Material Amount

AAA

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.

INVESTOPEDIA EXPLAINS '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. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches ...
  2. Restricted Cash

    Monies earmarked for a specific purpose and therefore not available ...
  3. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  4. Stopped Out

    The execution of a stop-loss order. Stopped out refers to when ...
  5. Protective Stop

    A strategy designed to protect existing gains or thwart further ...
  6. Support (Support Level)

    The price level which, historically, a stock has had difficulty ...
RELATED FAQS
  1. How does the risk of investing in the electronics sector compare to the broader market?

    The risk of investing in the electronics sector closely approximates the risk of investing in the broader market. The electronics ... Read Full Answer >>
  2. What are the advantages and disadvantages of using systematic sampling?

    As a statistical sampling method, systematic sampling is simpler and more straightforward than random sampling. It can also ... Read Full Answer >>
  3. How do markets account for systematic risk?

    Systematic risks provide markets with an unpleasant quandary. Economists, policy makers, directors, fund managers and investors ... Read Full Answer >>
  4. How effective is creating trade entries after spotting a Tri-Star pattern?

    The tri-star patterns, both bullish and bearish, are about as rare as they are unreliable. Comprised of three consecutive ... Read Full Answer >>
  5. What stage of the economic cycle is usually the best for an investor to enter the ...

    The best time during the economic cycle for an investor to enter the electronics sector is when he has confidently identified ... Read Full Answer >>
  6. How do S&P 500 futures work?

    S&P 500 futures are a type of capital asset contract that provides a buyer the right to a predetermined selection of ... Read Full Answer >>
Related Articles
  1. Active Trading Fundamentals

    Trailing-Stop Techniques

    The important decision to exit a position must be based on more than emotion if you want to be a disciplined trader.
  2. Options & Futures

    Forget The Stop, You've Got Options

    Using options instead of stop-loss orders adds finesse and control in limiting losses.
  3. Active Trading Fundamentals

    Trade On Support For The Best Exit Strategy

    Find your sound exit strategy based on support and resistance levels, while understanding the psychology behind them.
  4. Active Trading

    How To Survive The Trading Game

    Gain insight into how a trader/programmer approaches the task of designing a trading system.
  5. Active Trading

    10 Steps To Building A Winning Trading Plan

    It's impossible to avoid disaster without trading rules - make sure you know how to devise them for yourself.
  6. Active Trading Fundamentals

    Limiting Losses

    It is impossible to avoid them completely, but there is a systematic method you can use to control them.
  7. Chart Advisor

    Watch These Stocks for a Breakout

    These stocks are are tight and will eventually breakout out. Here ways to trade them.
  8. Investing Basics

    What's the Primary Market?

    The primary markets are where investors can get first crack at a new security issuance.
  9. Investing Basics

    What is the Coupon?

    In the financial world, “coupon” represents the interest rate on a bond.
  10. Investing Basics

    Explaining the Coupon Rate

    Coupon rate is the stated interest rate on a fixed income security.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center