Forex Trading Glossary​

An ascending triangle is a bullish continuation chart pattern that forms when a horizontal resistance line meets an upward-sloping support line. It reflects growing buying pressure, with buyers consistently pushing the lows higher while sellers hold a fixed resistance level. A breakout above the resistance line confirms the pattern, often leading to a strong upward price move. Traders use it to identify entry points in trending markets.

Definition:
An ascending wedge is a bearish reversal chart pattern formed when the price makes higher highs and higher lows, but the slope of the lows rises faster than that of the highs. This creates a narrowing wedge shape, typically slanting upward.

Why it matters:
Despite its upward structure, this pattern often signals weakening bullish momentum. It suggests that buyers are struggling to push prices significantly higher, which can precede a bearish breakdown—especially when volume decreases during the wedge's formation.

How it's used:
Traders monitor for a break below the wedge’s support line, often entering short positions with stop-losses just above the upper resistance line. It’s more reliable when forming after an uptrend, indicating a possible trend reversal.

Definition:
The balance of trade is the difference between a country’s exports and imports of goods over a specific period. A positive balance (trade surplus) means exports exceed imports, while a negative balance (trade deficit) indicates the opposite.

Usage in Trading:
Balance of trade data influences currency strength. For example, a country with a large surplus may see currency appreciation due to foreign demand for its goods, boosting demand for its currency.

A basis point (bps) is a unit of measurement used in finance to describe percentage changes in interest rates, bond yields, and other financial instruments. One basis point equals 0.01% or 1/100th of a percent.

What is a basis point?

A basis point is a way to express very small percentage changes. For instance, if interest rates rise from 4.00% to 4.25%, that’s an increase of 25 basis points.

A bear flag pattern is a technical chart formation that signals the potential continuation of a downward trend in an asset’s price. It typically occurs after a sharp decline, known as the “flagpole,” followed by a brief period of consolidation or upward retracement, forming a small, sloping rectangle that resembles a flag. This pause represents temporary buying interest or reduced selling pressure before the trend resumes.

The pattern reflects market psychology: after a steep drop, some traders take profits or others enter counter-trend trades, causing a short-term rally. However, when selling resumes and the price breaks below the lower boundary of the flag, it often leads to a renewed downtrend with momentum similar to the initial fall.

Traders use the bear flag pattern to identify short-selling opportunities or to confirm bearish sentiment. It's especially significant when accompanied by declining volume during the flag formation and a surge in volume on the breakdown. While not always precise, it serves as a useful tool in anticipating potential price movements in trending markets.

Definition:
A bearish divergence occurs when the price of an asset reaches higher highs while a momentum indicator—such as the Relative Strength Index (RSI) or Moving Average Convergence Divergence (MACD)—forms lower highs. This pattern signals weakening buying momentum despite rising prices and is often interpreted as a potential reversal or correction signal. Traders view bearish divergence as a warning sign that the uptrend may be losing strength and that bearish pressure could be mounting.

Usage in Trading:
Bearish divergence is commonly used to anticipate turning points, especially in overbought markets. Confirmation from candlestick patterns or support/resistance zones strengthens the signal.

Definition:
A bearish engulfing candle is a two-candle reversal pattern where a small bullish candle is immediately followed by a larger bearish candle that fully "engulfs" the previous day's body. It signals a potential shift from buying to selling pressure.

Usage in Trading:
Found at the top of an uptrend or resistance level, the bearish engulfing candle suggests rising bearish momentum. Traders often seek confirmation via volume spikes or the next candle closing lower.

Definition:
A bearish flag is a continuation chart pattern that forms after a sharp downward move (the flagpole) and a period of upward or sideways consolidation (the flag). It implies the bearish momentum will continue after the pause.

Why it matters:
This pattern provides traders with an opportunity to enter short positions at better prices within a downtrend. It’s a signal that selling pressure is temporarily paused, but the bears are likely to regain control.

How it's used:
Traders watch for a break below the lower boundary of the flag, entering short with a target based on the height of the initial flagpole projected downward.

A black swan event is a rare and unpredictable occurrence that has significant consequences for financial markets and economies. The term was popularized by Nassim Nicholas Taleb and describes events that are beyond the realm of normal expectations—such as the 2008 financial crisis or the COVID-19 pandemic. These events often cause extreme market volatility and can disrupt long-held assumptions or strategies.

Bonds are financial instruments that represent a loan made by an investor to a borrower—typically a government, corporation, or municipality. When an entity issues a bond, it is essentially borrowing money from the public and agreeing to pay it back at a future date, known as the maturity date. In return for the loan, the bondholder receives regular interest payments, called coupon payments, until the bond matures.

Bonds are used to raise capital for various purposes, such as funding infrastructure projects, expanding business operations, or refinancing existing debt. They are generally considered lower-risk investments compared to stocks, especially government-issued bonds, which are backed by the credit of the issuing nation.

Each bond has key characteristics, including face value (the amount repaid at maturity), coupon rate (the interest paid), maturity date, and issuer credit quality. Bond prices fluctuate in the secondary market based on interest rates, economic conditions, and the issuer’s financial stability. Because of their predictable income and relative safety, bonds are often included in diversified investment portfolios to balance risk and provide steady returns.

A broker is an individual or firm that executes trades on behalf of a client in exchange for a fee or commission.

What is a broker?

Brokers act as intermediaries between retail or institutional traders and the financial markets. They can be full-service brokers offering advisory services, or discount brokers providing low-cost, no-frills access to markets. Most brokers also offer trading platforms, research tools, and customer support to assist clients in making informed trading decisions.

A bull flag pattern is a bullish chart formation that typically signals the continuation of an uptrend after a brief consolidation phase. It begins with a sharp upward price movement (the “flagpole”), followed by a sideways or downward-sloping rectangular consolidation (the “flag”). This consolidation is typically low in volume and reflects a temporary pause before the price breaks out above resistance. A confirmed breakout from the flag often indicates a resumption of the previous upward trend, making this pattern popular among technical traders for spotting breakout opportunities.

A bull market refers to a financial market condition in which the prices of assets—such as stocks, commodities, or cryptocurrencies—are consistently rising or are expected to rise. It typically reflects widespread investor confidence, optimism about the economy, and strong market momentum. Bull markets can last for months or even years and are often supported by robust economic indicators like rising GDP, low unemployment, and growing corporate profits.

During a bull market, investor demand exceeds supply, leading to upward pressure on prices. Traders and investors may adopt a more aggressive or risk-tolerant approach, aiming to capitalize on the sustained upward trend. The term can apply to any financial market but is most commonly associated with the stock market.

While bull markets present lucrative opportunities, they can also lead to overvaluation and bubbles if driven more by speculation than fundamentals. Recognizing the transition into or out of a bull market is key for strategic investing and risk management.

A bull trap is a false signal that suggests a declining asset has reversed and is heading higher, only for it to resume its downward trend shortly after. Traders caught in a bull trap often enter long positions during what looks like a breakout, only to be “trapped” when prices quickly reverse and continue falling. Recognizing weak breakouts and low volume can help avoid these traps.

Bullish candlestick patterns are formations on price charts that indicate potential upward price movement. Common examples include:

• Hammer
• Engulfing Pattern
• Morning Star
• Piercing Line

These patterns help traders identify potential entry points for long positions, particularly when they appear after a downtrend or near support levels. Confirmation from volume and other indicators strengthens their reliability.

Bullish divergence occurs when the price of an asset makes lower lows while a technical indicator—such as RSI or MACD—forms higher lows. This indicates that downward momentum is weakening and may suggest a potential trend reversal to the upside. Traders often look for bullish divergence as a signal to enter long positions, especially when it aligns with a known support level or reversal pattern.

Definition:
A bullish flag is a continuation pattern that appears after a strong upward price movement (flagpole), followed by a period of consolidation forming a small downward-sloping rectangle (flag). This pause represents a temporary pullback before the price continues in the original upward direction.

Usage in Trading:
Traders watch for breakouts above the flag’s upper boundary to enter long positions. Volume analysis often accompanies this pattern—decreasing during the flag and rising sharply at the breakout.

Bullish and bearish are opposing terms used to describe market sentiment or trends. A bullish outlook means expecting the price of an asset to rise. Traders with a bullish bias typically buy (go long) in anticipation of upward movement. Conversely, a bearish outlook anticipates a decline in price. Bearish traders often sell (go short) or close positions to avoid losses. These terms are used to categorize trends (bull markets vs bear markets), patterns, investors, and trading strategies.

Definition:
The butterfly pattern is a complex harmonic chart pattern used to identify potential reversal zones. It consists of four legs (X-A, A-B, B-C, and C-D) and follows Fibonacci ratios to predict price movement.

Why it matters:
The butterfly pattern helps traders anticipate major turning points in the market. It’s typically used in conjunction with Fibonacci extensions and retracements to find precise reversal levels.

How it's used:
The pattern completes at point D, where traders look to enter a reversal position. It requires accurate measurements—such as AB = 78.6% retracement of XA and CD being a 127%–161.8% extension of AB—for validity.

Definition:
Buy the dip is a strategy where traders purchase an asset after its price declines, under the belief that the drop is temporary and the price will rebound. This approach is rooted in the idea of entering the market at a lower cost within a broader uptrend.

Usage in Trading:
“Buying the dip” requires analysis to distinguish between healthy retracements and the beginning of a reversal. Support levels, moving averages, and bullish candlestick patterns help confirm the dip’s end.

A call option is a financial contract that gives the buyer the right, but not the obligation, to purchase a specific asset (like a stock) at a predetermined price (strike price) within a set time frame.

What is a call option?

A call option allows an investor to benefit from the rise in an asset's price. If the asset’s price rises above the strike price before expiration, the option can be exercised for profit or sold for a premium.

Candlestick patterns are formations created by the grouping of one or more candlesticks on a price chart that traders use to predict future price movements. These patterns can be bullish (predicting upward price movement) or bearish (predicting downward price movement). Common candlestick patterns include doji, engulfing, hammer, and shooting star. Recognizing candlestick patterns is a fundamental part of technical analysis.

The Consumer Price Index (CPI) is a key economic indicator that measures the average change over time in the prices paid by consumers for a selected basket of goods and services. This basket typically includes items such as food, housing, transportation, healthcare, and education. CPI is widely used to track inflation, assess changes in the cost of living, and guide economic policy decisions. When the CPI rises, it indicates that overall consumer prices are increasing—signaling inflation—while a decline suggests deflation. Governments, businesses, and central banks rely on CPI data to make informed decisions about wages, interest rates, and social benefits.

The cup and handle pattern is a bullish continuation pattern in technical analysis. It resembles the shape of a tea cup, where the "cup" forms a rounded bottom and the "handle" is a short period of consolidation or slight pullback. The pattern signals a potential breakout to the upside once the price moves above the resistance level defined by the rim of the cup. It is popular among traders looking to identify strong breakout opportunities.

Day trading is the practice of buying and selling financial instruments within the same trading day. It focuses on short-term movements in the market, aiming to capitalize on small price fluctuations.

What is day trading?

Day trading involves closing all positions before the market closes to avoid overnight risks. It typically requires fast execution, advanced charting tools, and real-time market data. Traders often use technical analysis and indicators to make rapid decisions. It's commonly practiced in markets like stocks, forex, and cryptocurrencies.

DCA, or Dollar-Cost Averaging, is an investment strategy where an investor divides the total amount to be invested into equal parts and buys at regular intervals, regardless of asset price.

What is DCA?

DCA helps reduce the impact of volatility by avoiding lump-sum investing at potentially high prices. Over time, it averages out the cost of purchases and can be especially useful in long-term investing strategies.

Definition:
A descending triangle is a bearish continuation pattern formed by a horizontal support level and a descending resistance trendline. It signals increasing selling pressure as each rally results in lower highs.

Why it matters:
The descending triangle reflects a market dominated by sellers, and when the price breaks below the support level, it often triggers a strong bearish move.

How it's used:
Traders watch for a clean break below the horizontal support, typically confirmed by a surge in volume. Short entries are taken below support with stop-losses placed just above the descending trendline.

A diamond pattern is a rare but powerful chart formation that can signal a major reversal in price direction. It usually forms after an extended trend and resembles the shape of a diamond due to widening and then narrowing price movements. There are two types: diamond tops, which suggest a bearish reversal, and diamond bottoms, which suggest a bullish reversal. This pattern is typically confirmed by a breakout accompanied by increased volume.

A dividend is a portion of a company's profits that is distributed to its shareholders, typically in the form of cash or additional shares. It serves as a reward for investing in the company and reflects its financial health and profitability. Dividends are usually paid out on a regular schedule—such as quarterly or annually—and are most commonly associated with well-established companies that generate consistent earnings. While not all companies pay dividends, those that do often attract income-focused investors seeking steady returns in addition to potential stock price appreciation.

A doji candle is a type of candlestick pattern used in technical analysis that indicates indecision in the market. It forms when the opening and closing prices of a trading session are virtually equal, resulting in a very small or non-existent body with long upper and/or lower shadows. A doji candle can signal a potential reversal in the current trend, particularly when it appears after a strong bullish or bearish move. Traders often look for confirmation from subsequent candles before making decisions based on a doji.

A double bottom pattern is a bullish reversal chart formation that signals the potential end of a downtrend and the beginning of an upward move. It forms when an asset's price falls to a support level, rebounds, then retests the same level and rebounds again—forming a "W" shape. The confirmation comes when the price breaks above the resistance level formed between the two bottoms. This pattern suggests that selling pressure is weakening and buyers are gaining control.

Definition:
A double top is a bearish reversal pattern formed after an extended uptrend, where price tests a resistance level twice and fails both times. The pattern resembles an “M” shape.

Why it matters:
This pattern indicates buyer exhaustion and the potential beginning of a new downtrend. It becomes significant when the price breaks below the neckline—the support between the two peaks.

How it's used:
Once the neckline is broken, traders enter short positions, often with a target equal to the height from the peak to the neckline, and stops above the second top.

EST is an abbreviation that stands for Eastern Standard Time, which is UTC-5. It is one of the primary time zones used in financial markets, especially in the United States. Many trading platforms, economic reports, and market open/close times are referenced in EST. During Daylight Saving Time, it is replaced by EDT (Eastern Daylight Time, UTC-4).

Definition:
The Exponential Moving Average (EMA) is a type of moving average that gives more weight to recent price data. Unlike the Simple Moving Average (SMA), which gives equal importance to all data points, the EMA reacts more quickly to current price changes.

Why it matters:
EMAs are widely used in trend-following strategies due to their responsiveness. They help traders identify potential entry and exit points, spot reversals, and confirm trends.

How it's used:
A popular method is the EMA crossover strategy. For example, when a short-term EMA (like the 12-period) crosses above a long-term EMA (like the 26-period), it may signal a bullish trend. Conversely, a downward crossover indicates a bearish turn.

A falling wedge pattern is a bullish chart pattern that signals a potential reversal or continuation of an uptrend. It forms when the price of an asset moves downward with converging trendlines—indicating that the downward momentum is slowing. As the range narrows, a breakout to the upside is expected. Volume often decreases during the formation and rises at the breakout, confirming buyer strength.

Fiat money is currency that has no intrinsic value and is not backed by a physical commodity like gold. Its value comes from government regulation and trust in the issuing authority.

What is fiat money?

Fiat money refers to modern currencies like the US dollar, euro, or yen. These are accepted as legal tender because the government maintains their value and people have faith in the system—not because the money itself has value.

Definition:
FIFO, or First In, First Out, is an order execution rule that mandates a trader must close their earliest opened positions before closing newer ones when holding multiple trades of the same currency pair in the same direction. This is especially relevant under regulatory guidelines like those from the U.S. National Futures Association (NFA).

Usage in Trading:
Traders using platforms that enforce FIFO must be aware that they can’t selectively close newer positions unless older ones are exited first. It impacts trade management strategies, particularly for those using scaling techniques or partial closes.

Forex, or foreign exchange, is the global market for buying and selling currencies. It is the largest and most liquid market in the world, operating 24/5 and facilitating currency exchange between governments, institutions, businesses, and traders. Currency pairs (like EUR/USD) are traded based on fluctuations in exchange rates, allowing speculation and hedging.

What is Forex?

Forex is the process of trading one currency against another. Traders participate to profit from price changes between currency pairs. The forex market is decentralized and functions through a global network of banks and brokers.

A free market economy is an economic system where prices and production of goods and services are determined by unrestricted competition between privately owned businesses. In a free market economy, government intervention is minimal, and market forces like supply and demand dictate outcomes. It is the foundation of capitalist economies and promotes innovation and efficiency, although it may also lead to inequality and monopolies if not regulated.

Funding pips represent the interest cost or gain—expressed in pips—that traders may incur when holding leveraged positions overnight in the forex market. This occurs due to the interest rate differential between the two currencies in a currency pair. When a trader holds a position past the rollover time (typically 5 p.m. EST), they may either earn or pay interest depending on whether they are long or short the currency with the higher interest rate. These small amounts accumulate daily and can impact profitability over time, especially in longer-term or high-leverage trades.

GMT stands for Greenwich Mean Time, the mean solar time at the Royal Observatory in Greenwich, London. It is a time standard used as a global reference, especially in finance and aviation.

What is GMT?

GMT is the baseline time zone against which all others in the world are compared. It's widely used in trading platforms and global scheduling to ensure consistency across time zones

A gravestone doji is a bearish candlestick pattern that signals potential trend reversal at the top of an uptrend. It forms when the opening, closing, and low prices are roughly equal, with a long upper shadow indicating that buying pressure was overcome by sellers by the close. This shows a rejection of higher prices and may warn of weakening bullish momentum. Confirmation with a following bearish candle is typically sought by traders before acting.

Definition:
The hanging man candle is a single-candle bearish reversal pattern that typically occurs at the top of an uptrend. It has a small real body at the top with a long lower wick and little or no upper shadow. This shape suggests a failed attempt by sellers to push prices lower, which was ultimately rejected—but not without warning signs.

Why it matters:
It shows vulnerability in a bullish trend, especially if volume increases. The selling pressure during the session is noteworthy, and if followed by a bearish candle, the pattern is more credible as a reversal signal.

How it's used:
For example, in the AUD/USD pair, a hanging man at key resistance could prompt traders to prepare for a short setup if the next candle confirms the shift with a bearish close.

The head and shoulders pattern is a bearish chart formation used in technical analysis to predict a reversal from an uptrend to a downtrend. It consists of three peaks: a higher middle peak (the "head") flanked by two lower peaks (the "shoulders"). The neckline connects the lows following each peak. A break below this neckline signals a potential downward move. There's also an inverse version that signals a bullish reversal.

Hedging is a risk management strategy used to offset potential losses in one investment by taking an opposing position in another asset.

What is hedging?

Hedging reduces financial risk. For example, a forex trader might hedge by taking a long position in one currency pair and a short position in another, or use options and futures to guard against adverse price movements.

indexrussell: rut refers to the Russell 2000 Index, a stock market index that measures the performance of approximately 2,000 small-cap U.S. companies. It is maintained by FTSE Russell and is widely regarded as a benchmark for the small-cap segment of the American equity market. The ticker symbol "RUT" is often used on trading platforms and financial websites.

indexsp .inx refers to the S&P 500 Index, one of the most widely followed benchmarks of the U.S. stock market. It includes 500 of the largest publicly traded companies in the U.S. and is considered a barometer for the overall health of the U.S. economy and investor sentiment. The ticker “.INX” is used to represent the S&P 500 on some financial data services.

Definition:
The inflation rate measures the rate at which the general level of prices for goods and services is rising in an economy over a set period, typically expressed as a percentage.

Why it matters:
Inflation affects purchasing power, interest rates, and monetary policy. High inflation may prompt central banks to raise interest rates, strengthening the national currency, while low inflation or deflation may trigger rate cuts.

How it's used:
Traders monitor inflation indicators like CPI (Consumer Price Index) and PPI (Producer Price Index). Surprising inflation data often causes volatility in forex, bond, and stock markets.

An inverted hammer is a single candlestick pattern that may signal a potential bullish reversal after a downtrend. It features a small real body at the lower end of the candle and a long upper shadow, indicating that buyers tried to push prices up during the session but were unable to maintain the higher price. If followed by a strong bullish candle, it can suggest a shift in momentum from sellers to buyers.

Definition:
An inverted hammer candle forms after a downtrend and is characterized by a small real body at the lower end and a long upper wick. It indicates that buyers attempted to push prices higher but faced resistance—however, it may suggest an upcoming reversal if confirmed by a bullish follow-up.

Usage in Trading:
Though not a standalone buy signal, an inverted hammer gains strength when followed by a bullish candle. It shows that sellers are losing control and buyers are testing the market.

Definition:
Liquidation refers to the forced closing of a trader’s open positions by a broker or exchange due to insufficient margin to maintain the trade. This often occurs when losses exceed the account’s maintenance margin or balance.

Why it matters:
In leveraged trading (like forex or crypto), liquidation is a risk management mechanism that prevents traders from incurring negative balances. However, it can also result in abrupt losses, especially in volatile markets.

How it's used:
If a trader uses high leverage and the market moves significantly against their position, their broker may liquidate the trade to limit further losses. Understanding liquidation thresholds is crucial for risk management.

Liquidity refers to the ease with which an asset can be bought or sold in the market without affecting its price. High liquidity means there are many active buyers and sellers, resulting in tight bid-ask spreads and fast execution. Markets like forex, large-cap stocks, and major commodities are considered highly liquid. Low liquidity, on the other hand, can lead to slippage, wider spreads, and volatile price swings. Liquidity is a key consideration for traders, especially during market news events or off-hours trading.

A margin call occurs when the value of an investor’s margin account falls below the broker’s required minimum margin level. This typically happens when the market value of the assets held in the account declines significantly, reducing the equity portion of the account. In response, the broker demands that the investor deposit additional funds or securities to restore the required margin. If the investor fails to meet the margin call in time, the broker may liquidate some or all of the investor's positions to limit further risk. Margin calls are a key risk consideration for leveraged trading and can happen quickly in volatile markets.

Mark to market is an accounting practice that involves valuing assets based on their current market price, rather than their original purchase cost. This method provides a real-time snapshot of an asset's worth and is commonly used in trading, especially for derivatives and margin accounts. It ensures that gains and losses are recognized as market values fluctuate, helping investors and institutions assess their financial position more accurately.

Paper trading is a simulated trading process where investors practice buying and selling assets without using real money. It allows them to test strategies in real market conditions without financial risk.

What is paper trading?

Paper trading is used by beginners and experienced traders alike to refine techniques, build confidence, or evaluate new systems. It’s often available through demo accounts on trading platforms.

Perfect Money is a digital payment system that allows users to send, receive, and store funds online. It supports multiple currencies and is often used for instant payments, currency exchange, and funding trading accounts, especially in the forex and crypto communities. Known for its low fees and privacy-oriented features, it operates similarly to systems like PayPal or WebMoney but with a stronger focus on anonymity and international transactions.

A pip (percentage in point) is the smallest standard movement in a currency pair's price, typically equal to 0.0001 for most pairs or 0.01 for Japanese yen pairs. It is a unit of measurement used in forex to express changes in value and calculate profits or losses.

What is a pip?

A pip is a tiny measurement of change in a currency pair's price, used to standardize trading gains and losses. For example, if EUR/USD rises from 1.1500 to 1.1505, it moved 5 pips.

The prime rate is the interest rate that commercial banks charge their most creditworthy corporate customers. It serves as a benchmark for many other rates, including personal loans, credit cards, and variable mortgage rates.

What is the prime rate?

The prime rate is influenced by the federal funds rate set by central banks. When the central bank raises rates, the prime rate typically increases as well, affecting the cost of borrowing for consumers and businesses.

Puts refer to put options, which are financial contracts that give the holder the right, but not the obligation, to sell a specific asset at a predetermined price (strike price) before a set expiration date. Puts are used to speculate on a decline in an asset’s price or to hedge against potential losses in a portfolio. If the asset’s price drops below the strike price, the put option increases in value.

The return on equity (ROE) formula is used to measure a company’s profitability relative to the equity invested by shareholders. It evaluates how efficiently a company uses shareholder funds to generate net income. The formula is:

ROE = Net Income / Shareholders’ Equity

A higher ROE indicates better efficiency in capital use and is a strong indicator of financial performance, especially when compared across companies in the same sector. For example, a 20% ROE means the company generated $0.20 of profit for every $1 of equity.

A rising wedge pattern is a bearish chart formation that occurs when the price rises within converging trendlines. Despite the upward movement, the narrowing range indicates weakening bullish momentum. It typically signals an impending price drop. This pattern can appear as a reversal during an uptrend or as a continuation pattern in a downtrend. A break below the lower trendline confirms the bearish move.

RSI (Relative Strength Index) is a momentum oscillator used in technical analysis to measure the speed and change of price movements. It ranges from 0 to 100.

What is RSI?

RSI helps traders identify overbought or oversold conditions. A reading above 70 suggests an asset may be overbought (due for a pullback), while a reading below 30 indicates it may be oversold (potential for a bounce). It is commonly used to spot potential trend reversals or confirmation of current trends.

A shooting star candlestick is a bearish reversal pattern that appears after an upward price movement. It has a small real body near the low of the session and a long upper shadow, indicating that the price was pushed higher during the session but sellers regained control by the close. This signals potential exhaustion of the uptrend and the possibility of a downward reversal, especially when confirmed by the next candle closing lower.

A stock split is a corporate action in which a company divides its existing shares into multiple new shares to increase the number of shares outstanding, without changing the total market value of the company.

What is a stock split?

In a stock split, shareholders receive additional shares—for example, in a 2-for-1 split, each shareholder gets two shares for every one previously held. While the price per share decreases proportionally, the total value of the investment remains the same. Stock splits often aim to improve liquidity and make shares more accessible to a broader range of investors.

Swing trading is a trading strategy that focuses on capturing price moves over a few days to several weeks. Swing traders analyze market trends and use technical indicators, such as moving averages, RSI, or MACD, to identify entry and exit points. They often aim to ride the "swing" within a trend and hold positions longer than day traders but shorter than long-term investors. This method allows for potentially higher returns than day trading with fewer trades, while still taking advantage of short- to medium-term volatility.

A triangle pattern is a common chart formation in technical analysis that signals a period of consolidation before a potential breakout. It is formed by drawing trendlines along a converging price range, resembling a triangle. There are three main types:

• Ascending Triangle – bullish continuation
• Descending Triangle – bearish continuation
• Symmetrical Triangle – can break in either direction

Traders interpret triangle patterns as a sign of decreasing volatility and prepare for a significant price movement when the pattern resolves.

The unemployment rate is the percentage of the labor force that is actively seeking work but currently without a job. It’s a key economic indicator of labor market health.

Original Question:
unemployment rate definition

Answer:
The unemployment rate shows how many people are jobless compared to the total workforce. A rising rate can indicate economic trouble, while a falling rate often suggests growth and stability.

YOY stands for Year Over Year, a method of comparing data for one time period to the same period in the previous year. It is commonly used in financial and economic analysis to measure growth, trends, or changes without seasonal effects. For example, a company's revenue that increased 10% YOY means it earned 10% more this year compared to the same period last year.