Trading Glossary

Take a look at our list of the financial terms associated with trading and the markets.

Refers to the policy direction of officials, divided into hawks and doves. Policy austerity is generally referred to as hawkish, with officials supporting higher interest rates and lower inflation; This often means an appreciation of the national currency and a depreciation of risk assets.

Head and Shoulders

A technical analysis term that refers to the pattern formed by the stock price after experiencing the following movements: 1. Rise, hit a certain high and then fall back, 2. Rise again, touch a higher level than the previous high and then fall back. 3. Rise again, but fail to rise above the previous high and then pull back, forming a third high. Since the second high is the highest of the three highs, it looks graphically like a person's head and shoulders on both sides. Generally, if this pattern is completed, the uptrend may reverse downward as the price subsequently breaks below the neckline formed by the two lows. 


Investors reduce their exposure to position risk in order to reduce the risk arising from changes in asset prices. Commonly used hedging tools are options, futures, CFDs, etc. For example, the cost of raw materials for an oil refinery depends on the price of crude oil, and in order to avoid increased expenditure due to higher oil prices, short crude oil can be used to lock in net expenses. It should be noted that hedging often has its own costs. In practice, investors use less full hedging and instead use partial hedging, where a portion of the position they hold is hedged against risk. 

Hedge Fund

Funds that actively invest in domestic and foreign markets to earn absolute returns through various trading commodities (derivatives), trading strategies (shorting and leverage). 

Heikin Ashi

The improved expression of the candlestick is based on a combination of the previous opening and closing prices and the current opening, high, low and closing prices. The main intention is to reduce the noise of the market, the current trend, and potential turning points which can be judged simply from the color of the average K line and the length of the upper and lower shadows. 

High-Frequency Trading

Generally refers to the speed of entering and leaving the market in milliseconds to calculate the trading method, because manual trading cannot achieve this trading style for a long time, often through the programmer to experience the trader's trading ideas into an algorithm, by the algorithm for the market for 24 hours uninterrupted monitoring and trading. 

Historical Volatility

Represents the annualized standard deviation of the underlying price and is used to measure the degree of price volatility over time. Unlike implied volatility, it does not require the option pricing formula, but uses the standard deviation of price fluctuations over the past period of time to calculate volatility, so it is relatively immediacy compared to implied volatility. 


Originated from a "I AM HODLING" community sharing article, to the effect that no matter how tragic the price of Bitcoin, it will firmly hold Bitcoin, full of confidence in the long-term investment. 

Hold Time

It is often used to describe autonomous delay, in which a liquidity provider actively extends the waiting time after receiving an order to decide whether to close or reject an order. This is also known as the last wait-and-see window. For traders, the longer they keep it, the higher the wasted time cost side, and the more easily order information is misused, which is not good for traders. 

Horizontal Channel

A technical pattern of candlesticks consisting of two horizontal trend lines that provide horizontal resistance and support, respectively. When a horizontal line appears when multiple highs connecting the K-line and a horizontal line appears at the same time when multiple lows connecting the K-line also appear, the horizontal channel is formed. In the horizontal channel, the candlestick is supported by the lower edge of the channel, while at the same time being resisted by the upper edge of the channel. Once the candlestick has a breakthrough, it represents the end of the current channel structure, and the candlestick will often continue to move forward in the direction of the breakout. 


It refers to the excessive inflation rate, the rising price level, and the rapid depreciation of the national currency. The monthly inflation rate of more than50% is generally referred to as hyperinflation. The biggest crisis of hyperinflation is that people lose confidence in the national currency, and the currency loses its value, resulting in a depreciation that is difficult to control. People use foreign currencies to settle their assets. Hyperinflation often stems from a massive increase in the money supply.