Trading Glossary

The price at which a seller is willing to sell an asset. Also known as the "offer price." This is the price you pay when buying.

The practice of exploiting price differences between markets by simultaneously buying and selling an asset to profit from the discrepancy.

A technical indicator that measures market volatility by calculating the average range between high and low prices over a specified period.

Any cryptocurrency other than Bitcoin. Examples include Ethereum, Litecoin, and Ripple. Short for "alternative coin."

The price at which a buyer is willing to purchase an asset. This is the price you receive when selling.

The difference between the bid (buy) and ask (sell) prices. A key measure of liquidity and transaction cost.

When price moves above resistance or below support with increased volume, potentially signaling a new trend.

A market condition where prices are rising or expected to rise. Characterized by optimism and investor confidence.

A market condition where prices are falling or expected to fall. Typically defined as a decline of 20% or more from recent highs.

The first currency in a currency pair. In EUR/USD, EUR is the base currency. It represents how much quote currency is needed to buy one unit.

A decentralized, distributed digital ledger that records transactions across many computers in a way that cannot be altered retroactively.

An intermediary that facilitates trades between buyers and sellers, typically charging a commission or spread for their services.

A derivative contract that allows traders to speculate on price movements without owning the underlying asset. Profit/loss is the difference between entry and exit prices.

A type of price chart that displays the high, low, open, and close prices for a specific period. The body shows open-close range, wicks show high-low.

A fee charged by a broker for executing trades on behalf of a client. May be per-trade, per-lot, or based on trade value.

Two currencies quoted against each other (e.g., EUR/USD). The first is the base currency, the second is the quote currency.

A currency pair that doesn't include the US dollar, such as EUR/GBP or AUD/JPY. Also called "crosses."

A cryptocurrency wallet that is not connected to the internet, providing enhanced security against hacking. Examples include hardware wallets.

A trading style where all positions are opened and closed within the same trading day, avoiding overnight exposure.

The peak-to-trough decline in account value, usually expressed as a percentage. A key measure of trading risk.

When price action and an indicator move in opposite directions, potentially signaling a trend reversal.

Financial services built on blockchain technology that operate without traditional intermediaries like banks.

An automated system that matches buy and sell orders for securities, connecting traders directly to liquidity providers.

The current value of a trading account, calculated as the account balance plus or minus any floating profit/loss on open positions.

The completion of a buy or sell order. Execution quality is measured by speed, price accuracy, and slippage.

A marketplace where securities, commodities, derivatives, or cryptocurrencies are traded. Examples: NYSE, Binance, CME.

The global decentralized market for trading currencies. The largest financial market in the world with over $6 trillion daily volume.

A technical analysis tool using horizontal lines at key Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%) to identify potential support/resistance levels.

Analysis of economic, financial, and qualitative factors to determine an asset's intrinsic value. Includes GDP, interest rates, earnings.

Fear Of Missing Out. The anxiety that others are profiting from an opportunity you're not participating in, often leading to impulsive trading decisions.

A price area on a chart where no trading occurred, appearing as a break between bars. Often occurs between market close and open.

Buying an asset with the expectation that its price will rise. A long position profits when prices increase.

Selling an asset you don't own with the expectation that its price will fall. You profit when prices decrease.

The fee paid to execute transactions on the Ethereum network. Gas prices vary based on network congestion.

A risk management strategy using offsetting positions to reduce potential losses from adverse price movements.

Crypto slang for "Hold On for Dear Life." A strategy of holding cryptocurrency long-term regardless of price volatility.

A cryptocurrency wallet connected to the internet, allowing quick access but with higher security risks than cold storage.

A mathematical calculation based on price, volume, or open interest used to forecast future price movements. Examples: RSI, MACD, Moving Averages.

The rate at which the general level of prices for goods and services rises, eroding purchasing power. A key economic indicator affecting currency values.

The process by which a private company offers shares to the public for the first time, becoming a publicly traded company on a stock exchange.

The cost of borrowing money, expressed as a percentage. Central bank interest rates significantly impact currency values and market sentiment.

A charting technique developed in Japan showing open, high, low, and close prices. The body represents the open-close range; wicks show the high-low range.

A high-yield bond with a credit rating below investment grade (BB or lower). Offers higher returns but carries greater risk of default.

A regulatory process requiring brokers and exchanges to verify the identity of their clients. Involves submitting ID documents and proof of address.

A volatility-based technical indicator consisting of three lines: an EMA and upper/lower bands based on Average True Range (ATR).

Using borrowed capital to increase potential returns. A 100:1 leverage means controlling $100,000 with $1,000. Magnifies both profits and losses.

The ability to buy or sell an asset quickly without causing a significant price change. High liquidity = tight spreads and easy execution.

An order to buy or sell at a specific price or better. Buy limits are placed below current price; sell limits above.

A standardized unit of trading. Standard lot = 100,000 units, mini lot = 10,000, micro lot = 1,000, nano lot = 100.

The amount of money required to open and maintain a leveraged position. Acts as collateral for the borrowed funds.

A broker's demand to deposit additional funds when account equity falls below the required maintenance margin level.

A firm or individual that quotes both buy and sell prices for a financial instrument, profiting from the spread while providing liquidity.

An order to buy or sell immediately at the best available current price. Guarantees execution but not price.

Moving Average Convergence Divergence. A momentum indicator showing the relationship between two moving averages of price.

An indicator that smooths price data by calculating the average price over a specific period. Types include SMA (Simple) and EMA (Exponential).

A unique digital asset stored on a blockchain that represents ownership of items like art, music, or collectibles.

A list of buy and sell orders for a specific asset organized by price level, showing market depth and liquidity.

A condition where an asset's price has risen too quickly and may be due for a pullback. Often indicated by RSI above 70.

A condition where an asset's price has fallen too quickly and may be due for a bounce. Often indicated by RSI below 30.

Percentage In Point. The smallest price move in forex, typically 0.0001 for most pairs. For EUR/USD, 1 pip = $10 per standard lot.

An active trade in the market. A long position profits from price increases; a short position profits from price decreases.

A trading method that analyzes raw price movements without indicators, focusing on candlestick patterns and support/resistance.

A market manipulation scheme where promoters artificially inflate an asset's price through false claims, then sell their holdings.

A collection of financial investments held by an individual or institution, including stocks, bonds, currencies, commodities, and other assets.

A temporary reversal in the direction of an asset's price that goes against the prevailing trend. Often seen as a buying opportunity in uptrends.

The second currency in a currency pair. In EUR/USD, USD is the quote currency. It shows how much of it is needed to buy one unit of the base currency.

A monetary policy where central banks purchase securities to inject money into the economy, lower interest rates, and stimulate economic activity.

Using mathematical and statistical models to analyze financial markets and make trading decisions. Often involves algorithmic trading strategies.

A price level where selling pressure is strong enough to prevent further price increases. Often a previous high or round number.

A momentum oscillator measuring the speed and change of price movements on a scale of 0-100. Above 70 = overbought, below 30 = oversold.

The ratio comparing potential loss to potential profit on a trade. A 1:3 ratio means risking $1 to potentially make $3.

Interest paid or earned for holding positions overnight. Based on the interest rate differential between the two currencies.

The difference between bid and ask prices. A key component of trading costs. Tighter spreads indicate higher liquidity.

An order that automatically closes a position at a specified price to limit losses. Essential for risk management.

A price level where buying pressure is strong enough to prevent further price decreases. Often a previous low or round number.

A trading strategy focused on profiting from small price changes, often holding positions for just minutes or seconds.

The difference between the expected price of a trade and the actual execution price. Common during high volatility or low liquidity.

A broker model that routes client orders directly to liquidity providers without dealing desk intervention.

A trading style that holds positions for days to weeks, aiming to profit from price "swings" within a trend.

Self-executing code stored on a blockchain that automatically enforces the terms of an agreement when conditions are met.

An order that automatically closes a position at a specified profit level. Used to lock in gains without constant monitoring.

Analysis of price charts and indicators to forecast future price movements based on historical patterns.

The general direction of price movement. Uptrend = higher highs and higher lows. Downtrend = lower highs and lower lows.

A comprehensive document outlining entry/exit rules, risk management, and strategies. Essential for disciplined trading.

A stop-loss order that moves with the price, locking in profits as the trade moves in your favor while protecting against reversals.

The period represented by each candlestick or bar on a chart. Common timeframes: M1, M5, M15, H1, H4, D1, W1, MN.

The financial instrument on which a derivative (like a CFD or option) is based. For a gold CFD, gold is the underlying asset.

The profit or loss on open positions that hasn't been locked in yet. Also called "floating" or "paper" profit/loss.

A market condition characterized by consecutively higher highs and higher lows. Indicates bullish sentiment and buying pressure.

A stablecoin pegged to the US dollar (1 USDT ≈ $1). Widely used in crypto trading as a stable store of value and trading pair.

A measure of how much price fluctuates over time. Higher volatility = larger price swings and potentially greater risk/reward.

The number of shares or contracts traded during a specific period. High volume often confirms price movements.

An individual or entity that holds a large amount of cryptocurrency, capable of influencing market prices with their trades.

A volatile market condition where price moves sharply in one direction, then quickly reverses. Often triggers stop losses on both sides.

The ISO 4217 currency code for gold. XAU/USD represents the price of one troy ounce of gold in US dollars. A popular safe-haven asset.

The ISO 4217 currency code for silver. XAG/USD represents the price of one troy ounce of silver in US dollars.

The date on which a stock begins trading without the value of its next dividend. Buy before this date to receive the dividend.

The income return on an investment, usually expressed as a percentage. Includes dividends, interest, or other distributions.

A DeFi strategy of moving crypto between protocols to maximize returns through interest, fees, and token rewards.

A graph showing interest rates across different bond maturities. An inverted yield curve often signals an upcoming recession.

A situation where one participant's gain equals another's loss. Forex and futures trading are often considered zero-sum markets.

A price area (rather than exact level) where support or resistance is expected. More realistic than pinpoint levels for trading decisions.