STG Glossary

imagen de libro abierto del glosario de STG Markets

Technical analysis: The study of patterns and historical data of the price and volume of a financial asset to predict future movements and make trading decisions. 

Leverage: A technique that allows trading with a larger amount of capital than you own. It increases the potential for profit, but also the risk of loss. 

Financial advisor: A professional who provides advice and guidance on investment and financial strategies, including trading. 

Asset: Refers to any tradable financial instrument, such as stocks, bonds, currencies, commodities, etc. 

Ask: The price at which a seller is willing to sell a financial asset in the market. 

ATR (Average True Range): A technical indicator used to measure the volatility of a financial asset over a certain period of time. 

Arbitrage: The practice of taking advantage of differences in the price of an asset in different markets or platforms to obtain profits. 

Asset Allocation: The allocation of capital among different asset classes (stocks, bonds, cash, etc.) in order to diversify and manage the risk of an investment portfolio.

Bullish: A positive outlook or trend in the market, in which prices are expected to rise. 

Bearish: A negative outlook or trend in the market, in which prices are expected to fall. 

Bid (Buying Price): The price at which a buyer is willing to purchase a financial asset in the market. 

Brokerage: The service provided by a broker to facilitate transactions for the purchase and sale of financial assets. 

Base currency: The currency used as a reference to quote the value of other currencies in a currency pair. For example, in the EUR/USD pair, the euro is the base currency. 

Breakout: A price movement that breaks a key resistance or support level, which may indicate a change in the market trend. 

Balance: The total value of funds in a trading account, taking into account both realized and unrealized gains and losses. 

Backtesting: The process of testing a trading strategy using historical data to evaluate its past performance and verify its viability. 

Bull Market: A market in which the prices of financial assets are in a sustained upward trend. 

Bear Market (Bear Market): A market in which the prices of financial assets are in a sustained downward trend. 

Candlestick: It is a graphical representation of the price movement of an asset in a certain period of time. Japanese candlesticks show the opening, closing, maximum and minimum of the price. 

Commission: It is the fee or charge charged by a broker or trading platform for executing a transaction of purchase or sale of financial assets. 

Quote:  It is the current price at which a financial asset is being traded in the market. 

Contract: It is a standardized agreement that establishes the terms and conditions for buying or selling a financial asset at a predetermined future date. 

Trading account: It is an account that a trader opens with a broker or platform to carry out transactions of purchase and sale of financial assets. 

Short (Short Position or Short Sell): It is a trading strategy in which a trader sells a financial asset that he does not own, with the expectation of buying it back at a lower price in the future. 

Hedging: It is a strategy that consists of opening a position to compensate or reduce the risk of another open position. 

Market capitalization: It is the total market value of a company or financial asset, calculated by multiplying the current price by the number of shares outstanding. 

Credit (Margin): It is the amount of money or margin that a broker can lend to a trader to trade with leverage. 

Correlation: The relationship between two or more financial assets in terms of how they move relative to each other. price at which a buyer is willing to acquire a financial asset in the market. 

Day Trading: It is a trading strategy in which positions are opened and closed within the same day, leaving no trades open overnight. 

Divergence: It is a situation where the price of an asset moves in one direction while a related indicator or oscillator moves in the opposite direction. It may indicate a possible change in the trend. 

Dividend: It is a distribution of a company’s profits to its shareholders in the form of periodic payments. Dividends are often an important part of stock investments. 

Drawdown: It is the maximum decrease in the value of a trading account from its highest point to its lowest point, before recovering. 

Slippage:  It is the difference between the expected execution price of an order and the actual price at which it is executed due to market volatility and liquidity. 

Doji: It is a Japanese candlestick formation in which the opening price and the closing price are practically equal, creating an appearance of a cross or an equal sign (=). It may indicate indecision in the market. 

Bid: It is the amount of an asset that buyers are willing to acquire at a specific price in the market. 

Margin: It is the amount of money required to open or maintain a leveraged position in the market. It is also known as margin. 

Dark Pool: It is a private trading system used by financial institutions and large investors to make trades outside the open market and without disclosing details such as price and volume to the public. 

Derivative: It is a financial instrument whose value is based on an underlying asset, such as stocks, indices, commodities or currencies. Derivatives can be used to speculate on price movements or to hedge risks. 

Base currency: The first currency in a currency pair in the Forex market, representing the base value of the pair. 

Quote Currency: The second currency in a currency pair in the Forex market, representing the relative value against the base currency. 

Execution: It is the process of carrying out an order to buy or sell a financial asset in the market. 

Equity: It is the current value of a trading account, taking into account the balance, profits and unrealized losses. 

Stochastic: It is a technical indicator used to measure the speed and momentum of a price. It helps identify overbought and oversold conditions in the market. 

Expiration: It is the date and time when a futures contract or option expires and is no longer valid. 

Exchange: It is a market where financial assets are traded, such as stocks, currencies, cryptocurrencies, among others. 

Strategy: It is a plan or set of rules that a trader follows to make trading decisions and manage their trades. 

Equity Curve: It is a graphical representation of the growth or decrease in the value of a trading account over time. 

EMA (Exponential Moving Average): It is an exponential moving average, a technical indicator used to smooth the price and identify trends. 

Elliott Wave Theory: A theory that suggests that financial asset prices move in repeating and predictable patterns in the form of waves. 

Entry: It is the point or level at which a trader decides to open a buy or sell position on a financial asset.

Fibonacci Retracement: It is a tool used in technical analysis to identify possible levels of correction or reversal of a trend based on Fibonacci ratios. 

Forward Testing: It is the process of testing a trading strategy in real time using current data to evaluate its performance and effectiveness. 

Fundamentals: Refers to the economic, financial and market factors that affect the value and performance of a financial asset. 

FOMO (Fear of Missing Out): It is the fear of missing out on an investment opportunity when it is observed that other investors are making profits. 

Floating Profit/Loss: It is the unrealized profit or loss of an open position that has not yet been closed. 

Fill or Kill: It is an instruction given by a trader to execute an order to buy or sell a financial asset immediately or cancel it completely. 

Fundamental Analysis: An analytical approach that evaluates the economic, financial, and market fundamentals of an asset to determine its intrinsic value and growth potential. 

Futures Contract: It is a standardized contract that obliges the parties to buy or sell a financial asset at a future date and at a price agreed in advance. 

Fill Price: It is the price at which an order to buy or sell a financial asset is executed. 

Forex (Foreign Exchange): It is the decentralized global market where the different currencies of the world are traded. Forex is the largest and most liquid market in the world. 

Gap: It is a gap in the price chart that occurs when the opening price of an asset is significantly different from the previous closing price, creating an empty space on the chart. 

Going Long: It is the action of buying a financial asset with the expectation that its price will increase to make a profit. 

Going Short:  It is the action of selling a financial asset that is not owned with the expectation of buying it back at a lower price in the future, making profits from falling prices. 

Good Till Cancelled (GTC): It is a type of order that remains active until it is completed or until the trader cancels it manually. 

Gross Profit: It is the gross profit obtained from a trading operation, calculated by subtracting the acquisition cost of the asset from the sale price. 

Golden Cross: This is a bullish technical signal that occurs when the short-term moving average crosses above the long-term moving average on a price chart. 

Grid Trading: It is a strategy in which a trader sets a series of buy and sell orders at different price levels, creating a “grid” to take advantage of market movements. 

Candlestick chart: It is a type of chart that shows the price fluctuation of an asset using Japanese candlesticks, providing information about the opening, closing, maximum and minimum of the selected time period. 

Gamma: It is a measure that indicates the sensitivity of an option to changes in the volatility of the underlying asset. 

Gross Margin: It is the gross margin obtained from a trading operation, calculated by dividing the gross profit by the total revenue. 

Hedge: It is a strategy used to reduce or compensate for the risk of loss on an open position by opening a contrary position in another asset or related instrument. 

High: It is the highest price reached by a financial asset during a specific period of time. 

Holding Period: It is the time during which a trader or investor holds an open position in an asset before closing it. 

Hammer: It is a Japanese candlestick formation that has a small body near the lower end and a long upper shadow, indicating a possible bullish reversal in price. 

Hard Stop: It is a predetermined price level set by a trader to close a position automatically if the price reaches that level, regardless of market conditions. 

High-Frequency Trading (HFT): It is a style of trading that uses algorithms and computerized systems to perform buying and selling operations in fractions of a second, taking advantage of small profit opportunities. 

HODL: It is a term used in the cryptocurrency community that means “Hold On for Dear Life”. It refers to the strategy of holding cryptocurrencies for the long term, regardless of short-term price fluctuations. 

Hot Market:  It is a market in which there is a high volume of trading and increased activity, which can generate trading opportunities. 

Halt (Suspension): It is the temporary interruption of trading in a market or financial asset due to abnormal conditions or exceptional situations. 

Historical Volatility: It is a statistical measure that indicates the variability of the prices of a financial asset in the past, using historical data. 

Indicator: It is a tool used in technical analysis to analyze market data and generate buy or sell signals. Indicators can be based on price, volume or other data. 

Intraday: Refers to trades that open and close on the same day. Day traders seek to take advantage of short-term price fluctuations. 

IPO (Initial Public Offering): It is the initial public offering of shares of a company in the market. It is when a company issues shares for the first time for the public to buy. 

Index: It is a statistical measure that represents the overall performance of a group of stocks, bonds or other financial assets. Indices are used to track the performance of the market as a whole. 

Investment: It is the action of placing money in a financial asset, such as stocks, bonds or real estate, with the expectation of obtaining long-term profits. 

Long-term investment: It is an investment strategy in which positions are held for an extended period, usually years, with the aim of obtaining long-term profits. 

Short-term investment: It is an investment strategy in which positions are held for a short period, usually days or weeks, with the aim of obtaining quick profits. 

In the Money: Refers to an option that has intrinsic value. In the case of a call option, it means that the strike price is lower than the current price of the underlying asset. In the case of a put option, it means that the strike price is higher than the current price of the underlying asset. 

Compound interest: It is the process of reinvesting the profits made from an investment to generate more profits over time. 

JPY (Japanese Yen): It is the code of the Japanese currency, the yen. It is widely used in the foreign exchange (Forex) market and in international transactions. 

Jobber: It is a term used in some financial markets to refer to a trader who makes short-term buying and selling operations, taking advantage of small price fluctuations to make quick profits. 

J Curve: It is a graphical representation of the evolution of the gains or losses of an investment over time. Initially, you may show losses before profits start to rise. 

Joint Account: It is a trading or investment account that is shared by two or more people, who have access and control over the funds and operations made in the account. 

Junior Traders: They are beginner or lower-level traders in a company or financial institution. Junior traders are usually in a stage of learning and skill development under the supervision of more experienced traders. 

Long-term: Refers to an investment strategy or position that is held for an extended period, usually several years, with the expectation of long-term gains. 

Limit Order: It is an instruction given by a trader to buy or sell an asset at a specific price or better. The order is executed only if the price reaches the specified level. 

Liquidity: Refers to the ability of a financial asset to be bought or sold quickly and with minimal impact on price. Liquid assets are easy to convert into cash. 

Long Position: It is the purchase of a financial asset with the expectation that its price will increase to make a profit. 

Leverage: The use of borrowed capital, such as margin, to amplify the potential for gains or losses on a trade. It allows traders to control a greater amount of assets with less equity capital. 

Lot Size: This is the specific amount of financial assets included in a transaction. In the foreign exchange market, a standard lot usually represents 100,000 units of the base currency. 

Limit Move: It is a limit set by an exchange or market to avoid excessive price movements in a given period of time. During a limit movement, you cannot perform operations beyond the set limit. 

Loss Aversion: It is the psychological bias that leads investors to feel more pain for losses than pleasure for profits. Investors tend to be more cautious and avoid risks to avoid losses. 

Long-Term Capital Gain: It is the gain obtained from the sale of an asset that has been held for more than a year. In some countries, long-term capital gains may receive more favourable tax treatment. 

Lock-In: It is the act of securing or protecting a profit made by closing a position and locking the profit before the market changes direction. 

Lot: A standard unit of measurement used in trading to represent the amount of a financial asset in a transaction. 

Market Order: It is an instruction given by a trader to buy or sell an asset at the current available market price. The order is executed immediately at the best price available at that time. 

Margin: It is the additional capital required by a broker to open a leveraged position. It allows traders to trade with greater exposure to the market using borrowed capital. 

Margin Call: It is a notification that a broker sends to a trader when the margin in his account falls below the minimum required level. The trader is required to deposit more funds or close positions to meet margin requirements. 

Moving Average: It is a technical indicator that shows the average prices of an asset during a specific period. It is used to identify trends and buy or sell signals. 

Market Cap: It is the total market value of a company or cryptocurrency, calculated by multiplying the current price by the total number of shares or units in circulation. 

MACD (Moving Average Convergence Divergence): It is a technical analysis indicator that shows the relationship between two moving averages of the price of an asset. It is used to identify possible turning points in a trend. 

Momentum: It is the measure of the momentum or force behind the price movement of an asset. Traders use momentum to identify trends and determine the likelihood that they will continue or reverse. 

Market Volatility: It is the measure of the speed and magnitude of changes in market prices. High volatility indicates larger and faster price movements, while low volatility indicates more stable movements. 

Market Maker: It is an entity, usually a financial institution, that provides liquidity in a market by quoting buy and sell prices for a financial asset. Market makers help maintain the fluidity of operations. 

Mutual Fund: This is a form of collective investment in which investors contribute their money into a common fund managed by a management company. The fund invests in a diversified portfolio of assets, such as stocks and bonds. 

Nasdaq: It is an electronic stock exchange in the United States, known for trading mainly shares of high-tech companies and the computer sector. It is one of the largest stock exchanges in the world. 

NYSE (  New York Stock Exchange): It is the New York Stock Exchange, the largest stock exchange in the United States and one of the most important in the world. Numerous shares of leading companies are listed on it. 

Algorithmic trading: It is the use of computer algorithms to perform operations in the market in an automated manner. The algorithms execute buy or sell orders according to predefined conditions. 

Resistance level:  It is a price level at which supply is expected to be stronger than demand, which can make it difficult for the price to exceed that level. Resistance levels are often seen as barriers to upward price movement. 

Support level:  It is a price level at which demand is expected to be stronger than supply, which can prevent the price from falling below that level. Support levels are usually thought of as areas where buyers can enter the market. 

Nikkei: It is an index of the Tokyo Stock Exchange that tracks the performance of 225 leading companies in the Japanese stock market. The Nikkei 225 is one of the most important indices in Japan and is used as an indicator of the Japanese market in general. 

Non-Farm Payrolls: An economic report published monthly in the United States that shows the change in the number of nonfarm employees during the previous month. It is an important indicator of the health of the labor market and can affect market movements. 

Nominal Value: It is the nominal value of a share, bond or other financial instrument, which is established when issuing the instrument. Often, the face value is different from the current market value of the asset. 

Net Asset Value: It is the total value of the assets of an investment fund, divided by the number of shares outstanding. The net asset value per share is used to determine the purchase or sale price of the fund’s units. 

Market news: These are events, reports or announcements that can have a significant impact on the prices of financial assets. Market news can include economic reports, policy decisions, corporate earnings releases, among others. 

OCO (One Cancels the Other): It is a type of conditional order that combines a buy order and a sell order. If one order is executed, the other is automatically cancelled. It is used to manage risk and set entry and exit levels in a position. 

Open Position: It is a position in which a trader has an active trade in the market. It can be a buy (long) position or a sell (short) position and is subject to changes in the price of the asset. 

Overbought:  Refers to a situation where the price of an asset has risen significantly in a short period of time, which may indicate that the asset is overvalued and there is likely to be a downward correction. 

Oversold:  Refers to a situation where the price of an asset has fallen significantly in a short period of time, which may indicate that the asset is undervalued and there is likely to be an upward correction. 

Order Book: It is a record that shows all the orders to buy and sell a financial asset in a market. The order book shows the prices at which traders are willing to buy and sell, and can help identify supply and demand in the market. 

 

PIP: It is the unit of measurement used in the foreign exchange market to represent the minimum change in the price of a currency pair. It usually refers to the fourth decimal digit in the quote. 

Profit Target: It is the predefined price level at which a trader plans to close a position to secure a profit. The profit target is set before opening a trade and can be based on technical analysis or specific strategies. 

Position Sizing: The process of calculating the appropriate position size for a trade based on a trader’s risk and risk tolerance. It is used to control risk and set clear limits on available capital. 

Price Action: Refers to the analysis and study of the past and present price movements of an asset without using technical indicators. Traders who use price action rely on price patterns and market structure to make trading decisions. 

Pullback: It is a temporary movement of prices against the main trend. After an uptrend, a pullback would be a decline in prices before the uptrend resumes. 

Pairs Trading: It is a trading strategy that involves the purchase of one asset and the simultaneous sale of another related one. The strategy is based on the assumption that the two assets have a stable relationship and that their prices will move together. 

Paper Trading: It is a way to practice trading without risking real money. Traders use a paper account to make virtual trades and evaluate the performance of their strategies without having to commit real capital. 

Penny Stock: Refers to shares of companies with a low market value, usually trading below $5 per share. Penny stocks are usually from smaller companies and can be more volatile and risky. 

Portfolio: A collection of investments, such as stocks, bonds, and other financial assets, that are owned by an individual or entity. The portfolio is diversified to balance risk and maximize profit potential.

Quote: Refers to the current price at which a financial asset is bought or sold. A quote usually shows the bid (buy) price and ask (sell) price for a particular asset.

RSI (Relative Strength Index): It is a technical indicator used to measure the strength and speed of price changes of an asset. The RSI ranges from 0 to 100 and is used to identify overbought and oversold conditions. 

Risk Management: The process of identifying, assessing, and managing risks associated with business operations. It includes the use of strategies and techniques to minimize losses and protect capital. 

Resistance Level:  A price level at which supply is expected to be stronger than demand, which can make it difficult for the price to exceed that level. Resistance levels are often seen as barriers to upward price movement. 

Return on Investment (ROI): It is a measure used to evaluate the profitability of an investment. It is calculated by dividing the gain or loss obtained from an investment by the initial cost of the investment and expressing it as a percentage. 

Risk Reward Ratio:  It is the relationship between the amount of money that is being risked in a trade and the profit potential. It is used to assess whether a trade has a favorable relationship between risk and expected reward. 

Range: Refers to the difference between the highest price and the lowest price in a given period of time. The range can be used by traders to identify support and resistance levels, as well as to determine market volatility. 

Reversal: Occurs when an existing trend in the market reverses and changes direction. It can indicate a change in supply and demand, and is often associated with buy or sell signals. 

Risk Appetite: Refers to the willingness of a trader or investor to take risks in their trades or investments. Risk appetite may vary depending on personal risk tolerance and market conditions. 

Resistance Trendline: It is a line drawn on a price chart that connects successive highs and acts as a barrier to upward price movement. The resistance trend line is used in technical analysis to identify areas where the price may encounter resistance. 

Rollover: The process of extending the settlement date of an open position to the next settlement period. 

Support Level:  A price level at which demand is expected to be stronger than supply, which can make it difficult for the price to fall below that level. Support levels are often seen as floors for downward price movement. 

Stop Order: It is a type of order that is triggered when the price of an asset reaches a predefined level. A buy stop order is triggered when the price rises to a certain level, while a sell stop order is triggered when the price drops to a certain level. 

Scalping: It is a trading strategy that involves making quick trades to take advantage of small price movements. Scalpers seek to make profits in very short timeframes and can make multiple trades in one day. 

Spread: It is the difference between the purchase price and the sale price of an asset. The spread represents the cost of trading and is determined by the market and the broker. A narrower spread indicates greater liquidity and lower transaction costs. 

Stop Loss: It is a type of order placed by a trader to limit losses on an open position. It is automatically triggered when the price reaches a predetermined level, helping to control risk. 

Slippage: Refers to the difference between the expected price of a trade and the actual price at which the trade is executed. Slippage can occur due to lack of liquidity in the market or rapid and unexpected price movements. 

Swing Trading: It is a trading strategy that seeks to take advantage of short-term price movements within a broader trend. Swing traders seek to capture “swings” or price swings between support and resistance levels. 

Support and Resistance: These are price levels on a chart that represent areas where the price is expected to struggle to overcome (resistance) or fall below (support). These levels are used by traders to identify buying or selling opportunities. 

Swap: The cost or benefit associated with holding an open position overnight, which may be based on interest rates or differences in exchange rates. 

Overnight swap: The charge or credit that is applied to a position held overnight due to interest rates. 

Trend: Refers to the gene direction over a given period of time. Trends can be bullish (ascending), bearish (descending) or sideways (without a clear direction). 

Take Profit: It is a predefined level at which a trader closes an open position to secure profits. It is an order placed to sell an asset when the price reaches a target level. 

Trading Plan: It is a set of rules and guidelines that a trader follows when trading in the financial markets. It includes strategies, goals, risk management and rules for entering and exiting operations. 

Technical Analysis: It is an approach to analyzing the markets and predicting future price movements using charts, indicators and historical patterns. Technical analysis is based on the premise that history repeats itself and that past prices can indicate future trends. 

Trailing Stop: It is a type of stop loss order that automatically adjusts as the price of the asset moves in favor of the trader. The stop order drags behind the price and is triggered if the price moves in the opposite direction to the trader’s position. 

Trading Volume: It is the total amount of assets that are bought or sold in a given period of time. Trading volume is an important measure of market activity and can indicate the strength or weakness of a trend. 

Trading Psychology: Refers to the mental and emotional state of a trader while trading in the financial markets. The psychology of trading includes aspects such as controlling emotions, discipline, risk management and making decisions based on facts rather than emotions. 

Trade Entry: It is the point at which a trader opens a position in a financial asset. Entry into trading is based on predefined criteria, such as technical signals, patterns or indicators, which indicate the right time to enter the market. 

Trade Execution: The process of placing an order to buy or sell a financial asset. Trade execution involves sending the order to the market and completing it at the price specified by the trader.

Unfilled Order: Refers to a buy or sell order that has not been completed and is still active in the market. It may be because no suitable counterparties have been found for the trade or because the target price has not been reached. 

Underlying Asset: It is the financial asset on which a derivative instrument is based, such as options, futures or contracts for difference (CFDs). For example, in the case of stock options, the underlying shares are the asset on which the purchase or sale rights are granted. 

Uptrend: Refers to a trend in which the price of an asset moves upward in an upward direction over a certain period of time. In a bull market, the highs and lows are usually higher as the price continues to rise. 

User Interface: It is the visual and functional part of a trading platform that allows traders to interact with the software. The user interface provides tools and functions for performing trades, analyzing charts, managing orders, and setting preferences. 

Unrealized Gain/Loss: This is the difference between the current value of an open position and its entry price. If the current value is greater than the entry price, it is considered an unrealized gain; If it is less, it is considered an unrealized loss. This profit or loss materializes when the position is closed.

Volume: Refers to the total amount of assets that are bought or sold in a market during a given period of time. Volume is a key indicator for assessing liquidity and market activity. 

Valuation: The process of determining the intrinsic value of a financial asset. Valuation is based on several methods and factors, such as fundamental analysis, expected cash flows, financial ratios and market conditions. 

Wall Street: Refers to the street located in New York City, United States, where the main financial institutions and the New York Stock Exchange (NYSE) are located. “Wall Street” is also used to refer to the financial industry in general and the U.S. stock markets. 

Warrants are issued and traded in the financial markets. 

XAG/USD: It is the symbol used to represent the currency pair formed by silver (XAG) and the US dollar (USD). This currency pair is widely traded in the financial markets and offers trading opportunities based on the price of silver relative to the dollar. 

Yuan (CNY): It is the monetary unit of the People’s Republic of China. The yuan is used as the official currency in China and is one of the most important currencies in international financial markets. 

Congestion Zone: Refers to a price range in which a financial asset has been trading sideways for a period of time. The congestion zone can indicate a lack of clear price direction and can be an area where traders expect a breakout or trend change. 

ZEW Indicator: It is an economic indicator that is based on a survey conducted by the Center for European Economic Research (ZEW). The ZEW indicator measures the economic expectations of analysts and investors in Germany and can provide information on market sentiment.