Trading Glossary
Every essential term, concept, and piece of jargon explained with honest, UK-focused clarity.
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Bull Market
A market condition where prices are rising or expected to rise....
Define TermBear Market
A market condition where prices are falling or expected to fall....
Define TermBollinger Bands
A technical analysis tool defined by a set of trendlines plotted two standard de...
Define TermBid Price
The price a buyer is willing to pay for a security....
Define TermBreakout
When the price of an asset moves above a resistance level or below a support lev...
Define TermC
Candlestick Chart
A style of financial chart used to describe price movements of a security, deriv...
Define TermCentral Bank
A national bank that provides financial and banking services for its country's g...
Define TermCFD (Contract for Difference)
An agreement to exchange the difference in the value of an asset from the time t...
Define TermCommodities
Raw materials or primary agricultural products that can be bought and sold, such...
Define TermCorrelation
A statistical measure of how two securities move in relation to each other....
Define TermD
Drawdown
The peak-to-trough decline during a specific period for an investment or trading...
Define TermDoij
A candlestick pattern that forms when a security's open and close are virtually ...
Define TermDay Trading
The practice of buying and selling financial instruments within the same trading...
Define TermDivergence
When the price of an asset moves in the opposite direction of a technical indica...
Define TermDividend
A distribution of a portion of a company's earnings to its shareholders....
Define TermE
Engulfing Pattern
A reversal pattern that can be bearish or bullish depending on whether it appear...
Define TermEconomic Calendar
A schedule of upcoming economic news releases and events....
Define TermEquity
The total value of a trading account, including unrealized profits and losses....
Define TermExchange Rate
The value of one currency for the purpose of conversion to another....
Define TermExecution
The completion of a buy or sell order in the market....
Define TermExotic Pairs
Currency pairs that consist of one major currency and one from a developing or e...
Define TermF
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L
Lot Size
The standardized quantity of a financial instrument used in trading....
Define TermLeverage
The use of borrowed capital to increase the potential return (and risk) of an in...
Define TermLong Position
Buying an asset with the expectation that its value will increase....
Define TermLiquidity
The ease with which an asset can be bought or sold without affecting its price....
Define TermLot
The standard unit for measuring the size of a trade....
Define TermM
Margin
The amount of money required in your account to open and maintain a leveraged po...
Define TermMoving Average (MA)
A technical indicator that smooths out price action by filtering out the "noise"...
Define TermMACD
Moving Average Convergence Divergence; a trend-following momentum indicator....
Define TermMajor Pairs
The most heavily traded currency pairs in the world, all of which contain the US...
Define TermMomentum
The speed or velocity of price changes in a security or market....
Define TermN
O
Oscillator
A technical analysis tool that constructs high and low bands between two extreme...
Define TermOverbought
A situation in which the price of an asset has risen to such a degree that it is...
Define TermOversold
A situation in which the price of an asset has fallen to such a degree that it i...
Define TermP
Pip
A "pip" (percentage in point) is the smallest price move that a given exchange r...
Define TermPattern
A distinctive formation created by the movement of security prices on a chart....
Define TermPipette
A fractional pip, equal to one-tenth of a pip....
Define TermPivot Point
A technical analysis indicator used to determine the overall trend of the market...
Define TermPosition
The amount of a security, commodity, or currency that is owned (long) or borrowe...
Define TermPrice Action
The movement of a security's price plotted over time....
Define TermPullback
A temporary fall in the price of an asset from its recent peak....
Define TermQ
R
Resistance
A price level where a rising market finds selling pressure and struggles to brea...
Define TermRSI (Relative Strength Index)
A momentum oscillator that measures the speed and change of price movements....
Define TermRally
A period of sustained increase in the prices of stocks, bonds, or indexes....
Define TermRange
The difference between the high and low prices of an asset during a given period...
Define TermRisk-to-Reward Ratio (R:R)
A measure used by traders to compare the potential profit of a trade to its pote...
Define TermS
Spread
The spread is the difference between the buy (bid) price and the sell (ask) pric...
Define TermShort Position
Selling an asset (or a contract) with the expectation that its value will decrea...
Define TermStop Loss
An order placed with a broker to sell (or buy) an asset when it reaches a certai...
Define TermSlippage
The difference between the expected price of a trade and the price at which the ...
Define TermSupport
A price level where a falling market finds buying interest and struggles to brea...
Define TermScalping
A trading style specializing in profiting from small price changes and making a ...
Define TermSentiment
The overall attitude of investors toward a particular security or financial mark...
Define TermSovereign Debt
Debt issued by a national government in a foreign currency, in order to finance ...
Define TermSpread Betting
A tax-efficient way of speculating on the price movement of various types of fin...
Define TermStochastic Oscillator
A momentum indicator comparing a particular closing price of a security to a ran...
Define TermSupply and Demand
The primary drivers of price in any free market....
Define TermSwing Trading
A style of trading that attempts to capture gains in a stock (or any financial i...
Define TermT
Take Profit
An order placed to close a profitable trade once it reaches a specific price tar...
Define TermTechnical Analysis
The study of past price action and volume to predict future price movements....
Define TermTape Reading
A technique used by stock traders to analyze the price and volume of a given sto...
Define TermTechnical Indicator
A heuristic or pattern-based signal produced by the price, volume, and/or open i...
Define TermTick
The smallest possible change in price for a financial instrument....
Define TermTrailing Stop
A type of stop loss order that moves automatically as the price of an asset move...
Define TermTrend
The general direction in which a market or the price of an asset is moving....
Define Term