Financial Dictionary

A rally is a sustained rise in prices over a short period. It can happen within a longer uptrend or as a bounce in a downtrend.

Range trading means buying near support and selling near resistance while price moves sideways. It works until price breaks out of the range.

A real interest rate is the nominal interest rate minus inflation. It shows the true return on cash or bonds after rising prices.

A recession is a significant, broad decline in economic activity, often defined as two consecutive quarters of falling GDP. Central banks tend to cut rates as one approaches.

The Relative Strength Index measures the speed and size of recent price changes on a scale of 0 to 100, usually over 14 periods. Readings above 70 suggest overbought conditions and below 30 suggest oversold.

A requote is when a provider offers a new price because the market moved before an order could be filled at the requested price. The trader can accept or decline it.

The Reserve Bank of Australia sets the cash rate for Australia. Its decisions move the Australian dollar.

Resistance is a price level where selling has repeatedly stopped a rise. A clear break above it can turn the level into support.

Retail sales measure the total value of goods sold by shops each month. Because consumer spending drives much of growth, the figure is a key guide to the economy.

A retracement is a temporary move against the main trend that does not reverse it. Fibonacci levels are often used to measure how deep it goes.

Return on equity is net profit divided by shareholders' equity. It shows how efficiently a company turns shareholders' money into profit.

Revenge trading is opening impulsive trades to win back recent losses quickly. It usually leads to larger positions, weaker decisions and bigger losses.

Revenue is the total income a company earns from selling goods or services before any costs. It is often called the top line.

A reversal is a change in the direction of a trend. Traders look for chart patterns, divergence or volume to confirm it.

A rights issue lets existing shareholders buy new shares, usually at a discount, in proportion to what they already hold. It raises money for the company but can dilute shareholders who do not take part.

A rising wedge is formed by two upward sloping trendlines that converge. It is usually read as bearish, with a break below the lower line taken as the signal.

Risk management is the set of rules a trader uses to limit losses, such as stop losses, position sizing and limits on leverage. It aims to keep any single loss small enough to recover from.

Risk on and risk off describe swings in market mood. In risk on periods traders favour shares and higher yielding currencies, and in risk off periods they move to safe havens such as the dollar, yen and gold.

The risk reward ratio compares the amount a trader stands to lose on a trade with the amount they aim to gain. A ratio of 1 to 3 means risking one unit to target three.

A risk warning is a statement that explains the main risks of a product. CFD providers often must show one, sometimes including the share of retail accounts that lose money.

A rounding bottom is a gradual, U shaped reversal pattern after a long decline. A rise above the starting level of the curve is read as a bullish signal.

The Russell 2000 tracks about 2,000 small US companies. It is a guide to the health of smaller, more domestically focused businesses.