A significant decline in market prices, leading to widespread panic and uncertainty among traders.

A comprehensive plan outlining how to enter and exit trades to maximize profits while managing risk.

The process of identifying, assessing, and prioritizing risks, followed by coordinated efforts to minimize their impact.

The buying and selling of options contracts, which give the holder the right to buy or sell an asset at a predetermined price.

The study of how emotions and behaviors of market participants influence trading decisions and market movements.

A proactive strategy designed to address potential market crises and minimize losses during unforeseen events.

A method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume.

The buying and selling of futures contracts, which obligate the buyer to purchase an asset at a predetermined future date.

The examination of past market events to identify patterns and inform future trading strategies.

A statistical measure of the dispersion of returns for a given security, indicating the level of risk associated with it.

The reduction of one’s capital after a series of losing trades, often measured from peak to trough.

An order placed to sell a security when it reaches a certain price, aimed at limiting potential losses.

A measure comparing the potential profit of a trade to its potential loss, guiding traders in decision-making.

The practice of borrowing funds from a broker to trade financial assets, amplifying both potential gains and losses.

The ease with which an asset can be converted into cash without affecting its market price.

The process of dividing investments among different asset categories to optimize risk and return.

The process of testing a trading strategy on historical data to evaluate its effectiveness before live trading.

Statistical measures that provide insights into market trends and potential future movements.

A market condition characterized by rising prices and investor optimism.

A market condition characterized by falling prices and investor pessimism.

Mental obstacles that prevent traders from making rational decisions, often exacerbated during crises.

The ability to maintain emotional stability and make rational decisions during market volatility.

A process of evaluating possible future events by considering alternative outcomes.

The study of the mental and emotional factors that influence trading behaviors and decisions.

A method of evaluating securities by examining economic factors, financial statements, and industry conditions.