Material Amount

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.

RELATED TERMS
  1. Reversal Amount

    The amount of price movement required to shift a chart to the ...
  2. Technical Rally

    An upward movement in a security's price following a declining ...
  3. Fakeout

    A term used in technical analysis to refer to a situation in ...
  4. Confirmation Bias

    A psychological phenomenon that explains why people tend to seek ...
  5. Flat On A Failure

    Closing out a position and taking profits when the security in ...
  6. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
Related Articles
  1. Trading Strategies

    Profit Without Predicting The Market

    Traders who try to predict the future can actually harm their trading options.
  2. Technical Indicators

    Understanding Trend Analysis

    Trend analysis is the use of past performance to predict future price movement of a security.
  3. Investing Basics

    Day Trading Strategies

    Day trading is the term often used for buying and selling stocks within the same day. Day traders seek to make a profit by leveraging large amounts of capital in order to take advantage of small ...
  4. Stock Analysis

    May's Basic Material Winners

    Check out May's best Basic Material Stocks!
  5. Forex Education

    Forex: Money Management Matters

    Currency trading offers far more flexibility than other markets, but long-term success requires discipline in money management.
  6. Trading Strategies

    4 Common Active Trading Strategies

    Learn four of the most popular active trading strategies and why active trading isn't limited to professional traders anymore.
  7. Sectors

    The Debt Report: The Materials Sector

    Find out why the U.S. materials sector has accumulated more and more debt each year between 2011 and 2015, outstripping valuation gains.
  8. Stock Analysis

    Basic Materials Stocks with Triple Digit Returns

    Basic Materials Stock have been hot this year. Here are 6 that have returned triple digit returns this year.
  9. Trading Strategies

    How To Outperform The Market

    Active trading is an investing style that aims to beat the market. Find out how it works, and whether it will work for you.
  10. Investing Basics

    What Type Of Trader Are You?

    There are different ways stock traders attempt to profit from market movements. Which of the strategies do you use?
RELATED FAQS
  1. Why is the Ease Of Movement Indicator important for traders and analysts?

    Read more about the ease of movement indicator, a technical momentum oscillator created by Richard Arms to track price changes ... Read Answer >>
  2. Does a company logo change require a material disclosable event?

    A company logo change usually constitutes a material disclosable event. Securities law requires that companies disclose all ... Read Answer >>
  3. How risky are stop loss orders?

    Understand the purpose and uses of a stop-loss order as a risk management tool for trading and also the risk associated with ... Read Answer >>
  4. How do traders implement the Buy a Bounce Strategy?

    Learn how traders execute the buy a bounce strategy for a security that has reached an important support level. Find out ... Read Answer >>
  5. On which financial statement does a company list its raw material costs?

    Discover what items are raw materials, how raw material costs affect businesses, and where these costs are recorded on a ... Read Answer >>
  6. How do I place a stop loss order?

    Learn how to place a stop-loss order and how traders use stop orders to either limit potential losses or to protect part ... Read Answer >>
Hot Definitions
  1. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  2. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  3. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  5. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  6. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
Trading Center