Sébastien Haller

The dollar pairs that make up the crosses (ie EUR/USD and USD/JPY are the components of EUR/JPY). Selling the cross through the components refers to selling the dollar pairs in alternating fashion to create a cross position.

Collateral is something pledged as security for the repayment of a loan, which can become forfeited in the event of loan default. Examples of collateral include real estate, vehicles, cash, and investments.

A choppy market is when an asset’s price shows no clear trend but instead experiences many smaller fluctuations.  A choppy market can occur when buyers and sellers of a market are at an equilibrium. If there is high liquidity (large trading volumes) in a market and neither bears nor bulls can dominate, the result is often a choppy market. Choppy markets are associated with rectangular price ranges. A rectangular price range is a pattern that occurs on charts that continuously hits the same support (the lower limit) and resistance (the upper limit) levels. This prevents the market from breaking out into a trend, as its price is instead confined between these two levels – creating a rectangle. Traders often look to profit from price trends, so can find it difficult to successfully trade a choppy market. Those who do trade choppy markets to try take advantage of small price movements over a short-term period, but more volatile markets are likely to present greater opportunities for most traders. What are good technical indicators for choppy markets? A good technical indicator to use to identify choppy markets is the Average Directional Index (ADX). The ADX indicator will not only help to identify whether a market is experiencing a price trend, but it will also show the strength of the trend. The main characteristic of a choppy market is that there is little or no trend, so in this case we can use the ADX indicator to identify the strength of a trend in a market. If it indicates there’s no trend, we know a market is choppy and can trade accordingly. The ADX works by using the positive (+DI) and negative (-DI) direction indicator to help traders determine whether they should go long or short on a market based on the direction and strength of the trend. When the ADX is above 25, this shows that the trend is strong. If the ADX is below 20, this implies a non-existent trend – at which point a choppy market has been identified.

A closing price is a market’s final price level before it closes for the day. A market’s closing price is used as the price level shown on a typical line chart. Closing prices are the benchmark used to measure a market’s daily performance. A market’s price can fluctuate during the day, but a close price is a fixed number that can not only be compared with previous close prices, but also compared with close prices of other markets.

A period of range-bound activity after an extended price move.

The tendency of an economic crisis to spread from one market to another.

A bond is a fixed-income investment that represents a loan made by an investor to a borrower (who is typically corporate or governmental). It can be illustrated as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.

A financial broker is a third-party coordinating the sale of financial securities between parties selling securities and those purchasing them. Brokers are individuals or firms acting as intermediaries between investors and trading exchanges. Exchanges only accept orders from their members, either individuals or firms. Therefore, traders and investors require exchange members’ services to make financial transactions. Brokers get compensated for their services in several ways; commissions, fees or paid directly by the exchange.

A bull market describes any market in which prices are rising or are expected to rise imminently. Typically applied to stock markets, the term can also be used for anything that is traded, including currencies and commodities. A bull market is the opposite of a bear market.

Taking a long position on a product.