Glossary

A B C D E F G H I K L M N O P Q R S T V X Y Z
  • ADI

    ADI stand for Average Directional Index. This is used as a technical bareometer of the strength or weakness of trends in financial markets.
  • Anonymous Trading

    Traders can opt not to disclose their identity while making offers or bids on the financial markets.
  • Appreciation

    The increase in monetary value of any financial instrument in response to the market.
  • Arbitrage

    The simultaneous purchase and sale of an asset in order to increase profits with minimal risks.
  • Ask Rate

    The lowest price a seller is willing to sell a financial asset, also known as an offer.
  • Asset

    The instrument that a contract is based upon. This could be a stock, bond, or commodity.
  • Asset Location

    An investment strategy that aims to balance risk and reward by distribute a portfolio's assest according to a trader's goals and risk tolerance.
  • At the Money

    This term refers to a trade breaking even, meaing their neither a profit or a loss.
  • Attorney in Charge

    An individual authorized to make transactions on the financial markets on behalf of the trader.
  • Authorized Dealer

    A certified entity that engages in foreign currency transactions.
  • Away from the Market

    An expression used when a buy or sell price deviates from the assets market price.
  • Altcoin

    This term refers to low market cap cryptocurrencies. It originated as a term to describe all cryptocurrencies "alternative coins" other than bitcoin.
  • Aussie

    A slang term for the AUD/USD currency pair.
  • Balance of Payments (BOP)

    A record that tracks a country's transactions over a particular period of time.
  • Balance of Trade

    The difference in value between a country's imports and exports over a particular period of time.
  • Bank Rate

    The interest rate that the central bank of a country gives loans to domestic comercial banks.
  • Bar Charts

    A common diagram used to study the price action of currency pairs.
  • Base Currency

    A term used in trading Foreign Exchange. When quoting currency pairs, it is the first currency that you trade the secondary/quoted currency against. Example: EUR/USD - the Euro is the base currency, and the US Dollar is the quote currency.
  • Bear

    An investor who believes that the price of a particular asset will fall and attempts to profit from a decline in stock prices.
  • Bear Market

    The financial market in which asset prices are falling, encouraging selling.
  • Bid

    The selling price of a specific financial asset.
  • Big Figure

    The first two to three digits of a Foreign Exchange rate or price.
  • Blue Chip

    Shares of well-established companies, considered to be a reliable investment.
  • Break Even

    This is when there is no profit or loss experienced when making a transaction.
  • Bretton Woods Agreement

    An agreement for an international monetary system. This agrement was signed in 1944 in the United States.
  • Broker

    A person who buys and sells financial assets as a middleman between retail traders and established financial coporations.
  • Bull

    An investor who believes that the price of a particular asset rise fall and attempts to profit from an increase in stock prices.
  • Bull Market

    The financial market in which asset prices are rising, encouraging buying.
  • Block

    A collection of data defining transactions that too place in a particular period of time. After being published, blocks cannot be changed and therefore are linked with other blocks to creat a chain of data.
  • Blockchain

    A ledger of transactions made in cryptocurrencies that are recorded chronologically.
  • British Pound

    A slang term for the Currency of the United Kingdom, short for the Sterling Pound.
  • Buy Limit Order

    An order to buy a security at or below a specified price.
  • Call Option

    An agreement that allows a buyer the option to buy a financial asset at a specified price with in a particular period of time. The buyer however is not obligated to purchase the asset.
  • CCI

    CCI stands for Commodity Channel Index. This is a technical trading tool regularly used to measure when a financial instrument has been overbought or oversold.
  • CFD

    CFD stands for Contract for Difference. This is a contract between an investor and an investment instituation. At the end of the contract, the parties involved exchange the monetary difference between the opening and closing prices of the financial instrument involved in the contract.
  • Commission

    A fee paid to the brokerage firm that facilitated a transaction.
  • Commodities

    This refers to raw materials including precious metals, oil, and coffee.
  • Commodity Pairs

    The foreign exchange pairs that are highly correlated to commodity fluctuations in the global financial markets. These three pairs are USD/CAD, AUD/USD, and NZD/USD.
  • Counter Currency

    A term used in trading Foreign Exchange. When quoting currency pairs, it is the second currency that you compare against the base currency.
  • CPI

    CPI stands for Consumer Price Index. A statistical measurement that examines changes in the purchasing power of a currency and the inflation rate.
  • Cross Currency Transaction

    A transaction that involves two or more currencies being traded at the same time.
  • Currency

    A financial asset that can be traded, often in pairs.
  • Currency Trading

    The exchange of one currency for another currency.
  • Centeralization

    Any system that is controlled by trusted parties, such as banks or money transmitters. All financial assets other than cryptocurrency have a centralized market.
  • Cable

    A slang term in Forex trading for the currency pair GBP/USD (British Pound vs. US Dollar).
  • Correlation

    A statistical term for establishing a relationship between two or more independent assets.
  • Day Trading

    This is when positions on the market are opened and closed on the same day, rather than holding the positions overnight.
  • Decentralization

    Cryptocurrency has allowed for decentralization of the markets. Unlike all other financial assets, cryptocurrency does not need to be traded by a trusted party.
  • Deficit

    This occurs when liabilities (losses) exceed assets (profits).
  • Demo Trader

    An account that uses virtual money, allowing a potential investor to get acclimated to trading in the market before investing real money.
  • Depreciation

    The decrease in monetary value of any financial instrument in response to the market.
  • Derivative

    A financial contract with a value deriving from an underlying variable asset.
  • Dividend

    A portion of a company's profits paid to shareholders on a regular schedule.
  • DAX

    Germany's leading stock index is called Deutshe Atkien Xchange, or DAX for short.
  • Dealing Desk

    This is where a dealer facilitates transactions.
  • Depth of Market

    The volume of open buy and sell orders for a particular currency pair at a particular point in time.
  • Earnings Per Share (EPS)

    The portion of a company's profits allocated to each share of common stock.
  • ECN Broker

    ECN stands for Electronic Communication Networks. An ECN Broker is a financial expert that uses ECN's to allow clients direct access to the markets.
  • Expert Advisor

    An automated trading robot within the trading platform that allows the analytical and trading processes to be carried out with limited manual control.
  • Expiry Time

    The date and time when a trade involving a financial instrument expires.
  • European Central Bank (ECB)

    The European Central Bank is responsible for the monetary policy of countries that have adopted the Euro as their currency.
  • Exotic

    Exotic currencies are those that are less traded than the major currencies.
  • Federal Reserve

    The central bank of the United States, responsible for overseeing the financial system of the country. This is the leading financial instituation in the world.
  • Fibonacci

    A common technical tool used by analysts to identify potential levels of support and resistance based on key numbers.
  • Fill

    The act of executing a transaction on a trading platform.
  • Financial Instrument

    The asset that is used in a trade. This could be a stock, bond, or commodity.
  • Flat

    This describes a situation when a trader does not have any running positions in the market.
  • Forex

    A slang term for Foreign Exchange.
  • Fundamental Analysis

    A method of market analysis used to evaluate related economic, financial and other qualitative and quantitative factors that affect the performance of a particular financial instrument.
  • Fiat

    This is term used to describe traditional currencies as opposed to cryptocurrencies.
  • FUD

    FUD is an acronym that stands for fear, uncertainty, and doubt. It is often used by traders to reference the negative attitude surrounding cryptocurrency.
  • Gap

    The difference in value between the closing price of one trading period and the opening price of the following trading period.
  • GDP

    GDP stands for Gross Domestic Product. It determines the total worth of a country's services and produced goods with in a particular time period, and is used to gauge the economic standing of a country.
  • GTC

    GTC stands for Good Till Cancelled. This is an order to buy or sell a specific financial asset at a specific price, that is only valid until a trader chooses to cancel it.
  • Hedging

    A strategy used in order to reduce risk of losses when trading in the financial markets.
  • In the Money

    A phrase to describe a trader making a profit.
  • Index

    A weighted average of preselected stock prices that is used to measure a section of the stock market. Some popular indices are the NASDAQ, Dow Jones, and S&P 500.
  • Inflation

    A progressive increase in prices of goods and services within a country, which in turn reduces the purchasing value of that country's currency.
  • Interbank Rate

    The interest rate on loans that one bank will offer to another bank.
  • Initial Margin

    The first deposit a customer makes, which then determines their maximum trade size.
  • Initial Margin Requirement

    The minimum amount for a deposit to enter a trade position.
  • Interest Rate

    The fee paid for borrowing money. Interest rates fluxate as they are affected by Central Banks and inflation.
  • Introducing Broker

    A broker with a direct relationship with the client, but delegates the transactions and trades to another broker.
  • Japanese Yen

    The currency in Japan.
  • Jobber

    A term used for a trader who intends to make accumulated profits by opening and closing short-term positions.
  • Kill

    An order that cannot be wholly filled in the market will be cancelled or killed.
  • Kiwi

    A slang term for the New Zealand Dollar.
  • Lagging Indicatios

    Statistics that change after trends in the economy have already started to change.
  • Leading Indicatiors

    Statistics that help forecast a country's economic performance trends.
  • Leverage

    A financial tool that allows an investor to magnify their market exposure beyond their initial capital.
  • Liquidity

    The degree to which an asset can be bought or sold without affecting it's price.
  • Long

    Opening a buy position in the market is referred to as "going long"
  • Limit Order

    A direction to buy or sell an asset a specified price or better.
  • Line Chart

    A series of lines connecting multiple price levels over a particular time period.
  • Lot

    The standard number of units required to trade a financial asset, as determined by the exchange.
  • Margin

    The size of deposit needed to ensure the running positions in the market are kept active.
  • Margin Account

    An account provided by brokers that allows investors to buy securities borrowed funds.
  • Margin Call

    The requirement made by a broker that a trader makes an additional deposit to cover possible losses.
  • Market Maker

    A brokerage firm that buys and sells financial assets to provide liquidity to the markets.
  • Market Price

    The current price of a financial asset being traded in the market.
  • Market Risk

    The potential risk of loss when investing in a specific asset.
  • Mine and Yours

    Terms used to describe the intention to buy or sell. "Mine" is used when buying, and "yours" is used when selling.
  • Money Market

    A segment of the financial market involving transactions of financial assets with fast maturities and high liquidity.
  • Moving Acerage Convergence Divergence (MACD)

    A technical indicator used to determine the trend of the market.
  • Miners/Mining

    A miner's duty is to keep blockchains secure by confirming transactions and time-stamping entries.
  • Maximum Leverage

    The largest amount of leverage available on the initial deposit.
  • MetaTrader4

    The innovative trading platform used to provide brokerage services to traders in multiple financial assets.
  • Monetary Poilicy

    The policy regarding interest rates and money supply put in place by the central bank of a particular country.
  • Moving Average

    A technical indicator used to filter out the abnormalities to allow the focus to be on the statistical average of the original curve.
  • NASDAQ

    The largest electronic stock exchange in the United States.
  • Noise

    Abnormalities in the market that make it difficult to focus on the statistical averages used to make a trading decision.
  • NYSE

    New York Stock Exchange.
  • NFP

    Stands for Non Farm Payroll. A monthly report done by the United States Department of Labor, which is used to determine the status of the labor market, excluding farmers.
  • Net Position

    The value of a position after subtracting the price of the initial investment.
  • News Trader

    A trader who bases investment decisions on how global news announcements impact the markets.
  • NOK

    The currency symbol for the Norwegian Krone.
  • NZD

    The currency symbol for the New Zealand Dollar.
  • Open Order

    A position that is running in the market until the trader chooses to close it.
  • Order

    A request to a broker to perform a transaction of a financial instrument at a preset price.
  • Out of the Money

    A term used to describe a loss in trade.
  • Overnight Position

    A position that is kept open until the following trading day.
  • Overtrading

    The risky habit of engaging in excessive trading transactions without appropriate research.
  • Offer

    The price set by a seller at which they are willing to sell.
  • Options

    The opportunity, but not the obligation, to perform a transaction involving an asset.
  • Oscillators

    Technical analysis tools using an indicator that fluctuates between overbought and oversold levels, used to express buy and sell signals.
  • One Cancels the Other Order (OCO)

    Two transactions sunmitted at the same time, where the completion of one automatically cancels the other.
  • Payout

    The total amount of earnings from a successful transaction.
  • PIP

    Stands for Percentage In Point. The smallest unit of measurement used in Forex trading to determine exchange rates between multiple currencies.
  • Platform

    The system used to perform transactions provided by a brokerage firm.
  • Price.Earnings Ratio (P/E)

    The ratio used to value a company by comparing it's current share price to it's per share earnings.
  • Principal Value

    The starting capital that a trader invests for transactions in the financial market.
  • Put Option

    An agreement that allows a seller the option to sell a financial asset at a specified price with in a particular period of time. The seller however is not obligated to sell the asset.
  • Private Key

    Electronic signature used to unlock cryptocurrency wallet and sign transactions.
  • Public Key

    The cryptocurrency code given out when requesting a payment.
  • Pump and Dump

    The process of inflating an assets value by purchasing a large quantity in the hopes that others will follow suit. Afterwords, the initial buyer will sell their assets in the hopes to make a profit from the inflated price.
  • Quantitative Easing

    A method used by central banks to encourage economic growth. This is done by purchasing government securities in order to increase capital and liquidity in financial institutions.
  • Quote Currency

    A term used in trading Foreign Exchange. When quoting currency pairs, it is the second currency that you trade against the first currency.
  • Quote

    The most recent price a buyer and seller have agreed upon.
  • Rate

    A rate/exchange rate is the compared price of one currency to another.
  • Rebate

    The portion of interest or dividends on an asset that is returned to the investor at the end of a trade.
  • Relative Strength Index (RSI)

    A technical indicator that measures if a financial instrument has been overbought or oversold.
  • Risk Capital

    The size of a deposit that an investor is willing to risk.
  • Robot

    Software that indicates when to open or close a position in the market.
  • Rollover

    The act of swaping a matured contract prior to it's expiration date, with a new contract. The difference in price between the two contracts is adjusted.
  • Resistance

    The price at which a financial asset peaks, before multiple investors decide to sell the asset.
  • Risk Management

    One or more strategies used in order to reduce financial risk when trading in the financial markets.
  • Scalping

    A strategy used by traders who make many small short-term transactions, looking to increase their profits with multiple small increments that can compound.
  • SEC

    Stands for the US Securities and Exchange Commission.
  • Security

    Any financial asset that can be traded.
  • Short

    Opening a buy position in the market is referred to as "going long"
  • Slippage

    The price difference between an assets displayed value and the exact value when a transaction occurs.
  • Spot Price

    The current price an asset can be bought or sold in the marketplace.
  • Spread

    The difference in value between the ask price and the bid price of a financial asset.
  • Stochastic

    An oscillating indicator used to determine the change in price of a financial asset from one closing period to the next.
  • Stock

    A share in the ownership of a company and the respective assets and earnings.
  • Stop Loss Order

    An order given by a broker to limit an investor's loss by making them sell when a security reaches a certain price.
  • Strike Price

    An asset's value when it is purchased or sold.
  • SWAP

    The process of exchanging value of one investor's assets with another investor's assets.
  • Security Exchange Commission (SEC)

    U.S. government agency that regulates national securities industry, stock markets, and electronic securities agency.
  • Satoshi

    Equivalent to the eighth decimal place, this is the smallest unit of bitcoin.
  • Sell Limit Order

    The process of limiting the price on a transaction.
  • Sell Stop

    An order for a limit order to become a market order once it falls below the current market price.
  • Short Position

    Selling first and buying later to produce a profit or loss from the difference.
  • Spot

    Taking the value of the current date and selling at that price, but settling in the following two days.
  • Sterling

    A name for the British Pound (GBP), also called the pound sterling.
  • Stop-Buy

    An order to buy when the currency price is above the current market.
  • Technical Analysis

    Studying past market data to influence future of financial instruments.
  • Trader

    A person who invests in transactions on the markets.
  • Trailing Stop Loss

    The ability to automatically adjust the limit price threshold to be closer to a more favorable market price.
  • Transaction Date

    The moment when trading assets occurs.
  • Take Profit

    A type of limit order that determines the specific price to close an open position in order to profit.
  • Trading Platforms

    A software used by investors to trade forex.
  • Transaction

    The process of exchanging goods, services, and financial assets between a buyer and a seller.
  • Trend

    The general direction of the market.
  • Under-Valuation

    If an exchange rate does not surpass it's purchasing power, it is considered undervalued.
  • Unemployment Rate

    The rate of people in the workforce without jobs.
  • US Dollar

    The currency in the United States of America.
  • Value Date

    The final settlement date decided by the parties involved in a financial deal.
  • Variation Margin

    The extra amount of money needed to constitute for losses when a broker's balance falls beneath the required minimum.
  • Volatility

    The measurement used to describe the fluctuation of the price of a financial instrument over a specific amount of time.
  • Wire Transfer

    The process of transferring money electronically from one financial institution to another.
  • World Bank Group

    A support organization that offers its' technical and financial advice to developing countries worldwide.
  • Wallet

    The place where cryptocurrencies are stored. There are five types of crypto wallets; software wallets, mobile wallets, web wallets, paper wallets, and hardware wallets.
  • Whipsaw

    A sharp price movement being trailed by a sharp repeal.
  • X

    Depicting a mutual fund, this is a NASDAQ stock symbol.
  • XE

    Stands for Xpress Engine. A prominant financial site that provides helpful tools for traders.
  • XAG

    The currency symbol for the precious metal silver. Silver can be used in financial exchanges and typically maintains a high price.
  • XAU

    The currency symbol for gold.
  • XAU/USD

    The gold (XAU) to U.S. dollar (USD) exchange rate can be monitored online and is consistently changing.
  • ADI

    ADI stand for Average Directional Index. This is used as a technical bareometer of the strength or weakness of trends in financial markets.
  • Yield Curve

    The use of a graph to exhibit the correlation between interest rate and the maturity of the debt asset for a trader.
  • ZAR

    The currency symbol for the South African Rand.
  • Zero-Bound

    When interest rates nearly reach zero percent making it challenging for central banks to measure the expansion of the economy.

The vocabulary surrounding trading may seem foreign to a beginner. We have collected all the essentials terms and definitions to alleviate that stress and give you the confidence to trade effectively.

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