Key Trading Terms and Concepts
Ask
- The ask price is the current market price at which you can purchase an asset.
Bull
- Bulls are traders who expect the asset price to rise. They buy assets with the goal of selling them at a higher price in the future.
Bull Market
- A market characterized by rising asset prices, where bulls play a key role. The term likely originates from the upward motion seen in price charts, similar to the way a bull raises its horns.
Return
- On platforms like Qption, traders may receive up to 45% of their investment amount even in a losing trade. The return percentage is determined when an asset is purchased.
Volatility
- The degree of price fluctuation of an asset over a set time period. Higher volatility indicates larger price swings.
Deposit
- The balance available in a trader's account, which can be used to execute trades.
Diversification
- A risk management strategy that involves spreading investments across various assets to minimize exposure to any single asset.
Indicator
- A technical tool used in chart analysis to predict asset price direction and assist in trading decisions.
Bid
- The bid price is the current market price at which you can sell an asset.
Price Corridor
- A segment of the chart that shows asset price movement between support (lower boundary) and resistance (upper boundary) levels.
Correction
- A temporary reversal in price direction following a strong trend.
Correlation
- A measure of how two assets move in relation to each other, ranging from -1 (inverse) to +1 (direct correlation). For example, EUR/USD and GBP/USD pairs often move in the same direction.
Liquidity
- The ease with which an asset can be bought or sold. Higher trading volume often results in greater liquidity.
Support Line
- A price level at which buyers prevent further declines in an asset's price, acting as a support level.
Resistance Line
- A price level where sellers resist further price increases, acting as a resistance level.
Trend Line
- A line drawn along price lows in an uptrend (support) or along highs in a downtrend (resistance) to illustrate the trend's direction.
Bear
- Investors who profit from falling prices by selling assets and repurchasing them at lower prices.
Bear Market
- A market where prices are declining, characterized by downward trends driven by bears. The term may come from the downward swipe of a bear's paw.
Bear Raid
- A strategy where traders, or bears, coordinate to drive down an asset's price by selling in large volumes.
Trader Sentiment
- An indicator reflecting the overall direction of trades, showing whether the majority of traders are buying or selling an asset.
Bar
- A type of chart that shows price movement over a specific time period, commonly called a bar chart.
Bonus
- Extra funds added to a trader's account by the platform, typically as a promotional incentive or deposit bonus.
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