Glossary of Terms – Trading on the Exchange

Trading
Trading is trading in financial markets.

Trader
A Trader is someone who traded on the stock exchange. He decides what to buy and for how much.

Share
Shares or share in the profits of the company. If you are buying or selling shares, you become a shareholder in the company.

Commodities
The term commodity you can imagine raw materials. They are as precious metals (gold, silver, platinum), energy resources (oil, natural gas), grains (oats, wheat, barley) and other sources such as corn, beef, pork, coffee and so on

Forex
If you are trading on Forex so the means of trading currency pairs. It is such as EUR/USD, EUR/GBP, USD/GBP. These markets are very liquid. Currency pairs you can trade 24 hours a day.

Exchange
This is where it all happens.

Liquidity
Liquidity refers to how quickly you can sell a financial instrument bought back some buyers. The higher the ratio, the better for you. For example, the currency pair EUR / USD can sell back to the market in a few seconds.

Volatility
Volatility refers to how much the markets move. What is their daily range of prices? A lot of volatile market as already mentioned currency pair EUR/USD, while the less volatile instrument as maize. Less volatile markets are suitable for beginners.

Dividend
Dividends are the share of the profits. If you buy shares of the company and the company pays a dividend of 10% of profits to its shareholders, the money you have that forever. However, you must keep the company’s shares.

Broker
If you want to buy or sell a stock, currency pair or other instruments, do not do it without your broker. Brokers are people or companies through which he trades.

Spread
Spread is a fee for the deal. The more the instrument (currency pair, stocks, commodities) traded, the less than spread.

Technical Analysis
Technical Analysis help people explore what instrument to buy or sell. Technical, therefore, those decisions are made based on a graph, various technical indicators, which is already a lot. Mathematical figures out the success of the business or plotted on a graph lot lines.

Fundamental Analysis
In contrast, fundamental analysis is based on what is happening in the world. People watching news and results of the economy or companies. Counted value of the company and accordingly decide whether a given instrument purchase or not.

Crowd Psychology
Markets behave randomly according to the crowd. You can never determine exactly which direction the market will. People decide based on various indicators which monitor, reports on the economy or just randomly on some bets.

Short positions
If you are opening a short position means that you think the market will go down. Speculation thus the decrease in the price of the instrument.

Long positions
If you are opening a long position means that you think the market will go up. Therefore speculate on the growth rates of the instrument.

Speculation
If you are trading the financial markets, never at 100% know what direction the market will go. That’s why it’s called speculation.

Financial markets
Financial markets are everything we can trade. Whether you are currency pairs, stocks or commodities.

EUR/USD
This is the most traded currency pair in the world. Therefore include the fee for purchase or sale of instrument for one of the lowest in the market.

Open price
It is the price at which the market opens.

High price
It is the highest price of the financial instrument for a specific time horizon.

Low price
The lowest price of the financial instrument for a specific time horizon.

Close price
It is the price at which the instrument closes

Timeframe
The timeframe is the period of time that you are watching the market. You can monitor the market such as the 5 min, 15 min, 30 min, 1 hour, 1 day period. Each line on the graph then corresponds to how many min/hour watching period.

Candlestick chart, Line chart and Bar chart

These are the types of chart that you can watch on your screens.