Vocabulary

• Forex – Also known as foreign exchange, FX or currency trading, it is a decentralized global market where all the world's currencies trade.
• Currency Pair – The quotation and pricing structure of the currencies traded in the forex market.
• Base Currency – The first currency quoted in a currency pair in forex. It is also typically considered the domestic currency or accounting currency.
• Quote Currency – The second currency quoted in a forex currency pair.
• Pip – The smallest price move that a given exchange rate makes based on market convention.
• Spread – The difference between the buy price and the sell price.
• Leverage – The use of borrowed money to increase trading potential.
• Margin – The amount of money required in your account to keep your trades on the market.
• Lot – The standard unit size of a transaction.
• Bid Price – The price at which the market is prepared to buy a specific currency pair in the forex market.
• Ask Price – The price at which the market is prepared to sell a specific currency pair in the forex market.
• Going Long – A situation where a trader decides to buy a currency pair.
• Going Short – A situation where a trader decides to sell a currency pair.
• Bull Market – A financial market of a group of securities in which prices are rising or are expected to rise.
• Bear Market – A condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-sustaining.
• Technical Analysis – A trading discipline employed to evaluate investments and identify trading opportunities in price trends and patterns seen on charts.
• Fundamental Analysis – A method of evaluating a security in an attempt to measure its intrinsic value, by examining related economic, financial and other qualitative and quantitative factors.
• Forex Broker – An entity which connects retail forex traders with the forex market.
• Liquidity – The degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price.
• Volatility – Statistical measure of the dispersion of returns for a given security or market index.
• Carry Trade – A strategy in which an investor borrows money at a low interest rate in order to invest in an asset that is likely to provide a higher return.
• Stop-Loss Order – An order placed with a broker to sell a security when it reaches a certain price.
• Take-Profit Order – An order placed with a broker to sell a security when it reaches a certain price.
• Day Trading – The process of buying and selling a financial instrument within the same day or even multiple times over the course of a day.
• Swing Trading – A style of trading that attempts to capture gains in a stock (or any financial instrument) over a period of a few days to several weeks.
• Position Trading – A type of trading where an individual holds a position in a security for a long period of time, typically months or years.
• Scalping – A trading strategy that involves buying and selling quickly, with the goal of making small profits repeatedly.
• Slippage – The difference between the expected price of a trade and the price at which the trade is actually executed.
• Arbitrage – The simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.
• Spot Market – A public financial market in which financial instruments or commodities are traded for immediate delivery.
• Forward Market – A contract is agreed between buyer and seller to trade an asset at a future date.
• Futures Market – A central financial exchange where people can trade standardized futures contracts.
• Options Market – A market which gives traders the opportunity to trade options, or derivatives based on assets such as stocks, ETFs, and index funds.
• Central Bank – A national bank that provides financial and banking services for its country's government and commercial banking system.
• Interest Rate – The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
• Inflation – The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
• Deflation – The general decline in prices for goods and services occurring when the inflation rate falls below 0%.
• GDP (Gross Domestic Product) – The total value of everything produced by all the people and companies in the country.
• Recession – A significant decline in economic activity spread across the economy, lasting more than a few months.
• Economic Indicator – A statistic about an economic activity, such indicators allow analysis of economic performance and predictions of future performance.
• Trading Platform – Software through which investors and traders can open, close, and manage market positions.
• MetaTrader 4/5 – Popular forex trading platforms that provide trading and analytical functions.
• Liquidity Providers – Market participants that provide liquidity in the financial markets, they are either banks or large brokerage firms.
• Hedging – Making an investment to reduce the risk of adverse price movements in an asset.
• Swap – A derivative contract through which two parties exchange financial instruments.
• Contract for Difference (CFD) – A contract between two parties, who agree to pay the difference between the opening price and closing price of a certain asset.
• Over-The-Counter (OTC) – A trading venue where securities that aren't listed on other exchanges are traded.
• Speculation – The act of trading in an asset or conducting a financial transaction that has a significant risk of losing most or all of the initial outlay in expectation of a substantial gain.
• Equity – A stock or any other security representing an ownership interest.
• Diversification – The strategy of investing in a variety of securities in order to lower the risk involved in putting money into few investments.