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and reflecting a trader's speculation on support (the lower channel line) and resistance (the upper channel line). In day trading, the channel refers to the area between the intraday high and low. In charting, a price channel contains prices throughout a trend. There are three ways to draw channels: (1) parallel, (2) rounded, and (3) channels that connect lows (bear trend) or highs (bull trend). |
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Chicago Board of Trade (CBOT) An exchange where grain, gold, and U.S. Treasury Bond futures and options are traded. |
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clearing house An agency associated with an exchange, which settles trades and regulates delivery. |
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closed trades Positions that either have been liquidated or offset. |
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commission The fee paid to a broker to execute a trade, based on number of shares, bonds, options and/or their dollar value. Full service brokers offer advice and usually have a full staff of analysts who follow specific industries. Discount brokers simply execute a client's order and usually do not offer an opinion on a proposed purchase. |
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commodity A physical substancesuch as food, grains, and metalswhich is interchangeable with other products of the same type, and which investors buy or sell, usually through futures contracts. Or, more generally, a product that trades on a commodity exchange (this would also include foreign currencies and financial instruments and indexes). |
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common stock Securities representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation. In the event of liquidation, common stock holders have rights to a company's assets only after bondholders, other debt holders, and preferred stock holders have been satisfied. |
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confidence indicator A measure of investors' faith in the economy and the securities market. A low or deteriorating level of confidence is considered by many technical analysts to be a bearish sign. |
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confirmation The written statement that follows any "trade" in the securities markets. Confirmation is issued immediately after a trade is executed. It spells out settlement date, terms, commission, etc. |
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consolidation A time of relative balance between supply and demand characterized by narrow price rangesthe opposite of volatility. Also known as a congestion period. A pause that allows participants in a market to reevaluate the market and sets the stage for the next price move. |
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consumer price index (CPI) An inflationary indicator that measures the change in the cost of a fixed group of products and services, including housing, electricity, food, and transportation. The CPI is published monthly by the Bureau of Labor Statistics and is the broadest gauge of costs and services. Also called cost-of-living index. |
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contra broker The broker handling the other side of a trade; e.g., when buying, the seller is the contra broker. |
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