Glossary - O

Overbought A technical condition that occurs when prices are considered too high and susceptible to a decline.

Momentum and the Relative Strength Index. 

This line can then be compared with the price chart of the underlying security to look for divergences or confirmation.

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Define overbought. overbought synonyms, overbought pronunciation, overbought translation, English dictionary definition of overbought. v. Past tense and past participle of overbuy. adj. Characterized by excessively high prices owing to prior heavy buying and a concomitant rise in prices: an.

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Overbought refers to a security that traders believe is priced above its true value and that will likely face corrective downward pressure in the near future.

Analysts term a stock "overbought" when the stock reaches a point in trading where technical indicators suggest the next price move of the stock will be down. When a stock's price has risen too. Overbought vs. Oversold and What This Means for Traders. Your demo is preloaded with £10, virtual funds, which you can use to trade over 10, live global markets. 

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The term “overbought” is used to describe a market that has advanced to a point at which, historically, it has tended to reverse and move lower. Overbought is the opposite of oversold. To identify overbought conditions in markets, traders and investors use technical indicators known as oscillators. The Relative Strength Index (RSI) was created by J. Welles Wilder Jr. and introduced in his book, "New Concepts in Technical Trading Systems," published in Wilder was a mechanical engineer.

Overbought Used in the context of general equities. Technically too high in price, and hence a technical correction is expected. See: Heavy. Antithesis of oversold. Overbought In technical analysis, describing a security with too high a price. This means that the technical indicators on the security do not justify its current price. Technical analysts. Overbought definition is - not likely to show an immediate rise in price because of prior heavy buying and accompanying price rises. How to use overbought in a sentence. not likely to show an immediate rise in price because of .

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