done by institutional investors like hedge funds, mutual funds, and others to mask the true size of the transaction.
Shares change hands between companies after the price of the security is privately negotiated. Most block trades are routed through investment banks and executed outside the conventional market.
Shares change hands between companies after the price of the security is privately negotiated. Most block trades are routed through investment banks and executed outside the conventional market.
Commodity Spread Straddle
A commodity spread straddle or simply a commodity straddle is an options trading strategy where a trader will buy call and put options with the same strike price and expiration date.
The goal of a commodity straddle is to create a neutral strategy that wins in the event that the underlying security’s price rises or falls. That said, the profits must be higher than the total premium paid for the options.
The goal of a commodity straddle is to create a neutral strategy that wins in the event that the underlying security’s price rises or falls. That said, the profits must be higher than the total premium paid for the options.
Money Flow Index (MFI)
Money Flow Index (MFI) is a momentum-based technical indicator that uses trading volume and price to measure selling and buying pressure. Often called a volume-weighted RSI, it helps traders identify overbought or oversold conditions and potential trend reversals in the market.
Pre-Market Trading
Pre-Market Trading is a trading session (9:00-9:08 AM for Equity) that takes place on an exchange before the start of normal market hours. India has a short pre-open session on both the NSE and BSE. This session is mainly for finding the price for the day and includes a restricted number of trade types. The pre-market session is important in absorbing news and events that have occurred overnight, which will decide the opening price for the different stocks, giving market participants an idea of how the market is likely to open.
Forex Trading
Forex trading means buying and selling currency pairs through exchange-traded derivatives or on the OTC market. A currency can only be bought and sold in exchange for another currency, which is why forex trading is always done in pairs.
Trading forex derivatives is carried out on stock exchanges authorized by regulatory bodies (SEBI & RBI), in tandem with approved brokers who allow users to engage with the forex futures trading and options trading markets.
Trading forex derivatives is carried out on stock exchanges authorized by regulatory bodies (SEBI & RBI), in tandem with approved brokers who allow users to engage with the forex futures trading and options trading markets.
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