DEFINITION of 'Material Amount'

The movement of a security's price to the extent that it confirms or refutes the trader's original prediction. A movement of material amount that refutes the trader's original prediction should trigger a stop-loss trade.

It can also signify an amount worth mentioning, as in financial statements or conference calls. If it is not a material amount, then it is considered too insignificant to mention.

BREAKING DOWN 'Material Amount'

The exact number that is considered a material amount is different for every trade. Traders that set this number wrong in their systems risk being stopped out early or taking too much risk. It is often thought that this amount can be more important to a profitable trading system than actually predicting the price movement correctly.

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