Glossary of Financial Terms

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Retirement savings plan sponsored by an employer (USA).

Tax-advantaged savings plan for education (USA).

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Automated Clearing House - An electronic network for processing financial transactions, including direct deposits and bill payments, in the U.S.

American Depositary Receipt - A negotiable certificate issued by a U.S. bank representing shares in a foreign company, allowing Americans to trade foreign stocks on U.S. exchanges.

Asia Kill Zone- The period of low volatility and low volume trading during Asian market hours, often used as a reference point for setups in forex and futures markets.

After Market Close - The period of trading that occurs after the regular market session ends.

Accumulation Manipulation Distribution – A price action model (popularized by ICT) where markets accumulate orders, manipulate liquidity, and then distribute in the intended direction.

American Stock Exchange - A former major U.S. stock exchange, now part of the NYSE, known for trading small-cap stocks, options, and ETFs.

Annual Percentage Rate - The annual cost of borrowing or earning expressed as a percentage, including interest and fees.

Annual Percentage Yield - The annual return on an investment, considering the effect of compounding interest.

Accounts Receivable - Money owed to a company by its customers for goods or services delivered but not yet paid for.

The lowest price at which a seller is willing to sell a security.

All Time High - The highest price ever reached by a security, index, or other financial instrument during its trading history.

Average True Range - A technical indicator that measures market volatility by averaging the range between the high and low prices over a specific period.

Assets Under Management - The total market value of investments that a person or entity manages on behalf of clients.

Anchored Volume-Weighted Average Price - A technical indicator that shows the average price of a security, weighted by volume, from a specific starting point or "anchor."

An order that must be fully executed or not executed at all, without partial fills.

Paying off a loan over time with fixed payments covering principal and interest—debt’s slow goodbye!

The consolidation price range formed during the Asian trading session, often used as a reference for breakouts in London or New York sessions.

The number of shares a seller is offering to sell at the ask price.

Any resource with economic value that is owned by an individual, corporation, or government, with the expectation that it will provide future benefit. Examples include cash, stocks, real estate, and intellectual property.

The strategy of dividing an investment portfolio among different asset categories, such as stocks, bonds, and cash, to balance risk and reward.

At The Money (Option) - An option whose strike price is equal to or very close to the current market price of the underlying asset.

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Break-Even - The point at which total revenues equal total costs, resulting in neither profit nor loss; in trading, it's the price at which an investment or trade recoups its initial cost.

Breakout and Retest - A price action pattern where an asset breaks through a key support or resistance level and then "retests" that level before continuing in the breakout direction. *Also Break Above Resistance.

The price buyers are willing to pay for a stock.

Difference between the bid and ask price.

Before Market Open - The time period before the regular trading session begins.

Breakout - A breakout occurs when the price of a financial asset moves above a resistance level or below a support level with increased volume, signaling potential for further price movement in the direction of the breakout.

Bank of Canada - The central bank of Canada, responsible for setting the country's monetary policy, issuing currency, and maintaining financial stability, including managing inflation and interest rates.

Bollinger Bands - A technical analysis tool using a set of three lines (a moving average and two standard deviations) to identify potential overbought or oversold conditions in a market.

Break of Structure – Occurs when price breaks a significant high or low, signaling a potential shift in market structure and trend direction.

Buying Power - The total amount of capital available for a trader to buy securities, including both cash and any margin or leverage provided by a brokerage.

Basis Points - A unit of measurement equal to 0.01%, used to describe changes in interest rates, bond yields, or other financial percentages.

Buy Side Imbalance – An area on the chart where aggressive buying left behind inefficiency or imbalance in price, often used as a target for retracement.

Buy Side Liquidity – Liquidity resting above recent highs, where stop-loss orders from short sellers and breakout buy stops accumulate.

The process of testing a trading strategy using historical data to evaluate its potential effectiveness.

A bearish continuation pattern in technical analysis that forms after a sharp downward move, followed by a brief upward consolidation within a narrow, upward-sloping range (resembling a flag), indicating the potential for another downward breakout.

A market condition characterized by a decline of 20% or more in asset prices over a sustained period, often associated with widespread pessimism and negative investor sentiment.

A bearish continuation pattern in technical analysis that appears after a strong downward price move, followed by a brief consolidation in a small, symmetrical triangle shape (resembling a pennant), indicating potential for another downward breakout.

A fake dip that tricks short sellers—watch out, it bites back up!

A standard or point of reference, such as a market index like the S&P 500, used to measure the performance of an investment, portfolio, or fund.

Measure of a stock's volatility relative to the market.

The number of shares a buyer is willing to purchase at the bid price.

Stock of a large, stable, and financially sound company.

A fixed-income investment representing a loan made by an investor to a borrower, typically a corporation or government.

Total value of a company’s assets minus liabilities.