Glossary of Financial Terms

Long Term - A term used to describe investments or financial strategies that are intended to be held for an extended period, typically more than one year, focusing on growth or value appreciation over time.

Refers to companies with a market capitalization of $10 billion or more, typically considered to be more stable and less risky investments due to their established presence in the market.

A market data feed that provides detailed information about the order book, including the prices and sizes of buy and sell orders beyond just the best bid and ask prices, allowing traders to see market depth and liquidity.

The use of borrowed capital to increase the potential return on investment, allowing investors to control a larger position than they could with their own funds alone.

An exchange-traded fund that uses financial derivatives and debt to amplify the returns of an underlying index, typically offering 2x or 3x the daily performance, but it is best suited for short-term trading due to the effects of daily compounding on long-term returns.

A financial obligation or debt that an individual, corporation, or government owes to another party, expected to be settled through the transfer of money, goods, or services. Examples include loans, accounts payable, and mortgages.

An order to buy or sell a security at a specified price or better, ensuring that the trader does not pay more than intended or receive less than desired.

Assets that can be quickly and easily converted into cash without significantly affecting their market price, such as cash, stocks, and bonds as opposed to assets that need to be sold, such as real estate, collectibles, or machinery.

The ease with which an asset can be bought or sold in the market without affecting its price, indicating how quickly an asset can be converted into cash.

A market move, typically sudden and intentional, designed to trigger stop-loss orders and entice traders into taking positions, thereby increasing liquidity. This move often precedes a reversal, as large players take advantage of the increased liquidity to enter or exit substantial positions at more favorable prices.

A collection of funds locked in a smart contract that provides liquidity for trading pairs on decentralized exchanges, enabling users to buy and sell assets without significant price slippage.

The original amount of money borrowed in a loan, excluding interest and any additional fees.

A trading position where a trader buys an asset with the expectation that its price will rise, aiming to sell it at a higher price for a profit.

Refers to a stock with a small number of shares available for public trading, which can lead to higher volatility and price fluctuations due to limited supply.

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Moving Average - A statistical calculation used in technical analysis to smooth out price data over a specific period, helping to identify trends by filtering out noise from random price fluctuations.

Moving Average Convergence Divergence - A trend-following momentum indicator that shows the relationship between two moving averages of a security’s price, used to identify potential buy and sell signals.

Management Expense Ratio - A measure of the total costs associated with managing an investment fund, expressed as a percentage of the fund's average net assets.

Market Maker - A firm or individual that actively quotes two-sided markets in a financial instrument, providing liquidity by being ready to buy and sell at publicly quoted prices.

Market on Close - An order that is executed at the market price at the end of the trading day, typically used to buy or sell securities just before the market closes.

Month-Over-Month - A financial comparison that measures the performance of a metric over a one-month period, often used to evaluate short-term trends or changes in sales, expenses, or other financial indicators.

Market on Open - An order to buy or sell a security at the market price at the beginning of the trading session, executed as soon as the market opens.

Market Structure – The overall framework of price action that shows how markets move in trends (higher highs and lows, or lower highs and lows).

Market Structure Shift – A key reversal signal where the market breaks structure in the opposite direction, often indicating a trend change.

Mean Threshold – A reference point in ICT concepts, typically the midpoint of a price move, used to identify fair value or equilibrium.

Borrowed funds provided by a broker to increase the buying power of a trader’s account, allowing them to take larger positions than they could with their own capital alone. Margin can amplify both gains and losses, and it requires maintaining a minimum account balance known as the margin requirement.

A broker's demand for a trader to deposit additional funds or securities into their margin account to meet the minimum margin requirement, triggered when the account's equity falls below the required level due to trading losses. Failure to meet a margin call can result in the broker liquidating positions to restore the required balance.

The minimum amount of equity that a trader must maintain in their account when using margin, expressed as a percentage of the total trade value. It ensures traders have sufficient funds to cover potential losses and varies by broker, asset type, and market conditions.

Market Capitalization - The total market value of a company's outstanding shares of stock, calculated by multiplying the share price by the total number of shares.

A decline of 10% or more in the price of a financial asset or index from its recent peak, often seen as a natural pullback in an overall upward trend.

A measure of the supply and demand for a security, displayed as the number of buy and sell orders at different price levels, indicating the market's ability to absorb large orders without significantly affecting the price.

An order to buy or sell a security immediately at the current market price, guaranteeing execution but not the exact price.

Refers to companies with a market capitalization typically between $2 billion and $10 billion, often considered to have a balance of growth potential and stability.

A type of savings account that typically offers higher interest rates and limited check-writing capabilities, while requiring a higher minimum balance than standard savings accounts.

A loan specifically used to purchase real estate, where the property serves as collateral for the loan, typically requiring regular payments of principal and interest over a set period.

An investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities, managed by professional portfolio managers.

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The National Association of Securities Dealers Automated Quotations, a global electronic marketplace for buying and selling securities, known for its high concentration of technology and growth-oriented companies.

Net Asset Value - The value of a fund's assets minus its liabilities, representing the per-share price at which investors can buy or sell fund shares.

Non-Farm Payrolls - A monthly U.S. economic indicator that measures the net change in employment excluding the farming sector, government employees, private households, and nonprofit organizations, often impacting market volatility, particularly in forex and U.S. dollar-related trades.

Non-Sufficient Funds - A term used when a bank account does not have enough money to cover a transaction, often resulting in a bounced check or declined payment.

New York Stock Exchange - The largest stock exchange in the world by market capitalization, located in New York City, where shares of publicly traded companies are bought and sold.

A stock market index that tracks the performance of 100 of the largest non-financial companies listed on the Nasdaq Stock Exchange, often representing sectors like technology, healthcare, and consumer services.

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, often referred to as the "bottom line" or net profit.

The total value of an individual’s or entity's assets minus its liabilities, representing financial health. It is calculated using the formula: Net Worth=Total Assets−Total Liabilities; It indicates the owner's equity in assets after all debts are paid.

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Order Block – A price range where large institutions have placed significant orders, often leading to future reversals or strong reactions when revisited.

Once Cancels the Other - A type of order that allows a trader to place two orders simultaneously, where the execution of one order cancels the other, often used to set profit targets and stop-loss levels.

Opening Range Breakout - A trading strategy that identifies potential buy or sell opportunities based on price movement breaking above or below the high or low of the opening range, typically during the first minutes of the trading session.

Over-the-Counter (off-exchange trading) - A decentralized market where financial instruments, such as stocks, bonds, and derivatives, are traded directly between parties rather than through a formal exchange, often with less regulation and transparency.