Vertical integrationVertical integration is when two businesses at different stages of production join to form one bigger company. Velocity of moneyThe health of an economy can be measured by capturing the speed at which the money available in it (the money supply) is being spent. Trade surplusWhen a country’s exports exceed its imports, it is said to have a positive balance of trade, or trade surplus.
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A risk management approach where assets are gradually sold or liquidated to meet specific financial objectives or reduce exposure. A financial metric representing the difference between a company’s current assets and current liabilities. A market condition where an asset’s price moves sharply in one direction and then reverses suddenly, often leading to trader losses. The process of determining the current worth of an asset, company, or investment. The total number of shares, contracts, or lots traded for a security or asset within a specific timeframe. Higher volatility indicates greater price swings, presenting both risks and opportunities for traders.
These statistics reflect performance in both a simulated trading environment and a live trading environment and are not indicative of future results. The Funded Level includes both Express Funded Accounts and Live Funded Accounts, with the aggregate of such accounts used in the percentage determination. For example, the ability to withstand losses or adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. Simulated trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. Unlike an actual performance record, simulated results do not represent actual trading. The past performance of a financial product does not guarantee future results or returns.
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Moving averageA moving average of a share price is simply the average of the share prices of the last so many days. Money launderingMoney laundering is a catch-all term for any activity that tries to convert the proceeds of crime into legitimate money. Mean reversionMean reversion is the tendency for a number – say, the price of a house or a share – to return to its long-term average value after a period above or below it.
- Investors may adjust their asset allocation over time to align with changing financial goals or market conditions, ensuring their portfolios remain diversified and aligned with their objectives.
- The first definition refers to share prices.
- Stock market – see full definition
- Understanding risk tolerance helps in creating the right investment strategy.
- An iceberg order for 100,000 shares might only show 1,000 shares at a time to avoid revealing the full size.
Pros of Swing Trading:
It is an essential tool for traders and investors to gauge the liquidity and trading activity of a particular asset. A swing low forms when the asset’s price makes a lower low compared to previous price bars and is followed by a higher low, signaling a potential shift in market sentiment. Futures exchanges provide a transparent and regulated environment for trading commodities, financial instruments, and various other assets. These levels are essential for traders as they provide insights into intraday price volatility and can help identify potential support and resistance levels for future trading decisions.
Fundamental analysis definition
It is a fundamental principle of portfolio management and helps investors achieve a balance between potential returns and risk, ultimately aiming for a more stable and resilient investment portfolio. By diversifying their portfolios, traders aim to minimize the impact of poor performance in one asset on their overall investment returns. Derivatives can be complex and carry significant risks, making them suitable for experienced traders and investors who understand their intricacies. They provide access to financial markets, research, and trading platforms, making it easier for individuals and institutions to participate in trading activities. Bonds are considered less risky than stocks because they offer fixed income payments and a predetermined maturity date.
- The income statement shows a company’s revenues, expenses, and net income over a period of time.
- You should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets.
- It is used to assess the impact that a rise or fall in interest rates can have on a bond’s price – which highlights a bond holder’s exposure to risk.
- Repeating the same steps every day builds discipline, strengthens focus, and helps you trade with more control.
- Jonathan Rose is a veteran trader and educator with more than two decades of experience navigating the fast-paced world of professional trading.
The amount and frequency of dividend payments vary from company to company and are often determined by the company’s financial performance and management decisions. They are used for various purposes in trading, including hedging against price fluctuations, speculating on future price movements, and managing risk. Day trading requires a deep understanding of the market, a well-defined strategy, and risk management, as it can be highly volatile and may result in significant gains or losses. Short-term capital gains apply to assets held for a year or less, while long-term gains apply to assets held for more than a year.
Forex Terminology
It can sometimes also be referred to as a fixed exchange rate, or pegging. Crystallisation is the term used when a trader or business closes a position and then reopens an identical position immediately. It is used to assess the impact that a rise or fall in interest rates can have on a bond’s price – which highlights a bond holder’s exposure to risk. Contracts for difference, or CFDs, are a type of financial derivative used in CFD trading.
Traders use resistance levels to gauge potential areas where an asset may encounter obstacles and reverse its upward movement. Traders use moving averages to identify trends, potential reversals, and areas of support and resistance on price charts, making them an essential tool for technical analysis. Traders calculate moving averages by taking the average price of an asset over a set number of periods, such as days or weeks. Traders should use market orders with caution and consider other order types, such as limit orders, when precise price execution is crucial. Market orders prioritize execution speed over price, and as such, they are guaranteed to be filled, but the actual price may vary slightly from the current quoted price due to market fluctuations. Hedging can be accomplished using various financial instruments, such as options, futures contracts, and derivatives.
However, the price subsequently reverses and heads downward, trapping these bullish traders in losing positions. They aim to profit from the anticipated price movements that occur during this time frame, often relying on technical and fundamental analysis to make trading decisions. Unlike day traders who close their positions within the same trading day, swing traders hold positions for several days to weeks. It is designed to measure Trading Terminology the relative strength or weakness of a financial asset by analyzing the magnitude of recent price changes.
Share price definition
A style of trading that attempts to capture gains in a market within a period of one day to a week. A price level where a currency’s price has difficulty falling below. These are specific price levels or price areas on a trading chart that can signify the continuation or change of a trend. This is contrasted with the futures market, where such commodities are traded for future delivery. When a trade is executed at a different price than expected.
A rise or decline in EPS can significantly affect the share price. It’s a direct reflection of a company’s earning power. They’re especially rare for penny stock companies since they rarely make consistent profits.
A derivative strategy where traders speculate on the direction of an asset’s price movement without owning the underlying asset. A trading strategy where an investor borrows an asset, sells it at the current market price, and aims to repurchase it later at a lower price. Share prices fluctuate based on market supply, demand, and company performance.
A type of price chart that displays the high, low, open, and closing prices of a security for a specific period. The amount of money available in a trading account to purchase securities, including cash and margin availability. Investors are bullish on renewable energy stocks due to increasing government support and adoption. A prolonged period of rising prices and investor optimism, typically characterized by 20% or greater gains from recent lows.
Margin is only for trades to settle immediately, not for trading borrowed $ This is often where traders have already amassed a reasonable amount of capital. You are buying a contract to buy x number of shares of a stock.
Identifying the beginning and end of trends is a key part of market analysis. When a market is making a clear, sustained move upwards or downwards, it is called a trend. Treasury stock – see full definition
They are often used by conservative investors seeking stable returns. The total monetary value of all finished goods and services produced within a country’s borders in a specific time period. A professional responsible for managing an investment portfolio on behalf of clients. Unlike futures, forward contracts are traded over-the-counter (OTC) and are not standardized.