CMT Level 1 - Chart School – Glossary- WITH COMPLETE SOLUTIONS

Abandoned Baby correct answer: A rare reversal pattern characterized by a gap followed by a Doji, which is then followed by another gap in the opposite direction. The shadows on the Doji must completely gap below or above the shadows of the first and third day. Above the Market correct answer: A limit order to buy or sell a security for a specified price that is higher than the current market price. If the market does not reach the specified price, the order will go unfilled. Absolute Breadth Index correct answer: Developed by Norman Fosback, the ABI is equal to the absolute value of the difference between the advancing issues and the declining issues. It shows how much activity and volatility is taking place on the New York Stock Exchange while totally ignoring the price direction. Absolute Price Oscillator (APO) correct answer: An indicator based on the difference between two exponential moving averages, and is expressed in absolute terms. Also known as the MACD indicator, the APO is calculated by subtracting the longer EMA from the shorter EMA. See ChartSchool article on Price Oscillators. Accredited Investor correct answer: Term used by SEC in Regulation D of private placements. Concept: although 35 is the upper limit of persons who may