Fibonacci Trading Glossary Q-Z
What is Quantitative Easing?
The term Quantitative Easing (or QE) refers to a money-creating policy implemented by central banks. When a central bank applies such a policy it buys domestic assets (i.e. bonds) in order to enhance the money supply in the economy and to avoid deflation and unemployment. As government bonds are purchased the price of these bonds goes up and consequently their yield decreases. As the interest rate of the government bonds is reduced, investors have an additional incentive to become risky by placing capital in risky assets such as corporate debt and equities. A Quantitative Easing policy produces also a negative effect on the exchange rate of the domestic currency. As the domestic currency depreciates the domestic assets become more attractive to foreign investors.
What is a Quote?
The quote currency or counter currency is the second currency of a forex pair. The first currency in a Forex pair is called the base currency.
What is Ratio Spread?
Ratio Spread refers to an options trading strategy, in which a portfolio will purchase an unequal number of Puts & Calls option contracts on a single underlying asset.
What is SEC?
SEC is the US Securities and Exchange Commission. The commission regulates the domestic US markets and oversees mergers and acquisitions.
Find out more: www.sec.gov
What is Stop-Loss?
A stop-loss order is a trading order that limits the loss potential of any trade position. A stop-loss sets a predetermined price level at which a position will be automatically closed.
What is Support / Resistance Level?
Support levels are price levels below the current price where strong demand is expected to appear. Resistance levels are price levels above the current price where strong supply is expected to appear. When the price of an asset reaches close to any of these levels then the market offers buying/selling opportunities.
What is a Trendline?
Trendlines are ascending or descending lines that are used in order to confirm the continuation of a price trend. A trendline can be identified in any timeframe (from 1-Minute to 1-Month). When the price touches an important trendline then it is a sign of a potential buying/selling opportunity. Two parallel trendlines create a price channel.
What is a Trading Signal?
A trading signal is a sign of an important upcoming market movement. This sign alerts traders to instantly buy or sell the market at an early stage of the market movement. A trading signal can be a manual signal or an automated signal. Manual signals are delivered via emails, on-screen, SMS, forums, or social media. Automated trading signals are delivered via a trade copy mechanism. These mechanisms are available in most modern trading platforms (MT4, MT5, Tradestation, etc.).
Find out more: http://tradingfibonacci.com/index.php/brokers/trade-systems
What is a Triangle in Trading?
A Trading Triangle is an important price formation that can visualize modifications in price volatility. Triangle formations can provide high momentum trades and limited downsized risk.
What is the VIX Index?
VIX refers to the Chicago Board Options Exchange Volatility Index. It is a measure used to track volatility on the S&P 500 index and is the most well-known volatility index on the markets.
What is West Texas Intermediate Crude Oil?
The West Texas Intermediate, or West Texas Light Sweet, or Light Sweet Crude, or WTI, is a grade of crude which is traded on the NYMEX (New York Mercantile Exchange, part of CME Group).
Find out more: http://www.cmegroup.com/company/nymex.html
What are Leading Indicators?
Leading indicators refer to measurable economic variables that change ahead of the economic cycle. These indicators are used by analysts in order to forecast the forthcoming macroeconomic conditions and to predict turning points in the economic circle.
What is Yield?
Yield refers to the income earned from holding an investment. The yield is often measured on an annualized basis and it is usually generated by interest payments (bonds) or dividend payments (equities).
What is Zew Indicator of Economic Sentiment?
The ZEW Index of Economic Sentiment is a monthly German economic survey. It is based on the sentiment of 350 economists and it is widely followed as an indicator of upcoming economic growth.
■ Fibonacci Trading Glossary Q-Z