What is a Security?

What is a Security?

A security is a tradable financial asset that represents ownership, debt, or contractual rights. Securities include equities, bonds, and derivatives that can be packaged, priced, and transferred between market participants.

Major Security Categories

• Equity securities: Shares of ownership in a company that can generate dividends and capital gains.
• Debt securities: Instruments like bonds or notes that promise scheduled interest and principal repayment.
• Derivative securities: Contracts such as options, futures, or CFDs whose value is tied to an underlying asset.

Applying Security Analysis to Forex

• Track cross-asset performance to spot risk-on or risk-off rotations that fuel currency trends.
• Use bond yield spreads to anticipate policy divergence and potential moves in pairs like EUR/USD.
• Monitor derivative positioning data to gauge speculative sentiment around major currencies.
• Align your trade thesis with macro drivers from equity and credit markets to improve conviction.

Deep Dive

Most edges come from applying clear rules consistently. Expand your analysis beyond a single signal: add context from higher timeframes, recent volatility, session behavior, and catalysts. Define invalidation so a trade becomes obviously wrong fast, keeping losses small while letting winners compound.

Trader Checklist

• Higher‑timeframe bias aligns with the setup.
• Clear level or zone for entry with confluence.
• Pre‑defined stop beyond structure; 2–3R target.
• Session/liquidity supports follow‑through.
• No imminent high‑impact news unless planned.

Strategy Ideas

• Combine structure with momentum confirmation (break/close/acceptance).
• Use partials: scale out at first target; trail remainder.
• Journal results by session and pair to refine timing.

Risks and Limitations

• Thin liquidity widens spreads and distorts signals.
• False breaks around obvious levels—wait for acceptance.
• Overfitting indicators; keep the process simple and robust.

Example

Map bias on the daily chart, mark a zone, and wait on 1H for a close back above with rising participation. Enter on the retest; stop beyond the invalidation wick; target prior swing with room for extension. Record the outcome and context to iterate.