Finance glossary
Clear, practical explanations of the terms you meet on charts, stock pages and in market news. Each entry covers what the term means, how it is calculated, how to read it with a worked example and where it tends to mislead — with links to live prices so you can see it in action.
29 terms
Technical analysis
Indicators and chart tools that read price and volume: trend, momentum and volatility.
- Candlestick chartA candlestick chart shows each period's open, high, low and close as a candle: the body spans open to close, and the wicks reach the high and low.
- Support and resistanceSupport is a price zone where buying has repeatedly stopped declines; resistance is a zone where selling has repeatedly capped rallies.
- Moving average (SMA and EMA)A moving average smooths price by averaging the last N closes, updating with each new bar. The simple (SMA) and exponential (EMA) types are the most used.
- Relative Strength Index (RSI)The Relative Strength Index (RSI) is a 0–100 momentum oscillator that compares recent gains with recent losses to show how stretched a price move is.
- MACD (Moving Average Convergence Divergence)MACD is a trend-following momentum indicator built from the gap between a 12- and a 26-period exponential moving average, plus a 9-period signal line.
- Bollinger BandsBollinger Bands plot a 20-period moving average with bands two standard deviations above and below it, so the envelope widens and narrows with volatility.
- Average True Range (ATR)The Average True Range (ATR) measures how much an asset typically moves per period, gaps included, by averaging the 'true range' over 14 periods.
- Fibonacci retracementFibonacci retracements mark where a pullback might pause by cutting a prior move at 23.6%, 38.2%, 50%, 61.8% and 78.6% of its length.
Fundamentals
How to size up a company: valuation, earnings and what it pays out to shareholders.
- Market capitalization (market cap)Market capitalization is the total market value of a company's shares: share price × shares outstanding. For crypto it is price × circulating supply.
- P/E ratio (price-to-earnings)The price-to-earnings (P/E) ratio divides a share price by earnings per share, showing how much investors pay for each unit of annual profit.
- EPS (earnings per share)Earnings per share (EPS) is a company's net profit divided by its number of shares — the slice of annual profit that belongs to each share.
- Dividend yieldDividend yield is a stock's annual dividend per share divided by its share price — the cash return you receive each year relative to what you pay.
Risk & portfolio
Measuring risk, and building a portfolio you can actually live with.
- VolatilityVolatility measures how widely an asset's returns swing around their average, usually as the annualised standard deviation of daily returns.
- Maximum drawdown (MDD)Maximum drawdown is the largest peak-to-trough fall in an investment's value over a period, expressed as a percentage of the peak.
- Beta (β)Beta measures how strongly a stock tends to move with the overall market: 1 moves in line, above 1 amplifies market swings, below 1 dampens them.
- CorrelationCorrelation measures how closely two assets' returns move together, on a scale from −1 (opposite) through 0 (unrelated) to +1 (in lockstep).
- DiversificationDiversification means spreading money across investments that don't move in lockstep, so a loss in one is cushioned by the others — lowering risk.
- Sharpe ratioThe Sharpe ratio measures return per unit of risk: an investment's return above the risk-free rate, divided by the volatility of its returns.
- Compound interestCompound interest is interest earned on both your original money and the interest it has already earned, so growth accelerates over time.
- Dollar-cost averaging (DCA)Dollar-cost averaging means investing a fixed amount at regular intervals, whatever the price — so you buy more units when prices are low and fewer when high.
Crypto
The mechanics behind Bitcoin and the wider crypto market.
Orders & trading
Order types and the mechanics of getting into and out of a position.
Macro & rates
Inflation, interest rates and the forces that move every market at once.
- InflationInflation is the rate at which the general level of prices rises, eroding the purchasing power of money. It is usually measured with a consumer price index.
- Interest rate (policy rate)An interest rate is the price of money — what borrowers pay and savers earn per year. Central banks set a policy rate that ripples through every market.
Markets & indices
How markets are measured, from index construction to bull and bear cycles.
- Stock market indexA stock market index tracks the combined performance of a basket of stocks — such as the S&P 500 or BIST 100 — as a single number in points.
- Bull marketA bull market is a sustained rise in prices, commonly defined as a gain of 20% or more from a recent low, usually driven by strong earnings and optimism.
- Bear marketA bear market is a sustained decline in prices, commonly defined as a fall of 20% or more from a recent peak, usually amid widespread pessimism.
- ETF (exchange-traded fund)An ETF (exchange-traded fund) is a fund that holds a basket of assets — often tracking an index — and trades on a stock exchange like a single share.
- BIST 100The BIST 100 is the main stock index of Borsa Istanbul. It tracks the 100 largest and most liquid listed companies in Turkey and is quoted in Turkish lira.