What are altcoins? Altcoins, are alternative cryptocurrencies to Bitcoin. They were created
When learning about financial markets and how to trade, the so-called trading lingo is perhaps the hardest to understand. We compiled a list of essential trading terms for you below.
Essential trading terms for novice traders:
Ask: The selling price of a financial instrument, or better yet, the price a market-maker is keen to accept. It’s also often referred to as the offer price.
Aussie: Nickname for the AUD/USD currency pair; Ozzie is another common nickname.
Asian Session: The trading session of Asian Pacific, which happens between the hours of 23:00 to 08:00 (GMT +9 – Japan Standard Time).
Base Currency: The first currency in a currency pair (i.e., GBP in GBP/USD).
Bear market: When the market price is declining, traders are pessimistic about the asset.
Bull market: When the market price is ascending, traders are optimistic about the asset.
Bid: The price at which a seller is willing to buy a financial instrument.
Buy Position: An open position that represents anticipation that the market price will increase.
Buy Stop: A pending order for creating an open Buy position in the trader’s account, should the price of a specific instrument rise to a certain level.
Candlestick Chart: A data analysis method used by technical analysts to present numbers on a chart.
CFD (Contract for Difference): A financial contract that pays the differences between the opening and closing trades.
Close: A request from a trader to close his position when the market reaches a certain point.
Demo account: A practice account used by traders to practice or experience a certain broker’s platform.
Dealer: A broker’s employee that is responsible for accepting trades and executing orders.
Downtrend: Declining price action.
ECN: Which stands for Electronic Communication Network. It is the bridge linking smaller participants, AKA retail traders.
European Session: Also known as the London session, which happens between the hours of 07:00 to 16:00 (London).
Expert Advisor (EA): A piece of software that advises investors when to trade. EA’s adjusted to execute the trade automatically.
Exotics: Currency pairs that come from emerging economies. Exotics are always paired with major currencies.
Fill: An order that has been successfully executed.
Fill or Kill: An order type where if the order cannot be filled, then it will be canceled – A.K.A ‘killed.’
Floating Profit/Loss: The difference in value between the customer account’s equity and balance.
Gap: When there is a significant difference between the two consecutive quotes.
GDP: Gross Domestic Product, which is the total value of a country’s production, revenue, or outflow generated within its physical borders.
Handle: Every 100 pips in the forex market starting with 000.
Hawkish: A country’s monetary policymakers are referred to as ‘hawkish’ when they believe that higher interest rates are needed, usually to combat inflation or restrain rapid economic growth or both.
Hedge: The position or combination of positions that reduces the risk of the primary position.
IMM Session: The trading session starting between 8:00 am – 3:00 pm GMT-5, New York.
Inflation: An economic condition that happens when prices for consumer goods rise, and as a result, destroys purchasing power.
Interbank Rates: FX rates that large international banks quote to each other.
Stay tuned for part 2 of our guide to the essential vocabulary for novice traders!