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Head and shoulders

A bearish reversal pattern that forms when a stock’s price rises to a peak and then falls, followed by a second rise to a higher peak, and then falls again.

Head fake

A false signal that leads traders to believe that a particular trend is emerging in the market.

Hedge

Hedging is a risk management strategy that involves adjusting asset positions to minimise potential losses from price fluctuations, often using futures contracts, options, or other financial instruments.

Hedge fund

An advanced, private investment fund managed by professionals for wealthy investors, aiming to profit in any market condition, typically with a minimum one-year holding period.

Hedge ratio

A hedge ratio measures risk exposure in a position, with 0% indicating an unhedged position and a ratio between 1-100% representing a hedged one, calculated as:

Hedge Ratio = Value of the Hedge Position / Value of the Total Exposure

Heikin-Ashi

A candlestick chart that minimises price noise, using colorless candlesticks with wicks for selling pressure in uptrends and colored candlesticks with tails for buying pressure in downtrends.

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