Terminology Part 1

Question 1

Technical Analysis

Answer 1

The study of a stock’s chart patterns to predict future price movements

Question 2

Technical Indicator

Answer 2

Heuristic or mathematical calculations based on the price, volume, or open interest of a security or contract

Question 3

Open Interest

Answer 3

The total number of bought or sold contracts

Question 4

Fundamental Analysis

Answer 4

The study of a company’s economic and business factors to determine a stock’s intrinsic value

Question 5

Intrinsic value

Answer 5

A measure of what an asset is worth

Question 6

Forex (Foreign Exchange)

Answer 6

Involves trading different currencies

Question 7

Day Trading

Answer 7

Buying/selling and asset on the same day

Question 8

Switch Trading

Answer 8

Holding a trade overnight

Question 9

Scalping

Answer 9

Holding a trade for a short amount of time (seconds or a minute)

Question 10

Long

Answer 10

Buying low and selling high (They expect the price to increase)

Question 11

Short

Answer 11

Borrowing a stock to sell high and buy low (They expect the price to decrease)

Question 12

Bull/Bullish

Answer 12

Strong market, Prices are increasing (Up by 20%)

Question 13

Bear/Bearish

Answer 13

Weak market, Prices are decreasing (Down by 20%)

Question 14

Risk management

Answer 14

The process of identifying, reducing risk in a investment or trading decisions

Question 15

Cash Account

Answer 15

Refers to the money in your account

Question 16

Paper Account

Answer 16

Refers to the fake money in your account (Used for Paper Trading)

Question 17

Margin

Answer 17

A loan from your broker to purchase an investment

Question 18

Leverage

Answer 18

The rate your cash account will be multiplied by to give you margin