Trader's Dictionary

A trader's dictionary is the set of terms that a novice trader needs to learn in order to navigate what more experienced traders will say or write. And so here is a list of terms that you need to know, but it will be supplemented by more complex ones.

Ask is the price at which you can buy a product on the exchange. Or is it the price at which they are willing to sell the goods to us.

Up-Trand - A long-term rise in price, or an uptrend, in which each new minimum is higher than the previous one.

Arbitrage (Arbirage) - Trading without risks. The bottom line is to open two opposite orders for one instrument or two similar ones. Not recommended by beginners

A Bay is simply the purchase of a currency pair.

Balance - The money in the account without taking into account the open position

Bid (Bid) - the selling price at which the trader can close the deal. That is, to sell the currency. The price at which the market (its participants) is ready to redeem this or that financial instrument.

Broker (Broker) - a company that provides access to the financial market and the execution of transactions. (I recommend Alpari)

Bull - Bulls are a trader who buys a particular currency.

Currency pair - pairs of currencies (cryptocurrencies) that are traded on the market

Foreign Exchange Market (cryptocurrency market) - the totality of all operations with the Currency carried out by market participants.

Down-trend - (Down-trand) - this is a price decline, at which each next extreme is lower than the previous one.

Low (LOW) - the lowest price point for a specified time.

Margin is the funds that the broker blocks, so that you do not lose more money than you have. The margin appears when you open a trade.

Bear (Bear) - a trader who sells some kind of currency. A market participant holding a “down” financial instrument.

Spread - the difference between the buy and sell prices.

Trader (Trader) is you, a participant in exchange trading, who participates in the purchase or sale of a currency.

Trend is a continuous direction of price movement, up or down.

Resistance level - a price level where the rise in price stops many times, due to the fact that the activity of sellers is greater than buyers, and by turnover.

Hi - the highest price extremum for a certain period.

Account Statement - account statement. Contains information about the transactions performed and the state of the client's account with the broker for the selected period.

Appreciation - the increase in the value of a unit of one currency, expressed in units of another currency.

Arbitrage - arbitration. A non-risky type of trading, when the same currency is simultaneously bought and sold against another to make a profit due to the difference in prices between two counterparties.

Ask (Offer) Price - the seller's price. The price at which the client can buy the currency of interest (a large number in a two-sided quote).

Bar Chart - an image of a price chart in the form of a bar chart.

Bear Market is a bear market characterized by a decline in prices (quotes).

Bid Price - the buyer's price. The price at which the client can sell the currency of interest (the lower figure in the two-way quote).

Bond is a bond (government security).

Breakout - a sharp movement of the rate across a certain conditional border (previous top or bottom, consolidation level).

Bull Market is a bull market characterized by an increase in prices (quotes).

Chart - a chart. Graphical representation of price (rate) changes.

Consolidation is a consolidation. The figure of those analyzes, which characterizes the movement of the price (rate) in the direction without a certain increasing or decreasing trend.

Day Trading - trading operations performed within one day.

Divergence - divergence. The discrepancy between the direction of price movement in the market shown by the price chart and the direction of movement of a technical indicator.

Diversification - diversification. Trading in multiple markets (multiple instruments) to reduce price risks.

Double Bottom - "double bottom". The figure of those analyzes, when the rate fell twice to a certain level, and then rose again.

Double Top - "double top". The figure of those analyzes when the rate rose twice to a certain level and then dropped again.

Dow Jones Average is a Dow Jones index that characterizes the business activity of the US stock market.

Elliott Wave Analysis is a method of market analysis based on the Elliott wave theory (Ralph Nelson Elliott).

FalseBreakout - false breakout. A short-term movement of the rate across a certain conditional border (previous top or bottom, the level of consolidation), and then a return and movement in the opposite direction.

Fibonacci Sequence is a sequence of numbers obtained by the Italian mathematician Leonardo Fibonacci. These numbers are widely used in those analyzes to determine price levels (support and resistance) in the market.

Fundamental Analysis is fundamental analysis. Uses macroeconomic indicators of the economy to predict the market situation.

Futures Contract is a futures contract. A standardized forward contract that is bought / sold on an exchange.

Gap - gap. The price range, within which there were no quotes, forms a gap on the price chart.

Good-Till-Canceled (GTC) Order - an order to make a deal that is valid until canceled by the client or executed by the broker.

Hedging - hedging. A combination of short and long positions on different instruments, which reduces the currency risk.

Head and Shoulders - "head and shoulders". The figure of those analyzes, resembling the line of the shoulders, neck and head of a person.

Inverse Head and Shoulder - inverted head and shoulders.

Liquidity is liquidity. The market where you can always make a deal (during business hours) is liquid.

Long Position - long position (in relation to a certain currency). An open position in which the amount of purchased currency exceeds the amount of sold the same currency.

Loss - loss.

Margin Call - a broker's request to add additional security to the account.

Moving Average - moving (dynamic) average. An indicator used in those analyzes to determine the trend in the market.

Pyramiding - building a trading pyramid. Trading tactics, consisting in a gradual increase in the existing open position.

Position Limit - the maximum allowable size of an open position.

Profit Taking - closing a position with a profit.

Rally - a rapid rise in prices (quotes) in the market.

Range - price range. The highest and lowest price (rate) levels reached within a certain period of time.

Recession - recession, decline in business activity.

Resistance - resistance. The price level at which a significant number of sellers are expected to enter the market or where sell orders are concentrated.

Retracement - the level of possible return (correction) of the price (rate) after a rise or fall, calculated in that analysis.

Risk Control - using trading rules to limit losses.

Scalper is a trader who makes a profit from minor (minimal) price (rate) changes.

Short position - short position (in relation to a certain currency). An open position in which the amount of sold currency exceeds the amount of the purchased currency.

Slippage - slippage. A situation when a Stop order is executed at a worse rate than was ordered when it was placed with the broker. This phenomenon occurs during a rapidly changing market. For example, this can happen after the release of important fundamental data, during the speeches of well-known political figures. It is not possible to execute an order at a given rate if the quote surpasses the given level with a sharp jump. The amount of slippage can vary from one point to several tens of points. Slippage often occurs when trading opens on Sunday nights, when the opening rates differ from the closing rates.

Speculator is a person who is ready to risk funds when performing trading operations in order to make a profit.

Spread - the difference between the bid price (ask) and the bid price in a two-way quote.

Stop Order - an order to the broker to conclude a deal when the price reaches a specified level.

Support - support. The price level at which a significant number of buyers are expected to enter the market or where buy orders are concentrated.

Technical Analysis - technical analysis. Using the price chart and technical indicators to predict the market situation.

Technical Indicators - technical indicators. Mathematical formulas used to construct auxiliary charts to facilitate market analysis.

Volatility - volatility (volatility, volatility). This term characterizes the degree of volatility in the exchange rate over a certain period of time. For example, when there are sharp fluctuations in the market with a large amplitude, then they say that the volatility is high.

Uptick - upward price movement.

Yield - income in the form of interest on invested capital, calculated for a period of one year.