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Ask Price
The price at which the market sells a currency or asset. It is the price a buyer needs to pay to acquire the asset.
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Asset
A financial or tangible item with value that can be owned or controlled and has the potential to generate future economic benefits.
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Asset Index
A list of all the underlying assets available for trading, often provided by a broker or financial institution.
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Bar Chart
A type of financial chart that displays the open, high, low, and close prices for a specific time period as vertical bars.
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Bear Market
A market condition characterized by declining prices, pessimism, and a general downward trend in the financial markets.
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Bid Price
The price at which the market is willing to buy a currency or asset. It represents the highest price a buyer is willing to pay to acquire the asset.
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Bitcoin
A decentralized digital currency created in 2009, based on blockchain technology and operating independently of a central bank.
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Bitcoin Cash
A peer-to-peer electronic cash system that emerged as a result of a hard fork from the original Bitcoin blockchain. It shares many similarities with Bitcoin but has increased block size capacity.
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Blockchain
A decentralized and transparent digital ledger that records transactions across multiple computers. It serves as the foundation for cryptocurrencies, allowing secure and tamper-proof record-keeping.
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Bollinger Bands
A technical analysis tool consisting of a moving average and two standard deviation bands. It helps identify price volatility, potential trend reversals, and periods of price contraction or expansion.
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Breakout
A technical analysis term referring to a price movement that breaks through a previously established support or resistance level, often accompanied by increased volatility and trading volume.
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Broker
An individual or firm that facilitates the buying and selling of financial instruments on behalf of clients, typically charging a commission or spread for their services.
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Bull Market
A market condition characterized by rising prices, optimism, and a general upward trend in the financial markets.
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Buy Order
An instruction from a trader to a broker to purchase a specified quantity of an asset at a specified price or better.
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Candlestick Chart
A type of financial chart used to represent the price movement of an asset. Each candlestick displays the open, high, low, and close prices for a specific time period.
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Carry Trade
A trading strategy where investors borrow funds in a low-interest-rate currency to invest in assets denominated in a higher-interest-rate currency, aiming to profit from the interest rate differential.
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Central Bank
A financial institution responsible for managing a country’s money supply, implementing monetary policy, and regulating the banking system. It plays a crucial role in influencing interest rates, controlling inflation, and stabilizing the economy.
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Chart
A graphical representation of data, often used in financial analysis to visualize price movements and trends over time.
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Close
The final trading price of an asset at the end of a trading session or a specific time period.
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Commission
A fee charged by a broker or financial institution for executing trades or providing investment services. It can be a fixed amount or a percentage of the trade value.
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Commodities
Marketable goods or primary products, such as energy, metals, and agricultural products, traded in financial markets.
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Consumer Price Index
A measure of average price changes in a basket of goods and services commonly purchased by households. It is used to gauge inflation and assess changes in the cost of living.
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Contract
In the commodities market, traders make use of contracts to engage in asset trading. Contracts provide a standardized framework and simplified approach for speculation purposes.
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Contract For Difference (CFD)
A financial derivative product that allows traders to speculate on the price movements of an underlying asset without owning the asset itself. Traders can profit from both rising and falling markets by entering into a contract with a counterparty to exchange the difference between the asset’s opening and closing prices.
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Correlation
Correlation in trading quantifies the connection between two assets. A positive correlation implies that Security B tends to move in the same direction as Security A, while a negative correlation suggests opposite movements.
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Crude Oil Inventories
Crude oil inventories refer to the quantities of crude oil, gasoline, and distillate held within a country’s inventory.
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Cryptocurrency
A digital or virtual currency that uses cryptography for security and operates independently of a central bank. Cryptocurrencies rely on blockchain technology to enable secure transactions and control the creation of new units. Examples include Bitcoin, Ethereum, and Ripple.
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Currency Pair
A currency pair comprises a base currency and a quote currency (or counter currency) and is used to determine the exchange rate between two currencies for trading purposes.
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Currency Risk
Currency risk refers to the potential negative impact resulting from fluctuations in exchange rates. It introduces uncertainty and the possibility of adverse effects in transactions involving different currencies.
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Day Trading
A trading strategy where traders open and close positions within the same trading day, aiming to profit from short-term price fluctuations.
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Deflation
A sustained decrease in the general price level of goods and services in an economy over time. Deflation is often accompanied by reduced economic activity and can have significant impacts on debt, investment, and monetary policy.
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Derivative
A financial instrument whose value is derived from an underlying asset or group of assets. Derivatives can be used for hedging, speculation, or arbitrage purposes. Examples include futures contracts, options, and swaps.
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Dollar Cost Averaging
An investment strategy where an investor regularly invests a fixed amount of money into a particular asset or portfolio, regardless of the asset’s price. The strategy aims to reduce the impact of short-term market fluctuations by spreading out investments over time.
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Double Bottom
Chart pattern utilized in technical analysis. It involves an initial drop in price, followed by a minor rebound, a subsequent second drop to a similar level, and finally, a substantial recovery resembling the letter ‘W’.
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Dow Jones Industrial Average (DJIA)
A stock market index that represents the performance of 30 large publicly traded companies in the United States. The DJIA is often used as a barometer of the overall health of the U.S. stock market and economy.
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Economic Indicators
Economic indicators are statistical measures or data points that offer insights into the overall performance of an economy. They act as valuable indicators, potentially influencing the value of assets by reflecting the country’s economic health.
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Elliott Wave Theory
A technical analysis approach that attempts to predict future price movements by identifying recurring patterns and wave structures in financial charts. It suggests that markets move in repetitive cycles of bullish and bearish waves, which can be used to make trading decisions.
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Ethereum
A decentralized blockchain platform that enables the creation and execution of smart contracts and decentralized applications (DApps). It has its own cryptocurrency called Ether (ETH), which serves as both a digital currency and fuel for running applications on the Ethereum network.
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European Central Bank
The European Central Bank (ECB) functions as the central bank for the euro, the common currency of the European Union. Its primary objective is to ensure price stability and maintain the purchasing power of the euro within the eurozone. The eurozone comprises both EU and non-EU countries that have adopted the euro.
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Exchange
A platform or marketplace where financial instruments, such as currencies, stocks, commodities, or cryptocurrencies, are traded. It provides a centralized location for buyers and sellers to conduct transactions.
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Exchange Rate Risk
Exchange rate risk pertains to the potential financial loss that may arise from unfavorable movements in exchange rates. It represents the vulnerability to adverse fluctuations in currency values.
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Exotic Currency
Exotic currencies refer to currencies that are less commonly traded or are not part of the major currency group. These currencies typically belong to smaller economies and may have lower trading volumes and liquidity.
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Fibonacci Channel
A Fibonacci channel is a technical analysis tool used to forecast potential levels of support and resistance in financial markets. It relies on identifying patterns of peak and valley formations to make informed projections about future trend reversals. To effectively utilize Fibonacci channels, traders must accurately identify significant peaks and valleys. Once these key points are determined, support and resistance lines can be projected into the future, providing insights for upcoming weeks and months. It is important to consider only significant tops and bottoms as the foundation for the channel, incorporating one or more notable price swings. The widest swing within the chosen time frame is used as a trigger line.
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Forex
Short for foreign exchange, it refers to the global decentralized market where currencies are traded against each other. Forex is the largest and most liquid financial market in the world, with participants including banks, financial institutions, corporations, and individual traders.
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Forward Deal
A forward deal refers to a financial transaction where the settlement date is scheduled beyond the spot value date. It involves an agreement to buy or sell an asset at a future date, allowing market participants to manage risk or take advantage of anticipated price movements. Forward deals are commonly used by investors and businesses to hedge against volatility and secure future transactions at predetermined terms. These deals offer flexibility in terms of timing and pricing, providing opportunities to mitigate potential risks or capitalize on favorable market conditions.
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Fundamental Analysis
A method of analyzing financial markets by examining economic, social, and political factors that may affect the supply and demand of an asset. It involves assessing qualitative and quantitative data to determine the intrinsic value of an asset and make investment decisions based on its perceived worth.
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Futures Contract
A standardized financial contract between two parties to buy or sell an asset at a predetermined price and date in the future. Futures contracts are commonly used for hedging and speculative purposes in commodities, currencies, and financial markets.
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Gap
A gap arises when a market swiftly shifts from one correctly quoted price to another, significantly different and correctly quoted price. Gaps can result from diverse factors, including economic data, company announcements, political events, natural disasters, and more. However, the impact is that the execution of a stop loss, limit, or new order may occur at a level different from the price requested by the trader.
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Gas
Transaction processing fee within the Ethereum network. It functions as a metering unit for operations performed on the EVM. Gas units are fixed quantities determined by the computational requirements and are paid in ether using GWei as the designated denomination.
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Gold
Valuable commodity utilized in jewelry and a variety of electronic products and equipment due to its conductivity, malleability, and durability. It was historically used as a standard for monetary exchange but was discontinued with the establishment of the fiat system in the US in 1971.
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Gross Domestic Product
The total economic value of goods and services produced within the borders of the United States, regardless of asset ownership or labor nationality. GDP growth is measured in real terms, excluding the impact of inflation on output growth.
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Hedge Funds
Hedge funds are investment vehicles managed by professional portfolio managers. They utilize aggressive investment strategies with the goal of achieving high investor returns. Despite their name, hedge funds focus on maximizing profits for investors. They have the flexibility to trade various financial instruments in the foreign exchange market, including spot contracts, futures contracts, and swaps.
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Hedging
A risk management strategy used to reduce or offset the potential losses from adverse price movements in an asset. It involves taking an opposing position or entering into a financial contract that acts as a hedge against an existing position. The goal is to minimize potential risks and protect against volatility.
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Hyperinflation
A state of economic turmoil characterized by a rapid surge in price levels as a country’s currency rapidly depreciates. This often happens when there is an extensive growth in the money supply that surpasses the growth of the gross domestic product (GDP), leading to an imbalance in the supply and demand for money.
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Index
An index tracks stock performance in a specific market segment.
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Inflation
A sustained increase in the general price level of goods and services in an economy over time. Inflation erodes the purchasing power of money and can have various economic impacts, including changes in interest rates, consumer spending, and investment behavior.
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Initial Coin Offering (ICO)
A fundraising method used by startups and projects in the cryptocurrency industry. It involves issuing and selling tokens or digital assets to investors in exchange for funding. ICOs are often conducted in the early stages of a project and provide investors with the opportunity to support and gain early access to the project’s products or services.
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Initial Margin
Initial margin is a collateral deposit for trades.
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Interest Rate
The cost of borrowing or the return on investment expressed as a percentage. It is the rate at which interest is charged or paid on a loan, deposit, or investment. Interest rates play a crucial role in determining the cost of capital, investment decisions, and economic growth.
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Interest Rate Differential
Interest rate differential is the variance in rates between currencies.
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Interest Rate Risk
Interest rate risk is the potential for losses from rate fluctuations.
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Investment
Process of allocating money in the economic market.
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Japanese Yen
Currency used in Japan, widely traded (JPY).
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Key Pair
Combination of private and public keys in cryptography.
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Leverage
Ratio of transaction amount to required deposit, magnifying investment.
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LIBOR
London Inter-Bank Offered Rate, widely adopted as a reference rate.
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Limit Order
An instruction from a trader to a broker to buy or sell an asset at a specific price or better. A limit order sets a price limit at which the trade should be executed, ensuring that the trade is only executed if the market reaches the specified price.
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Liquidity
The ease with which an asset can be bought or sold without causing significant price movements. High liquidity indicates a large number of buyers and sellers in the market, making it easier to execute trades at favorable prices. Low liquidity can lead to wider bid-ask spreads and increased price volatility.
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Litecoin
Cryptocurrency created by Charlie Lee in 2011, similar to bitcoin.
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Long Position
Profitable position as market price rises.
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Lot
Unit of measurement for transaction volume.
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MACD
Moving Average Convergence/Divergence, technical analysis indicator.
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Margin
Initial collateral deposit for a position or forex trade.
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Margin Call
Request for additional funds to cover open trade positions.
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Market Order
An instruction from a trader to a broker to buy or sell an asset at the best available price in the market. Market orders are executed immediately at the prevailing market price, regardless of the specific price level.
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Momentum
Rate of change in asset price, used to assess market strength.
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Monetary Policy
Measures by which a monetary authority controls money supply.
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Moving Average
A commonly used technical analysis indicator that calculates the average price of an asset over a specific period. It smooths out price fluctuations, making it easier to identify trends and potential reversal points. Moving averages are available in different forms, such as simple moving average (SMA) and exponential moving average (EMA).
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NEM
Cryptocurrency and platform for managing various assets.
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Net Position
Cumulative currency bought or sold without offsetting trades.
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Nonfarm Payroll Employment
Estimation of payroll jobs at nonfarm businesses and government agencies.
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Open Position
Active trade that has not been closed.
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Options
Derivative contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a specific time period. Options are used for speculation, hedging, and risk management. There are two main types of options: call options, which provide the right to buy, and put options, which provide the right to sell.
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Overnight Position
Position held overnight, extending into the next trading day.
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Over The Counter
Market conducted directly between dealers without a centralized exchange.
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Penny Stocks
Stocks of small-cap companies with low market capitalization and relatively low share prices. Penny stocks are often considered speculative and carry a higher level of risk due to their limited liquidity, volatility, and potential for manipulation.
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Pip
Smallest unit of change in a currency pair’s exchange rate.
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Portfolio
A collection of financial assets, such as stocks, bonds, commodities, or cryptocurrencies, held by an individual or an entity. Portfolios are managed to achieve specific investment goals, diversify risk, and optimize returns.
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Position
Exposure in a currency, representing flat, long, or short positions.
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Price Action
Movement of security prices displayed in charts and graphs.
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Producer Price Index
Monthly report on purchasing prices of consumer goods.
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Quote Currency
Second currency in a currency pair.
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Real Estate Investment Trust (REIT)
A company that owns, operates, or finances income-generating real estate properties. REITs allow individuals to invest in real estate without directly owning properties. They distribute a significant portion of their taxable income to shareholders in the form of dividends, providing investors with a way to access real estate returns and diversify their investment portfolios.
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Relative Strength Index
Indicator measuring price strength in technical analysis.
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Resistance Level
A price level in technical analysis where an asset’s upward price movement is expected to face selling pressure, causing the price to potentially stall or reverse. Resistance levels are areas where supply outweighs demand, and traders may consider selling or taking profit positions.
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Retail Sales
Total sales estimate of goods by retail establishments.
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Reward-To-Risk Ratio
Comparison of expected returns to predetermined risk of loss.
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Ripple
Cryptocurrency and payment platform for global transfers.
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Risk Capital
Amount of money subject to potential loss in an investment.
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Risk Management
The process of identifying, assessing, and mitigating potential risks to minimize losses and protect against adverse events. It involves implementing strategies and measures to monitor, control, and mitigate risks associated with investments, operations, and financial activities. Effective risk management aims to optimize risk-reward trade-offs and protect the capital invested.
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Scalping
Short-term trading strategy aiming for small profits from rapid trades.
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Securities and Exchange Commission (SEC)
A regulatory agency in the United States responsible for enforcing federal securities laws and regulating the securities industry. The SEC aims to protect investors, maintain fair and efficient markets, and facilitate capital formation. It oversees securities exchanges, brokers, investment advisers, and public companies, among others, and ensures compliance with disclosure requirements and other regulatory obligations.
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Sell Order
Instruction to sell an asset at a downward price direction.
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Short Position
Position where the base currency is sold, profiting from price declines.
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Short Selling
A trading strategy where an investor sells borrowed assets, such as stocks or commodities, with the expectation that their prices will decline. The investor aims to repurchase the assets at a lower price to return them to the lender, profiting from the price difference. Short selling allows traders to profit from falling markets but carries risks, as losses can be theoretically unlimited if the asset price rises significantly.
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Slippage
Deviation between expected and actual fill price of a trade.
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Spot Price
Current market price of an asset.
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Spread
Difference between the bid and ask price of an asset.
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Stochastic
Indicator comparing closing prices to high and low prices over a period.
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Stock Market
A marketplace where buyers and sellers trade shares or ownership stakes in publicly traded companies. The stock market provides companies with access to capital and investors with the opportunity to buy and sell stocks to potentially earn returns. It plays a crucial role in capital formation and economic growth.
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Stop-Loss Order
An order placed by a trader to automatically sell an asset if its price reaches a predetermined level. Stop-loss orders are used to limit potential losses by triggering a sale when the market moves against the trader’s position. They help manage risk and protect investments during periods of market volatility.
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Strike Price
Price at which an option contract is initiated.
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Swap
Simultaneous buying and selling of a currency at a forward exchange rate.
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Swing Trading
Trading strategy involving short-term positions held for more than a day.
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Take Profit
Instruction to automatically close a position once a certain profit level is reached.
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Technical Analysis
A method of analyzing financial markets based on historical price and volume data. Technical analysts use charts, patterns, and indicators to identify trends, price levels, and potential trading opportunities. It assumes that historical price patterns and market behavior can help predict future price movements.
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Tick
Smallest price movement, upward or downward.
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Trading Alerts
Signals or notifications suggesting potentially profitable assets and directions.
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Trading Volume
Total amount of assets traded during a specific period.
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Trendline
Line connecting high or low prices, indicating a trend.
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Unemployment Rate
Percentage of unemployed individuals in the workforce.
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U.S. Department Of The Treasury
Government agency responsible for managing the nation’s finances.
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Volatility
A measure of the degree of price fluctuations or variability of an asset or market over a specific period. Volatility indicates the potential for rapid and significant price changes and is often used as a risk indicator. Higher volatility implies higher risk and potential returns, while lower volatility suggests a more stable and less risky market environment.
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Wallet
Secure storage method for cryptocurrencies.
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World Bank
Group of international financial organizations aiding member countries.
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Yield
The return on an investment, usually expressed as a percentage, based on the income generated or the price appreciation of the investment. Yield can refer to various types of returns, such as dividend yield, bond yield, or overall portfolio yield.
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Yield Curve
A graphical representation of interest rates or yields of bonds or other fixed-income securities plotted against their respective maturities. The yield curve shows the relationship between short-term and long-term interest rates and can provide insights into market expectations, economic conditions, and potential changes in monetary policy. Different shapes of the yield curve, such as upward-sloping, flat, or inverted, can signal different market conditions and expectations.
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Zig Zag
A technical analysis tool used to filter out market noise and highlight significant price movements. The Zig Zag indicator connects swing highs and swing lows on a price chart, smoothing out minor fluctuations and emphasizing larger price trends. It helps traders identify potential trend reversals or significant price movements. The Zig Zag indicator can be customized based on the percentage or point movements required to form a new swing high or swing low.