TradingGlossary
A
AML/CFT
Anti-Money Laundering & Combating the Financing of Terrorism and illegal Organisations.
Ask Price
It refers to the price at which a seller is willing to sell a particular financial instrument, such as a stock, bond, commodity, or currency pair in the trading market.
Assets
Assets are items of value that can be owned or traded, including financial instruments (e.g., stocks, bonds) and tangible assets (e.g., real estate).
B
Balance Sheet
A financial statement that presents a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time.
Base Currency
It refers to the first currency listed in a currency pair.
Bear or Bearish
The term "bear" or "bearish" refers to a downward trend or a pessimistic outlook on the price or market conditions of a particular asset, such as stocks, commodities, or currencies. It signifies a belief or expectation that prices will decline or the market will experience a prolonged negative sentiment.
Bid Price
Bid price is the highest price that a buyer is willing to pay for a financial instrument.
Breakouts
It refers to a price movement where the price of an asset breaks through a significant level of support or resistance.
Broker
A juristic person authorized pursuant to the provisions of this Law to conduct brokerage business in the Market.
Bull or Bullish
The term "bull" or "bullish" refers to a positive outlook toward the market conditions of a particular asset, such as stocks, commodities, or currencies. It signifies a belief or expectation that prices will rise or that the market will experience a sustained period.
Buy
It refers to the act of acquiring a financial instrument, such as stocks, bonds, commodities, or currencies, with an intent of owning and profiting from its potential price appreciation.
Buy Limit
It refers to an order placed by a trader below the current market price to enter a long position when the price of a currency pair reaches or falls to a specified trigger price.
Buy Stop
It refers to an order placed by a trader above the current market price to enter a long position when the price of a currency pair reaches or exceeds a specified trigger price, typically used in breakout strategies.
C
Candlestick Chart
It refers to a popular charting tool used in forex trading to visualize price movements over a specific period and gives valuable information about the opening, closing, high, and low prices for each trading session or time frame.
Commodity Currency
It refers to an influential currency value in terms of performance and prices of commodities. These currencies are often associated with countries that are among the major producers or exporters of natural resources, such as energy products (oil, gas), metals (gold, silver), minerals, and more.
Contract For Difference (CFDs)
"Contract for Difference" or "CFD" is a popular derivative financial instrument used in trading as it allows traders to trade on the price movements of various financial instruments.
Counter Currency
It refers to the second currency listed in a currency pair.
D
Day Order
It refers to an instruction given by a trader to a brokerage or trading platform to execute a trade within a specific trading session on the same day of order placement.
Day Trading
A trading strategy involving buying and selling financial instruments within the same trading day to capitalize on intraday price movements.
Decentralized
It refers to a trading environment or system operating without a central authority or intermediary. In decentralized trading, participants can engage in direct peer-to-peer transactions through an online platform without relying on a centralized exchange, clearinghouse, or broker.
Demo Account
A demo account, also known as a practice account, is a simulated trading account offered by Forex brokers to allow traders to practice trading without risking real money.
Derivative
Derivatives include futures and options contracts on securities, indices, interest or other rates, currency, futures or commodities.
Dividend
Regular payments made by a corporation to its shareholders, usually in the form of cash or additional shares, representing a portion of the company's earnings.
DMA (Direct Market Access)
It refers to a trading mechanism that allows traders to interact directly with FX and CFD order book without intermediaries like brokers to execute trades.
Downtrend
It refers to a prolonged and consistent decline in the price of an asset or a market over a period of time.
Drawdown
It refers to the peak-to-trough decline in the value of an investment or trading account during a specific period.
E
Entry Point
It refers to the specific price level or condition at which a trader initiates a trade or enters a position in a particular financial instrument. It is the moment when a trader decides to execute a buy or sell order based on their analysis and trading strategy.
Equity
The net value of your trading account, calculated as the balance plus or minus unrealized profits and losses from open positions.
ETF (Exchange-Traded Funds)
ETFs are investment vehicles that are traded on stock exchanges, similar to individual stocks. ETFs offer diversification and liquidity but may involve tracking errors or management fees.
Execution
It refers to the process of finalization of an order by executing a buy or sell order for a financial instrument, such as stocks, currencies, commodities, or derivatives.
Exit Point
It refers to the price or condition at which a trader decides to close a position and exit a trade. It is the point where a trader locks in their profits or cuts their losses.
Exotic Currency Pair
Exotic currency pairs are currency pairs that include one major currency (such as USD, EUR, or GBP) and one currency from an emerging or less commonly traded economy (such as TRY, ZAR, or MXN).
F
Filled
It refers to the execution of a trade order (buy or sell) at a specific price.
Financial Markets
It refers to platforms or systems where various financial instruments are bought and sold, allowing participants to trade and invest in assets such as stocks, bonds, currencies, commodities, derivatives, and more.
Forex
Forex (FX) also known as the foreign exchange market or currency market, is a decentralized global market where participants buy, sell, and exchange currencies. It is the largest and most liquid financial market in the world, with an average daily trading volume exceeding trillions of dollars.
Fundamental Analysis
Fundamental analysis is a method used to examine various factors that can affect the asset's value, such as the company's financial health, politics, industry trends, economic conditions, market sentiment, etc. The aim is to determine whether an asset is overvalued or undervalued to make investment decisions.
G
Gearing
A term often used interchangeably with leverage, particularly in the UK and Australia, referring to the ratio of borrowed funds to the trader's own capital.
H
Hedging
It refers to a risk management strategy where traders take positions in different assets or markets to minimize potential losses in their primary positions.
I
Indices
Index (plural: indices) refers to a statistical measure that represents the performance of a specific group of securities, such as stocks or bonds.
Inflation
It refers to the sustained increase in the general price level of goods and services in an economy over time.
Interest
It means a right to a return or benefit produced by the scheme whether the right is actual, prospective or contingent and whether it is enforceable or not.
Interest Rates
It refers to the rate at which a lender is prepared to charge for the use of financial services.
Investor
Any person who makes a practice of selling and buying Securities in his name and for his account, and has been given a number by the Market directly or through a Broker.
IPO (Initial Public Offering)
The first sale of a company's shares to the public, through a stock exchange or an over-the-counter market, allowing the company to raise capital, diversify its ownership, and increase its visibility and credibility.
K
KYC (Know Your Customer)
The process of verifying the identity of a customer and assessing their risk profile, as part of a financial institution's compliance with anti-money laundering (AML) regulations.
L
Leverage
It refers to the use of borrowed capital or margin to increase the potential return on investment. It can amplify both profits and losses and is a common feature in various financial markets.
Liquidity
It refers to the ease and efficiency with which a financial instrument can be bought or sold in the market without impacting the market price.
Lot Size
It refers to the volume or quantity of a trade. It determines the size of the position a trader takes in the market. Lot sizes are standardized and typically come in three types: standard, mini, and micro. Lot size influences risk, profit, and margin requirements in forex trading.
M
Margin Call
It is a notification triggered by the broker or the trading platform when a trader's account falls below the required margin, requesting the trader to deposit additional funds into their trading account to meet the margin requirements.
Margin Deposit
It refers to the initial capital that a trader must deposit into their trading account when engaging in margin trading and maintaining leveraged positions in the market.
Margin Ratio
Also known as the leverage ratio or margin requirement and refers to the amount of margin or collateral required to open and maintain a position in a financial instrument, such as stocks, forex, or futures.
Market Capitalization
Also known as market cap and refers to the context of stock markets to measure the size and value of a publicly traded company.
Market Depth
It describes the display of all buy and sell orders of a particular financial instrument at various price levels.
Market Maker
It is a participant in the financial markets, such as stocks, bonds, options, or foreign exchange, who provides liquidity by being willing to buy or sell a particular security or financial instrument at quoted bid and ask prices.
Minor Currency Pair
Also known as a cross-currency pair or a secondary currency pair, it refers to a currency pair that does not involve the U.S. dollar (USD) as one of its components and consists of two major currencies other than the USD.
Moving Averages
It refers to a technical analysis tool that helps traders identify trends, smooth out price fluctuations, and generate trading signals based on the average price over a specified period.
MUR
Mauritian Rupee.
N
Naked Position
A trade that is unhedged or exposed, meaning it is not offset by another position or derivative to reduce risk.
O
Offering Person
Any person communicating an issuing or Offering.
One-Click Trade
Refers to a feature offered by trading platforms that allow traders to execute trades quickly and efficiently with a single click to streamline the trading process and eliminate the need for manual confirmation steps.
Options Contract
It means a contract that gives its holder the right but not the obligation to buy or sell a fixed number of securities or other instrument at a fixed price on or before a given date.
Order
A directive given to a broker or trading platform to execute a trade under specified conditions.
Over The Counter (OTC)
It refers to a decentralized market where trading of financial instruments, such as stocks, bonds, derivatives, and currencies, takes place directly between parties without the involvement of a centralized exchange.
Overbought
A technical analysis term indicating that an asset may be trading above its intrinsic value, often identified using indicators like RSI.
P
Pending Order
It refers to an instruction given by a trader to a broker or trading platform to execute a trade at a specific price or conditions in the future, rather than immediately at the current market price. It allows traders to set predefined entry or exit points for a trade, even if they are not actively monitoring the market at that moment.
PIP
It refers to the smallest increment by which a currency pair moves in trading.
Position Trading
Position trading is a long-term trading strategy where traders hold positions in financial instruments, such as stocks, bonds, commodities, or currencies, for an extended period of time to capture major price moves and trends.
Q
Quote Currency
Also known as "Counter Currency", it refers to the second currency listed in a currency pair. It is used to determine the price of the base currency and represents the amount of quote currency needed to purchase one unit of the base currency.
R
Range Trading
It refers to a trading strategy that involves identifying and taking advantage of price movements within a defined range or price range-bound market with an aim to buy at the lower end of the range (support) and sell at the upper end (resistance).
Resistance Level
It refers to a specific price level or zone at which an asset's price has historically had difficulty surpassing, acting as a barrier or ceiling that prevents the price from rising further.
Risk Management
It refers to implementing strategies and techniques to effectively manage and mitigate potential losses with an aim to protect the trading capital and preserve long-term profitability.
S
Scalper
It refers to a type of trader who engages in a short-term trading strategy focused on making quick profits from small price movements in the market.
Securities Exchange
It means a market, exchange, place or facility, including an organised over-the-counter market, that provides for bringing together, on a regular basis, buyers and sellers of securities to negotiate or conclude purchases or sales of securities in accordance with the rules of securities exchange.
Sell Limit
A sell limit order is an instruction given by a trader to a broker or trading platform to sell an asset at a specific price or better. It is executed only if the market price reaches or exceeds the specified limit price.
Sell Stop
A sell-stop order is a type of pending order placed by a trader with a broker or trading platform to sell an asset at a specific price or lower. The order is triggered and becomes a market order when the market price reaches or falls below the specified stop price.
Slippage
It refers to the difference between the expected price of a trade and the actual executed price.
Spread
It refers to the difference between the bid price (the price at which buyers are willing to purchase an asset) and the ask price (the price at which sellers are willing to sell an asset).
Stop Order
It refers to an order type that is placed to limit potential losses or protect profits on an existing position.
Stop-Loss
Stop loss is a risk management tool in the trading platform used to limit potential losses on a trade.
Strike Price
It is the fixed price at which the holder of an options contract can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset, as specified in the contract, upon exercise.
Support Level
It refers to a specific price level or zone at which an asset's price has historically had difficulty falling below, acting as a floor or barrier that prevents the price from declining further.
Swaps
Also known as a rollover or overnight interest refers to the interest that you either earn or pay for a trade that you keep open overnight.
Swing Trading
It refers to a trading strategy that aims to capture shorter-term price movements within the context of a larger trend.
T
Take Profit
It refers to an order placed by a trader to automatically close a position or sell a financial asset when it reaches a certain predetermined level of profits. It is a mechanism that locks in gains and ensures that a profitable trade does not reverse and result in losses.
Technical Analysis
It refers to a method of analyzing price charts, historical market data, and various indicators to make predictions about future price movements.
Trade Trigger
It refers to a specific condition or event that prompts a trader to initiate a trade. It acts as a signal or confirmation that a trading opportunity aligns with the trader's strategy or analysis.
Trade Volume
It refers to the total quantity of currency pairs or contracts traded within a given period.
Trading Capital
It refers to the amount of money a trader has available to invest in the forex market.
Trading Plan
It refers to a set of guidelines that outlines a trader's approach to the trading market, helping the trader to maintain discipline, consistency, and objectivity in their trading activities.
Trading Platform
It refers to a software application that enables traders to access the forex market and execute trades.
U
Up Trend
It refers to a sustained upward movement in the price of a financial asset, such as a stock, index, or commodity.
V
Virtual Trading
It refers to the practice of executing real-time trades in the forex market without using real money.
Volatility
It refers to the degree of price fluctuation or variability of an asset or market over a specific period indicating the level of uncertainty or risk in the market.
W
Wash Sale
A transaction in which an investor sells a security at a loss and repurchases the same or substantially identical security within a short period. Regulated or disallowed in many jurisdictions for tax avoidance purposes.
