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Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

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Definition

A technical analysis concept meaning the point at which a technical indicator or range of indicators gives the investor a signal to sell the share (or other security). Sell signals vary in complexity from a simple moving average sell signal which is given when the share's price chart falls down through its moving average to highly complex signals involving multiple indicators as part of an overall trading strategy. The problem with sell signals is that they are generated by the computer and occur when a certain condition (or set of conditions) is reached. This means that they are quite often inappropriate. Particular indicators or trading strategies can be back-tested to establish their historical profitability using a sophisticated program like Metastock. The problem with this is that a historically profitable trading strategy may not continue to be profitable in the future.

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