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. Backtesting

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

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

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

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

    A chart point or range that caps an increase in the level of ...
  6. Short (or Short Position)

    1. The sale of a borrowed security, commodity or currency with ...
Related Articles
  1. Active Trading Fundamentals

    Support And Resistance Basics

    Understanding the concept of Support and Resistance in trading can drastically improve your short-term investing strategy.
  2. Active Trading Fundamentals

    The Psychology Of Support And Resistance Zones

    Emotion drives the market more than you might realize. Find out how psychology affects support and resistance zones.
  3. Technical Indicators

    Interpreting Support And Resistance Zones

    Use of support and resistance zones can be a key to successful trades. Learn how they work and how to use them.
  4. Trading Systems & Software

    Backtesting: Interpreting The Past

    We offer some tips on this process that can help refine your current trading strategies.
  5. The correlation coefficient is a measure of how closely two variables move.
    Active Trading

    What's the Correlation Coefficient?

    The correlation coefficient is a measure of how closely two variables move in relation to one another. If one variable goes up by a certain amount, the correlation coefficient indicates which ...
  6. Trading Strategies

    What are the best technical indicators to complement the Parabolic Indicator?

    Learn about two of the best technical indicators recommended for traders to use to refine a trading strategy based on the parabolic SAR indicator.
  7. Technical Indicators

    What is the Double Exponential Moving Average (DEMA) formula and how is it calculated?

    Discover the equation for double exponential moving average, or DEMA, and learn how it is calculated for a better understanding of how it works.
  8. Forex Strategies

    How do I use Mass Index for creating a forex trading strategy?

    Discover how forex traders can use Donald Dorsey's mass index to spot possible reversals in the price action trends of currency pairs.
  9. Trading Strategies

    What are the main differences between Money Flow & Money Flow Index (MFI)?

    Find out how to differentiate between standard money flow and the Money Flow Index, two methods of expressing the strength behind a security's price trend.
  10. Technical Indicators

    What are the best technical indicators to complement the Negative Volume Index (NVI)?

    Explore other technical indicators that can be used when designing a trading strategy that incorporates the negative volume index.

You May Also Like

Hot Definitions
  1. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  2. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  3. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  4. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents ...
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center