General

General trading terminology and concepts.

17 terms in this category

B

Backtesting

Backtesting tests a trading strategy on historical data to see how it would have performed, helping validate ideas before risking capital.

Bear Market

A bear market is an extended period of falling prices, typically defined as a 20% or greater decline from recent highs.

Blue Chip

Blue chip stocks are shares of large, well-established companies with a history of stable earnings, strong financials, and reliable dividends.

Bull Market

A bull market is an extended period of rising prices, typically defined as a 20% or greater rise from recent lows.

C

Correction

A correction is a 10-20% decline from recent highs, considered a normal and healthy part of market cycles.

I

Intraday Trading

Intraday trading means buying and selling securities within the same trading day, with all positions closed before market close.

L

Long Position

A long position is buying an asset with the expectation that its price will rise, allowing you to sell later at a higher price for profit.

M

Market Capitalization

Market capitalization is a company's total market value, calculated by multiplying stock price by total shares outstanding.

N

Nifty 50

Nifty 50 is India's benchmark stock index tracking the 50 largest companies on the National Stock Exchange (NSE), representing market performance.

O

Overnight Position

An overnight position is any trade held after market close, exposing you to price gaps and events that occur when markets are closed.

P

Paper Trading

Paper trading is simulated trading with virtual money, allowing you to practice strategies and test ideas without risking real capital.

Penny Stock

Penny stocks are low-priced, small-cap stocks trading below ₹10-20, known for high volatility, low liquidity, and speculative nature.

R

Rally

A rally is a sustained increase in asset prices following a decline or consolidation, often driven by positive sentiment or news.

S

Sensex

Sensex (Sensitive Index) is India's oldest stock index tracking 30 large companies on the Bombay Stock Exchange (BSE).

Short Position

A short position profits from falling prices by selling borrowed shares first and buying them back later at a lower price.

Short Squeeze

A short squeeze occurs when a heavily shorted stock rises sharply, forcing shorts to cover by buying shares, which pushes prices even higher.

V

Volatility

Volatility measures how much an asset's price fluctuates over time, indicating risk and potential reward from price movements.