SOME COMMON TERMS USED IN THE FINANCIAL MARKET

Greetings,

It's your friend @mondraye and today I would be sharing another important content on some terms every trader should know.

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It is no new thing that trading has grown the become a career and just like everyother career field, there are unique terms used by traders. It doesn't matter if you trade forex, Crypto, commodities, or stock. As long as you are into trading, you are expected to get accustomed to these terms in other to keep up with useful information concerning the market.

IMPORTANT TERMS EVERY TRADER SHOULD KNOW

• FUD (Fear, Uncertainty, and Doubt)

FUD is a financial market term used primarily in discrediting a financial company or project. It achieves this by spreading false news about it thus instigating fear in the minds of users.

This leads to a drop in the value of the project asset thereby giving those behind the FUD an opportunity to buy at a lower price.

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• FOMO (Fear of Missing Out)

Fear of Missing Out is a term used in describing the emotional control of traders who usually jump in to purchase an asset usually due to an increase in the value of the asset. This most times turns negative on these traders as they end up buying at the top thereby lossing money when those that bought at the bottom decides to withdraw their funds which eventually leads to a drop in price.

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• HODL

This is one of the most popular terms especially in cryptocurrency. It is a short term for "Hold On for Dear Life. The term was invented during a Bitcoin forum in 2013 as a result of the mistake "I am hodling".

This is a way of telling people to trust the in future of cryptocurrency by telling them to buy and hold with an assurance that the value will increase over time.

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• BUIDL

This term is derived form HODL and it describes the relentlessness of blockchain developers who continues to build and develop the blockchain regardless of the downturns.

This shows their strong beliefs on cryptocurrencies and blockchain thus making them to continue building irrespective of the current situation.

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• DYOR (Do Your Own Research

This is also a popular term in the financial market. Due to the volatility of the financial market, it is always a common thing to tell investors and traders to do their own research before investing in other to increase their chances of making a wise investment.

With this advice being common, people developed a more short way of writing it and that is what we have as DYOR.

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• KYC (Know Your Customer)

KYC is also a term related to the financial market. It is common with centralized exchanges which requires users to pass some series of identity verification before granting them access to their features.

This verification includes the provision of some personal data such as name, address, photo, etc. These details are expected to be unique to each user for it is a way of ensuring authenticity of users.

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• ATL & ATH (All Time Low/High)

These are terms used in describing yjr highest an art price have attentioned in value and the lowest it has gone since its existence.

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• ROI (Return On Investment)

ROI is a popular term in the finance that describes the profit made on investment. It is another word used instead of "gains" and it is calculated using a formula.

_{ROI = (Current value - Original cost) / Original cost}

Let's say you bought an asset at a price of $500 in 2020 and the current value is now $1500.

_{Calculating the ROI we have}

ROI = (1,500 - 500) / 500
ROI = 1000/500
ROI = 2

This shows that you have made 200% on your investment.

Summary,

There are numerous terms used in the financial market in explaining certain market conditions and investors behaviors. These terms are numerous but with this lesson, we can be rest assured to have known some of the popular ones.

_{10% to @Tron-Fan-Club}