Test

AAA

DEFINITION of 'Test'

In technical analysis, it is when a stock price approaches a support or resistance level set by the market. If the stock stays within the support and resistance levels, the test is passed. However, if the stock price reaches new lows and/or new highs, the test has failed.

INVESTOPEDIA EXPLAINS 'Test'

To test whether a stock price will break a support or resistance level, technical traders will typically use specific stock-charting programs designed to track price movements to identify when to buy or sell a position.

RELATED TERMS
  1. Support (Support Level)

    The price level which, historically, a stock has had difficulty ...
  2. Backtesting

    The process of testing a trading strategy on prior time periods. ...
  3. Long (or Long Position)

    1. The buying of a security such as a stock, commodity or currency, ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Position

    The amount of a security either owned (which constitutes a long ...
  6. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
Related Articles
  1. Support And Resistance Basics
    Active Trading Fundamentals

    Support And Resistance Basics

  2. The Psychology Of Support And Resistance ...
    Active Trading Fundamentals

    The Psychology Of Support And Resistance ...

  3. Interpreting Support And Resistance ...
    Technical Indicators

    Interpreting Support And Resistance ...

  4. Backtesting: Interpreting The Past
    Trading Systems & Software

    Backtesting: Interpreting The Past

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center