Algorithmic Trading (Algo Trading) – The use of computer algorithms to execute trades at high speeds based on predefined criteria.
Arbitrage – The practice of profiting from price differences of the same asset in different markets.
API (Application Programming Interface) – A set of programming tools that allow traders to connect third-party applications to a trading platform.
Asset Management – The management of financial assets on behalf of clients or investors.
Ask Price – The price at which a seller is willing to sell an asset.
Average True Range (ATR) – A technical indicator measuring market volatility
Backtesting – Testing a trading strategy using historical market data to evaluate its effectiveness.
Base Currency – The first currency in a currency pair (e.g., in EUR/USD, EUR is the base currency).
Benchmark Index – A standard index used to measure the performance of a trading portfolio (e.g., S&P 500, NASDAQ).
Book Value – The value of a company’s assets minus liabilities, often used to assess stock valuation.
Bear Market – A market condition where prices are declining.
Bid Price – The price at which a buyer is willing to purchase an asset.
Bid-Ask Spread – The difference between the bid price and the ask price.
Breakout – When the price of an asset moves beyond a defined support or resistance level.
Broker – An individual or firm that facilitates buying and selling assets for traders.
Charting Software – A tool that provides graphical representations of market data for analysis.
Candlestick Chart – A type of financial chart used to track price movements.
Circuit Breaker – A mechanism that temporarily halts trading to prevent extreme volatility.
Commodity – A raw material or primary agricultural product that can be bought and sold.
Covered Call – An options strategy where an investor sells call options on an asset they own.
Currency Pair – A pair of currencies used in forex trading (e.g., EUR/USD).
Clearinghouse – A financial institution that facilitates the settlement of trades between buyers and sellers.
Cloud-Based Trading – Trading platforms that operate on cloud servers, allowing access from multiple devices.
Contract Size – The standardized amount of an asset that is traded in futures and options markets.
Dark Pool Trading – Private stock exchanges where institutional investors trade large quantities of shares without public disclosure.
Data Feed – A stream of real-time market data provided to trading platforms.
Decentralized Exchange (DEX) – A platform that enables peer-to-peer cryptocurrency trading without intermediaries.
Discretionary Trading – A trading approach where decisions are made manually rather than algorithmically.
Day Trading – The practice of buying and selling financial instruments within the same trading day.
Derivative – A financial instrument whose value is derived from an underlying asset.
Dividend – A portion of a company’s earnings paid to shareholders.
Drawdown – A measure of peak-to-trough decline in capital during a trading period.
ECN (Electronic Communication Network) – A digital system that connects buyers and sellers in the forex and stock markets.
ETF (Exchange-Traded Fund) – A type of investment fund that holds a basket of assets and trades like a stock.
Execution Speed – The time taken for a trading order to be completed.
Earnings Report – A company’s quarterly or annual financial performance summary.
Entry Point – The price level at which a trader initiates a trade.
Equity – The value of an investor’s ownership in an asset or company.
Ex-Dividend Date – The date after which new buyers of a stock are not eligible for dividends.
Fiat Currency – Government-issued money that is not backed by a physical commodity (e.g., USD, EUR).
Fill Price – The price at which an order is executed.
Fixed Spread – A spread that remains constant regardless of market conditions.
Fibonacci Retracement – A technical analysis tool used to identify potential support and resistance levels.
Fill or Kill (FOK) Order – An order that must be executed immediately or canceled.
Flash Crash – A rapid and deep market decline followed by a quick recovery.
Forex (FX) – The global marketplace for trading currencies.
Fundamental Analysis – The evaluation of financial and economic factors affecting asset prices.
Gross Profit Margin – A financial metric that shows a company’s profitability before expenses.
GTC Order (Good-Till-Cancelled) – A buy or sell order that remains active until it is executed or manually canceled.
Guaranteed Stop-Loss – A stop-loss order that ensures a trade is closed at the specified price, even during volatile market conditions.
Gap Trading – A strategy that takes advantage of price gaps between trading sessions.
Gamma – A measure of how an option’s delta changes in response to price movements.
Golden Cross – A bullish signal where a short-term moving average crosses above a long-term moving average.
Hard Fork – A blockchain update that creates a permanent divergence from the previous version.
Hotkey Trading – Using keyboard shortcuts to execute trades quickly.
Hedging – A strategy used to reduce risk by taking an offsetting position in a related security.
High-Frequency Trading (HFT) – A type of algorithmic trading that executes a large number of orders at high speeds.
Holding Period – The length of time an asset is held before selling.
Indicative Price – The estimated price of a security before the market opens.
Index Fund – A mutual fund or ETF designed to replicate the performance of a specific market index.
Interbank Market – A global network of banks trading currencies with each other.
Implied Volatility – The expected future volatility of an asset’s price.
Insider Trading – Buying or selling securities based on non-public, material information.
Interest Rate Differential (IRD) – The difference in interest rates between two currencies in forex trading.
Joint Venture – A business arrangement where two or more parties collaborate on a specific project.
Keltner Channel – A volatility-based technical indicator.
KYC (Know Your Customer) – Regulations requiring financial institutions to verify customers’ identities.
Latency – The delay between trade execution and order placement, often a concern for high-frequency traders.
Leverage Ratio – The ratio of borrowed funds to a trader’s capital.
Liquidity Provider – An entity that supplies buy and sell orders to ensure smooth market functioning.
Limit Order – An order to buy or sell at a specific price or better.
Liquidity Risk – The risk of an asset not being easily tradable without impacting its price.
Long Position – A trade that profits when the asset’s price rises.
Margin Call – A broker’s demand for additional funds when a trader’s account falls below the required margin level.
Market Depth – The volume of buy and sell orders at different price levels for a security.
Market Maker – A firm or individual that provides liquidity by quoting both buy and sell prices for a security.
Market Order – An order to buy or sell at the best available price.
Momentum Trading – A strategy that seeks to capitalize on the continuance of existing trends.
Moving Average (MA) – A technical analysis tool that smooths price data over a specific period.
Negative Balance Protection – A feature that prevents traders from losing more money than they have in their accounts.
Non-Farm Payrolls (NFP) – A key economic indicator measuring employment changes in the U.S.
NAV (Net Asset Value) – The total value of an entity’s assets minus liabilities.
No-Dealing Desk (NDD) – A forex trading environment where orders are executed directly without broker intervention.
On-Balance Volume (OBV) – A technical indicator that uses volume flow to predict price changes.
One-Cancels-the-Other (OCO) Order – A pair of linked orders where executing one cancels the other.
Over-the-Counter (OTC) Trading – Trading conducted directly between two parties without a centralized exchange.
Option Contract – A derivative that grants the right, but not the obligation, to buy or sell an asset at a predetermined price.
Oscillator – A technical indicator that fluctuates within a range to identify overbought or oversold conditions.
Paper Trading – Simulated trading that allows users to test strategies without using real money.
Position Sizing – Determining the number of units to buy or sell based on risk management principles.
Price Action Trading – A strategy that relies on historical price movements rather than indicators.
Pattern Trading – A strategy based on recurring price movements.
Pip (Percentage in Point) – The smallest price movement in forex trading, usually the fourth decimal place.
Portfolio Diversification – The practice of spreading investments across multiple assets to reduce risk.
Price-to-Earnings (P/E) Ratio – A valuation metric comparing a company’s share price to its earnings per share.
Quote Currency – The second currency in a currency pair (e.g., in EUR/USD, USD is the quote currency).
Quantitative Trading – A trading strategy based on mathematical and statistical models.
Quick Ratio – A liquidity measure evaluating a company’s ability to meet short-term obligations.
Risk-Reward Ratio – A calculation comparing potential profit to potential loss.
Rollover – The process of extending a forex position to the next trading day.
Relative Strength Index (RSI) – A momentum indicator measuring the magnitude of price changes.
Resistance Level – A price level at which an asset struggles to move above.
Retracement – A temporary reversal in the direction of an asset’s price trend.
Sentiment Analysis – Using news, social media, and market psychology to predict asset movements.
Slippage – The difference between the expected price of a trade and the actual execution price.
Smart Order Routing – Automated selection of the best market for order execution.
Short Selling – A strategy where traders borrow an asset to sell, aiming to repurchase at a lower price.
Spread Betting – A form of speculative trading on price movements without owning the underlying asset.
Support Level – A price level where an asset tends to find buying interest.
Swing Trading – A strategy that captures short- to medium-term price moves.
Take Profit (TP) Order – A preset order to automatically close a position at a specific profit level.
Technical Indicators – Mathematical calculations used to analyze price trends and market conditions.
Trailing Stop – A stop-loss order that adjusts dynamically as the price moves in favor of the trade.
Tick Size – The minimum price movement of a security.
Time & Sales – A real-time record of executed trades showing volume and price.
Trading Halt – A temporary suspension of trading for a security or market.
Trend Line – A line drawn on a chart to indicate price direction.
Unrealized Gain/Loss – The profit or loss on an open position that hasn’t been closed.
Uptrend – A market condition where prices are consistently rising.
VWAP (Volume Weighted Average Price) – A trading benchmark that shows the average price a security has traded at over a specific period, weighted by volume.
Volatility Index (VIX) – A measure of market volatility, often called the “Fear Index.”
Vega – A measure of an option’s sensitivity to changes in implied volatility.
Volume – The number of shares or contracts traded in a given period
Wallet (Crypto Wallet) – A digital tool used to store and manage cryptocurrencies.
Wash Trading – A prohibited practice where a trader buys and sells the same security to create misleading market activity.
Whale (Crypto) – A trader or investor holding a large amount of cryptocurrency that can influence the market.
