One subject
Sentiment and positioning
3 lessons, 22 glossary terms and 7 market guides cover this across the academy. Each one links to its own page, and nothing is repeated here.
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The curriculum
3 lessons cover this.
In curriculum order, which is the order you would meet them.
The glossary
22 terms belong here.
Alphabetical, each defined in one sentence on its own page.
- Advance-decline lineA running total of how many shares rose minus how many fell each session, read as a measure of how broadly an index move is supported.
- AussieDealer shorthand for the Australian dollar quoted against the US dollar, one of a handful of desk nicknames that persist because they are faster to say than a currency code.
- Bear marketA sustained decline in prices, conventionally marked once a market has fallen about twenty percent below a recent peak, though that threshold is a reporting convention rather than a defined term.
- Bull marketA sustained rise in prices, conventionally dated from a recovery of about twenty percent above a recent low, though the threshold is journalistic shorthand rather than a defined term.
- Buy sideThe institutions that deploy capital, pension funds, asset managers and insurers among them, as distinct from the sell side firms that price, execute and research on their behalf.
- Commitment of Traders reportThe Commitment of Traders report is a weekly breakdown of open interest in United States futures markets by category of participant, published each Friday for positions held the previous Tuesday.
- Consensus forecastA consensus forecast is the central estimate of a survey of economists taken before a data release, and it is the number an outcome is judged against rather than the previous reading.
- DovishDescribing a policymaker or a statement that leans toward looser monetary policy, weighting growth and employment more heavily than the risk of rising inflation.
- Dow theoryA set of principles drawn from Charles Dow's editorials, holding that market movement runs in trends of three different lengths and that the averages must confirm one another.
- Implied volatilityImplied volatility is the volatility figure that, fed into an option pricing model, returns the option's traded price, so it states what the market is charging today for movement that has not happened yet.
- JawboningJawboning describes officials trying to move a market with public statements alone, most often a finance ministry or central bank commenting on the level or speed of a currency's move.
- Market sentimentMarket sentiment describes the prevailing disposition of participants towards an instrument or a market, inferred from surveys, positioning data and price behaviour rather than measured directly.
- Open interestOpen interest is the number of futures or options contracts opened and not yet closed, offset or delivered, counted once for each contract rather than once for each side.
- Order flowOrder flow is the stream of buy and sell orders arriving at a venue, studied as a record of what was transacted rather than a picture of where price has been.
- Precious metalA precious metal is a naturally occurring metal held largely for its scarcity and durability rather than consumed by industry, the traded set being gold, silver, platinum and palladium.
- Risk appetiteRisk appetite describes how willing participants are in aggregate to hold assets whose returns are uncertain, and it is inferred from what is being bought and sold rather than measured directly.
- Risk-on risk-offRisk-on risk-off names a market regime in which unrelated assets move as two blocs according to a single swing in appetite for uncertainty, rather than on the fundamentals particular to each of them.
- Safe haven currencyA safe haven currency is one that has tended to attract flows when risk appetite falls, the US dollar, the Swiss franc and the Japanese yen being the three most often described that way.
- Sentiment analysisSentiment analysis reads what participants already hold and expect, using surveys, futures positioning reports, options pricing and broker position data, rather than reading price or company fundamentals.
- Short squeezeA short squeeze is a sharp rise driven by short sellers closing, where each purchase made to close a short adds to the buying and pushes the price further against those still short.
- SpeculationSpeculation is taking market risk deliberately in pursuit of a gain from a change in price, as distinct from hedging, which takes a position to offset a risk already carried.
- Volatility indexA volatility index states how much movement the options market is pricing into an underlying market over a fixed forward window, conventionally the next thirty days, expressed as an annualised percentage.
The market guides
7 guides answer a question about it.
Standalone reference answers, entered laterally rather than worked through.
- Safe haven currenciesMarketsWhich currencies carry the label, the mechanisms behind the flow, and the episodes where it failed.
- What moves an indexMarketsEarnings expectations, the discount rate, the risk premium, sector mix, currency and index flows.
- The volatility index and what it measuresMarketsWhat a volatility index is computed from, how to read its units, and why it is not a mirror of equities.
- US ISM and PMI business surveysEventsHow a diffusion index is built, why its neutral level is the only reference point, and where it misleads.
- Euro area PMI and the flash release sequenceEventsHow the survey family is structured, the order the flash readings arrive in, and the limits of a survey.
- Central bank symposia and forward guidanceEventsThe three forms guidance takes, why a promise is an instrument, and the blackout conventions around it.
- Gulf equity markets and index inclusionStructureThe Gulf exchanges, the criteria index providers assess, and what a reclassification mechanically does.
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