Glossary — T

You have come so far! It is now time to tackle the T's of investing! TRENDLINE A trendline in stock trading is a visual representation of a stock's price movement over time. It is a line drawn on a chart to connect a series of higher lows (in an uptrend) or lower highs (in a downtrend). It can be thought of as a roadmap for the stock's price action Here is how they look:

• Uptrend: A line along the bottom of a series of higher lows. As long as the price stays above the trendline, the uptrend is likely to continue.
• Downtrend: A line along the top of a series of lower highs. As long as the price stays below the trend line, the downtrend is likely to continue.

Trendline: What It Is, How To Use It in Investing, With Examples

Technical Analysis

Technical analysis is a way to try predict stock prices by studying charts and patterns, rather than analysing a company's financial statements or news. It is the art of analysing charts, trends and price action to try to anticipate what might happen next using certain tools. For example:

• Charts (line, bar, candlestick)
• Trends (up, down, sideways)
• Support and resistance levels
• Indicators (moving averages, RSI, etc.)
• Patterns (head and shoulders, triangles, etc.)

Technical Analysis: What It Is and How to Use It in Investing

Take-Profit

Take Profit (TP) is an order to close a trade and take the profit when it reaches a certain profit level. It is like setting a target for your trade! Here is how it works:

• You would buy a suck at a certain price (eg. 3800)
• You then set your take profit (TP) at a higher price that you want to target (3900)
• When the price reaches your Take Profit level (3900), your trade is automatically closed, and you lock in your profit!

It is as simple as that! Take-Profit Order (TP): Definition, Use in Trading, and Example

Time Horizon

The time horizon concept refers to the length of time an investor plans to hold a position or investment. It is like planning a trip:

• Short-term: A quick day trip (hours, days, or weeks)
• Medium-term: A weekend getaway (weeks, months)
• Long-term: A extended vacation (months, years)

Your time horizon affects:

• Risk tolerance: Short-term = higher risk, Long-term = lower risk.
• Trading strategy: Short-term = frequent trades, Long-term = buy-and-hold.
• Market fluctuations: Short-term = more sensitive, Long-term = less sensitive.

Understanding your time horizon helps you:

• Set realistic goals
• Choose appropriate investment strategies
• Manage risk effectively

By defining your time horizon, you can navigate the markets with a clear plan! Investment Time Horizon: Definition and role in investing

Taxes

Taxes are fees collected by the government to fund public services and infrastructure. Tax is either automatically taken from you when you make a purchase (Such as Value Added Tax) and other taxes you have to file yourself to SARS. Some examples of public services and infrastructure are:

• Funding public services such as education, healthcare, infrastructure.
• Supporting social grants and welfare programs.
• Financing government projects and initiatives.

Tax percentages range between 15% (Value Added Tax - VAT) up to 45% (Individual Income Tax Rates). Keep in mind that tax brackets are updated annually so it is important to keep up to date! Want a simple, fun way to understand more about taxes in South Africa? Click here! There are many more T's to come - stay informed! Share this post: Categories STIOSTM: Terminology Sign up for blog updates! Join my email list to receive updates and information. Email address

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