TERMINOLOGY CHEAT SHEET

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A-B

TERMINOLOGY CHEAT SHEET

Accumulation A phase where buyers are dominating, usually preceding a bullish move.

Advance/
Decline Line A technical indicator that represents the cumulative difference between advancing and declining stocks.

Arbitrage The simultaneous purchase and sale of an asset to profit from an imbalance in the price.

Ask Price The lowest price a seller is willing to accept for an asset.

Asset Class A category of assets, such as stocks, bonds, commodities, or currencies.

ATR (Average True A technical analysis indicator that measures market volatility by decomposing the entire range of an asset price for that period.
Range)

Base Currency The first currency listed in a currency pair.

Bearish Market A market condition where prices are falling.

Bid Price The highest price a buyer is willing to pay for an asset.

Break of Structure A pivotal point where the market structure shifts, indicating a change in trend.

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B-C

TERMINOLOGY CHEAT SHEET

Broker An individual or firm that arranges transactions between a buyer and a seller for a commission.

Brokerage A firm that acts as an intermediary between a buyer and seller, and charges a commission for its services.

Bullish Market A market condition where prices are rising.

Candlestick
Chart patterns used in technical analysis to predict future market movements.
Patterns

Channel A range between support and resistance levels within which prices tend to fluctuate.

CFD (Contract for A contract between two parties to exchange the difference in the value of an asset from the time the contract is opened to when it is
Difference) closed.

Commodities Basic goods used in commerce that are interchangeable with other goods of the same type, such as gold, silver, oil, etc.

Compression A phase where price movements narrow, often leading to a breakout.

Consolidation A market phase where prices move sideways, indicating indecision among buyers and sellers.

Currency Pair The quotation of two different currencies, with the value of one currency being quoted against the other.

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D-E-F

TERMINOLOGY CHEAT SHEET

Day Trading The practice of buying and selling financial instruments within the same trading day.

Demand The level of interest from buyers in purchasing an asset.

Distribution A phase where sellers are dominating, usually preceding a bearish move.

Double
Chart patterns indicating potential reversal points, characterized by two peaks or troughs at similar levels.
Top/Bottom

Drawdown A decline in the value of an account from its peak to its lowest point over a specific period.

A state where supply and demand are balanced, often leading to consolidation.
Equilibrium

Equity The value of an owner's interest in an asset after deducting liabilities.

Execution The process of completing an order to buy or sell a financial instrument.

Expansion A phase where the market is moving in a clear direction, either bullish or bearish.

False Breakout A situation where the price moves beyond a support or resistance level but fails to maintain momentum.

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F-G-H-I

TERMINOLOGY CHEAT SHEET

Forex The global marketplace for trading national currencies against one another.

Fractal Nature The concept that market patterns repeat on different timeframes.

Fundamental
A method of evaluating an asset by examining related economic, financial, and other qualitative and quantitative factors.
Analysis
Futures A legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future.
Contract

Gap A discontinuity in a security's price chart where no trading occurs.

GDP (Gross The total value of goods produced and services provided in a country during one year.
Domestic Product)

Head and Shoulders A reversal pattern that signals a change in trend direction.

Hedge An investment made to reduce the risk of adverse price movements in an asset.

Impulse A strong move in the direction of the trend.

Inducement A false move designed to mislead traders about the market direction.

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I-L-M

TERMINOLOGY CHEAT SHEET

Internal Structure The detailed movements within the main trend, including smaller trends and retracements.

Inflation The rate at which the general level of prices for goods and services rises, eroding purchasing power.

Index A statistical measure of the changes in a portfolio of stocks representing a portion of the overall market.

Leverage The use of borrowed funds to increase the potential return of an investment.

Liquidity The degree to which an asset can be quickly bought or sold without affecting its price.

Lower Highs/Lower
A series of descending peaks and troughs indicating a bearish trend.
Lows

Main Push The primary movement in the direction of the trend.

The amount of money required to open a position, which acts as a good faith deposit to ensure you can cover
Margin
potential losses.

Margin Call A demand by a broker that an investor deposits additional money to cover potential losses.

Market Order An order to buy or sell a security immediately at the best available current price.

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M-P-Q

TERMINOLOGY CHEAT SHEET

Market Structure The overall arrangement of market phases and price movements.

MetaTrader A popular trading platform used by traders for online trading in the forex, CFD, and futures markets.

Moving Average A widely used indicator in technical analysis that helps smooth out price action by filtering out the noise from random
price fluctuations.
Multi-Timeframe
Analyzing multiple timeframes to get a holistic view of the market.
Analysis

Pip The smallest price move that a given exchange rate can make based on market convention. In most currency pairs, a pip
is the fourth decimal place (0.0001).

Position The amount of a particular security, commodity, or currency held by an individual or entity.

Price Action The movement of a security's price over time.

Pro Trend Move A move that aligns with the overall market trend.

Pullback A temporary reversal in the direction of the main trend, also known as a retracement.

Quote Currency The second currency listed in a currency pair.

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R-S

TERMINOLOGY CHEAT SHEET

Range The area between the highest and lowest prices over a period.

Resistance A price level where selling pressure tends to prevent further price increases.

Retracement A temporary reversal in the direction of the main trend.

Reversal A change in the direction of the market trend.

Risk The process of identification, analysis, and either acceptance or mitigation of uncertainty in investment decision-making.
Management

Scalping A trading strategy focused on making small, quick profits from minor price movements.

Spread The difference between the bid and the ask price of a security or asset.

An order placed with a broker to buy or sell once the stock reaches a certain price, used to limit an investor's loss on a position.
Stop Loss

Support A price level where buying pressure tends to prevent further price decreases.

Swing High/Swing
The peaks and troughs formed by price movements, indicating potential reversal points.
Low

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S-T-V-Y

TERMINOLOGY CHEAT SHEET

A style of trading that attempts to capture gains in a stock (or any financial instrument) within an overnight hold to several weeks.
Swing Trading

Take Profit An order to sell a security once it reaches a certain level of profit.

Technical An analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.
Analysis

Trend The general direction in which the market is moving.

Trend Alignment
When multiple timeframes indicate the same market direction.

Tug of War The ongoing battle between buyers and sellers in the market.

Volume The number of shares or contracts traded in a security or market during a given period.

Volatility The degree of variation of a trading price series over time, measured by the standard deviation of returns.

Yield The income return on an investment, such as the interest or dividends received.