Trading Glossary & Terminology
Learn the trading lingo and vocabulary and you’ll unlock the door to a whole host of trading secrets. Below we have collated the essential basic jargon, to create an easy to understand day trading glossary.
• Leverage rate – This is the rate your broker will multiply your deposit by, giving you buying power.
• Automated trading – Automated trading systems are programs that will automatically enter and exit trades based on a pre-programmed set of rules and criteria. They are also known as algorithmic trading systems, trading robots, or just bots.
• Initial Public Offering (IPO) – This is when a company sells a fixed number of shares to the market to raise capital.
• Float – This is how many shares are available to trade. If a company releases 10,000 shares in the initial IPO, the float would be 10,000.
• Beta – This numeric value measures the fluctuation of a stock against changes in the market.
• Penny Stocks – These are any stocks trading below $5 a share.
• Profit/Loss ratio – Based on a percentage basis, this is the measure of a system’s ability to generate profit instead of loss.
• Entry points – This is the price at which you buy and enter your position.
• Exit points – This is the price at which you sell and exit your position.
• Bull/Bullish – If you take a bullish position day trading you expect the stock to go up.
• Bear/Bearish – If you take a bearish position you expect the stock to go down.
• Market trends – This is the general direction a security is heading over a given time frame.
• Hotkeys – These pre-programmed keys allow you to enter and exit trades rapidly, making them ideal if you need to exit a losing position as soon as possible.
|Financial Glossary – Word | Meaning|
|Backwardation||A market condition where The future price of a|
|commodity is Higher than the presentor “spot”|
|price. This is bullish for long term prices.|
|Beating retreat||Cutting out/ fall back|
|Beelined||Head straightway up|
|Cable||Cable is a foreign exchange term used for the|
|GBP/USD currency pair rate (British pound|
|priced in US dollars). The term cable is a slang|
|term used by forex traders to refer to the|
|exchange rate between the pound and dollar|
|and is also used to simply refer to the British|
|Chinwags||Chat/ informal conversation|
|Clipping its wing||Keeping within certain limits|
|Cyclical Stocks||Cyclical stocks are affected by macroeconomic|
|changes, where its returns follow the cycles of|
|an economy. Cyclical stocks are generally the|
|opposite of defensive stocks. Cyclical stocks|
|include discretionary companies, such as|
|Starbucks or Nike, while defensive stocks are|
|staples, such as Campbell Soup|
|Defy gravity||Loose ground/hang|
|Doji Candle||A doji candle stick forms when a security’s|
|open and close are virtually equal for the given|
|time period and generally signals a reversal|
|pattern for technical analysts. In Japanese,|
|“doji” means blunder or mistake, referring to|
|the rarity of having the open and close price|
|be exactly the same|
|Dollar wilts||Fading dollar|
|Dovish||When the Fed or central bank is less worried|
|about inflation and more worried about weak|
|growth, high unemployment, or even deflation|
|because the economy is either growing weakly|
|or even contracting|
|Economy resurgence||Economy recovery|
|Eke higher||Move higher|
|Fibonacci retracement||In finance, Fibonacci retracement is a method|
|of technical analysis for determining support|
|and resistance levels. They are named after|
|their use of the Fibonacci sequence. Fibonacci|
|retracement is based on the idea that markets|
|will retrace a predictable portion of a move,|
|after which they will continue to move in the|
|Flocked to||Headed to/gather to|
|Forge ahead||Make progress/ go forward|
|G 10 Currencies||The G10 currencies are ten of the most heavily|
|traded currencies in the world, which are also|
|ten of the world’s most liquid currencies|
|Head and Shoulder||A head and shoulders pattern is a chart|
|formation that appears as a baseline with|
|three peaks, the outside two are close in|
|height and the middle is highest. In technical|
|analysis, a head and shoulders pattern|
|describes a specific chart formation that|
|predicts a bullish-to-bearish trend reversal.|
|Hitch up||Move upward|
|Jaded Trade||Dull trade|
|Keeping light under a bushel||Modest/humble|
|Leaps and Bound||To move upward|
|Nuts and Bolts||Fundamentals/ Key point|
|On the horns of dilemma||Facing a choice between two equally|
|Oozing out release in drops|
|Penny Stocks||Penny stocks are common shares of small|
|public companies that trade for less than one|
|dollar per share.|
|Reflation Trade||Reflation trades tend to involve assets exposed|
|to faster economic growth, price pressures|
|and higher yields|
|Revved up||To trigger|
|Ruling with a rod of iron||Under strict monitoring|
|Seize Opportunity||Grab the opportunity|
|Short Squeeze||In the stock market, a short squeeze is a rapid|
|increase in the price of a stock owing primarily|
|to technical factors in the market rather than|
|Silver Lining||Being optimistic|
|Spic and span||Cleaned/trimmed|
|Spiraling down||Going down|
|Sturdy Momentum||Strong drive|
|Supplementary support||Additional hold|
|Swiftly Trimmed||Quickly Cut|
|Teeter on brink||Seesaw/Tremble|
|Topping patterns||Bullish market|
|Topsy-turvy||State of disorder|
|Tot up||Add up|
|Upturned course||Reverse route|
|Wallstreetbets||WallStreetBets or WSB, is a sub-reddit where|
|participants discuss stock and option trading. It|
|has become notable for its profane nature,|
|aggressive trading strategies, and role in the|
|GameStop short squeeze that caused losses on|
|short positions in U.S. firms toppingUS$70|
|billion in a few days in early 2021|
|Wave white flag||To give up on something|