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 ?
Compensating filters are a tool used by radiologic science professionals to reduce excessive optical density, thereby improving the quality and diagnostic value of radiographs.
Feczke et al[8] reported that compensating filters reduced radiation exposure during double contrast barium enema examinations by 14% to 19%.
The study reported in this article was undertaken to determine the role of compensating filters in reducing patient exposure to radiation.