Glossary

Short definitions for the terms used across the Trifecta Signals Learn section and the site. For the ideas behind the terms, see Technical Analysis, Explained and How to Read a Track Record.

Signal — A dated, rule-based observation that a stock has met a defined set of conditions at a point in time. A signal is a record of what a method detected, not a promise about what happens next.

Early signal — The first date a signal's conditions were met; the starting point from which a signal's subsequent performance may be measured.

Confirmation — A later, follow-up condition that some methods require after an early signal before treating the signal as fully established. Not every method uses one.

Track record — The complete published history of a method's signals and their measured outcomes, including the ones that failed.

Hit rate — The share of signals that reached a defined outcome (for example, a specified gain) within a fixed period after the signal. Meaningful only together with the target, the window, and the sample size.

Drawdown — The decline from a peak. For a signal, the worst dip below the entry price over a measured period; for an account, the fall from its high-water mark. See Drawdowns and Position Sizing.

Market cap (market capitalization) — A company's total market value: share price multiplied by shares outstanding. The standard size tiers are Mega cap ($200B and above), Large cap ($10B to $200B), Mid cap ($2B to $10B), and Small cap (under $2B).

Index — A defined basket of stocks whose combined performance is tracked as a single number, such as the S&P 500, the Dow Jones Industrial Average, the Nasdaq-100, or the Russell 2000.

Constituent — A stock that is a member of an index. Index providers add and remove constituents on their own schedules, so membership changes over time.

RSI (Relative Strength Index) — A momentum oscillator scaled from 0 to 100 that compares recent gains to recent losses. By convention, readings above 70 are called overbought and below 30 oversold.

MACD (Moving Average Convergence Divergence) — An indicator built from moving averages, comparing a faster average of price against a slower one, with a smoothed signal line. Crossings of the two lines mark shifts in short-term momentum.

Stochastic oscillator — An indicator expressing where price closed within its recent high-to-low range, as two lines, %K and %D. By convention, readings above 80 are called overbought and below 20 oversold.

Moving average — The average of a stock's price over a rolling window, used to smooth noise and reveal trend. A simple average weights all prices equally; an exponential average weights recent prices more. See Trend and Moving Averages.

Trend — A sustained directional bias in price: higher highs and higher lows in an uptrend, the reverse in a downtrend. Always relative to a timeframe.

Support — A price zone where declines have previously stalled, associated with demand appearing. Resistance is the mirror image: a zone where advances have stalled, associated with supply.

Volume — The number of shares that changed hands in a period; the market's participation measure.

Liquidity — How readily a stock can be traded in size without moving its price much. High trading volume and tight bid-ask spreads indicate high liquidity.

Volatility — The size of a stock's price swings, regardless of direction. A descriptive statistic about movement, not a judgment about risk or value.

Sector — A grouping of companies in related lines of business (for example, Technology or Health Care), used to organize and compare stocks.

Overbought / Oversold — Conventional labels for extreme momentum readings — a stock that has risen (or fallen) unusually fast over a measured stretch. Labels about pace, not conclusions about direction.

Divergence — A disagreement between price and an indicator: for example, price making a new high while a momentum indicator makes a lower one. Read as a sign that a move's internal strength differs from its appearance.

Benchmark-relative return (SPY excess) — A signal's return minus the return of a benchmark over the same period. SPY is the widely traded fund tracking the S&P 500, so "SPY excess" is performance relative to that index.

Issuer — The company behind a security. A single issuer can have multiple listed share classes trading under different tickers.

Delisted — Removed from an exchange, whether through acquisition, merger, privatization, or failure to meet listing standards. Delisted names remain part of an honest historical record.

TTM (trailing twelve months) — A measurement window covering the most recent twelve months, used for figures like revenue and distributions.

Free cash flow — The cash a business generates from operations after capital expenditures — the cash available to repay debt, pay distributions, or reinvest.

Revenue growth — The rate at which a company's sales have increased over a period, typically measured year over year or on a TTM basis.

Position sizing — Deciding what fraction of an account a single position receives, usually by working backward from how much the account may lose if the position goes wrong.

Educational material only — not investment advice.