Z-score (Zscore)
A statistical measurement that describes a value’s relationship to the mean of a group of values. In trading, it’s used to determine how far away a particular price is from the average price, measured in terms of standard deviations. A high Z-score may indicate an overbought condition, while a low Z-score may indicate an oversold condition.
Open Interest (OI)
The total number of outstanding derivative contracts (like futures or options) that have not been settled. Open interest gives a measure of market activity, where an increase suggests new capital entering the market, and a decrease indicates positions are being closed.
Relative Strength Index (RSI)
A momentum oscillator used to measure the speed and change of price movements. RSI ranges from 0 to 100 and is typically used to identify overbought (above 70) or oversold (below 30) conditions.
Simple Moving Average (SMA) and Exponential Moving Average (EMA)
SMA: The average price of a security over a specific period, calculated by summing up closing prices and dividing by the number of periods.
EMA: A type of moving average that gives more weight to recent prices, making it more responsive to new information.
Volume Weighted Average Price (VWAP)
The ratio of the value traded (price multiplied by volume) to the total volume over a particular time frame. VWAP is used to gauge the average price of a security over a period and is often used as a benchmark by institutional investors to trade near the market’s average.
SuperTrend
A trend-following indicator that works well in trending markets. It is plotted above or below the price based on the current trend. The SuperTrend indicator is based on the ATR (Average True Range) and helps identify possible trend reversals.
Market Trend
Refers to the overall direction in which the market or a specific asset is moving. Trends can be upward (bullish), downward (bearish), or sideways (ranging). Market trend indicators help traders identify the direction and strength of trends.
Moving Average Convergence Divergence (MACD) Histogram
A trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The histogram represents the difference between the MACD line and the signal line, showing changes in momentum.
Stochastic Oscillator
A momentum indicator that compares the closing price of a security to a range of its prices over a certain period. The stochastic oscillator is plotted as two lines, and it oscillates between 0 and 100, with readings above 80 indicating overbought conditions and below 20 indicating oversold conditions.
Index Price
The weighted average of prices from several different exchanges or sources. This is commonly used to provide a more reliable reference price for derivative contracts (like futures) or a fairer market value.
Mark Price (Implied Volatility – IV)
The mark price is used to prevent unfair liquidations and is calculated based on a combination of the index price and funding rates. Implied volatility (IV) is a critical factor for options pricing and represents the expected volatility of the underlying asset.
Premium Index
The difference between the futures price and the spot price of an asset. It indicates whether the market is in contango (futures price above spot price) or backwardation (futures price below spot price).
Klines (Candlestick Data)
A graphical representation of price movements over time, typically displayed as candlesticks. Each candlestick shows four price points: the open, high, low, and close. Klines are widely used in technical analysis to analyze market trends and patterns.
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