Common Trading Terminology

Below are a few terms commonly used within Trading to help newer traders understand, essentially what more experienced traders are discussing!

 

 

Algorithm: Computer program following a specific set of instructions to place a trade.

Ask (Offer): The price a seller is willing to accept.

Bear: Someone who anticipates the market falling. (Opposite of a bull).

Bid: The a price a buyer is willing to accept.

Bull: Someone who anticipates the market rising. (Opposite of a bear).

Equity: Your trading account funds, or stock of a company.

Forex: The Foreign Exchange (FX) market – e.g. GBPUSD, EURUSD etc

Fundamental Analysis: Assessing a financial products intrinsic value based upon financial news, such as economic factors, company performance, industry performance, etc.

Scratch: Closing a trade out near break-even

Spread: The difference between the bid and ask price of a particular instrument

Technical Analysis: Assessing historical price data to assist you in predicting future trends.