Filter

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Filter

A rule that stipulates when a security should be bought or sold according to its price action.

Filter Rule

In technical analysis, an arbitrarily set percentage of increase or decline in a stock's price that the analyst sees as an indicator to buy or sell the stock. For example, the analyst may set his/her own filter rule at 15%. If the stock rises 15%, the analyst recommends buying; if it falls 15%, he/she recommends selling. While the particular percentage is subjective, one arrives at it by observing the stock's historical trends. The filter rule exists to help the investor avoid buying or selling at insignificant or anomalous changes in price. However, many analysts do not believe that the filter rule consistently produces profits for the investor.
References in periodicals archive ?
To test the effectiveness of this protocol, agar growth plates were produced and to these were added filtered Belladonna in 6X, 12X, 24X or 30X potencies or a filtered control (distilled water).
Sunstrum and her team have since added filters for Welcome Week, commencement and other special events.
14 -- Facebook has added filters to its 'On this Day' feature to help users avoid memories they don't want to be reminded of.