We've organized an alphabetical dictionary of all the essential terms you need
to know in order to understand CFDs and FX terminology.
When withdrawing funds from your TradingTeck account, a minimum withdraw amount of $50 is required. Additionally, the minimum withdrawal amount for wire transfers is $100.
A financial professional who has expertise in evaluating investment opportunities and puts together buy, sell, and hold recommendations for clients.
Arbitrage is the purchase and sale of an asset in order to profit from a difference in the asset's price between markets.
The price at which an investor can buy an asset in the financial markets. The asking price is a part of the formula that is used to calculate the expiry level of an instrument.
The price for which the market maker will sell the base currency.
Underlying assets are used in derivative trading to describe an asset whose price can be derived from a different asset. Derivatives are exchanged for cash and therefore do not require an exchange of the physical asset. Underlying assets refer to a contract based on the price of these assets but without requiring its exchange or even ownership. The price for which the market maker will sell the base currency.
Commodities - Gold, Silver, Oil, etc.
Indices - NASDAQ, Dow Jones, DAX 30, etc.
Stocks - Amazon, Facebook, Google, etc.
Currencies - USD/CAD, EUR/GBP, AUD/USD, etc.
The average true range (ATR) is a technical analysis indicator that measures market volatility by decomposing the entire range of an asset price for that period.
Funds available for trading (unattached to any position yet).
The amount of money held in your account excluding profits and losses of currently open positions.
A bank rate is the interest rate at which a nation's central bank lends money to domestic banks, often in the form of very short-term loans. Managing the bank rate is a method by which central banks affect economic activity. Lower bank rates can help to expand the economy by lowering the cost of funds for borrowers, and higher bank rates help to reign in the economy when inflation is higher than desired.
The first currency in a currency pair. It represents how much the base currency is worth when measured against the other currency. For instance, if the EUR/USD (Euro/US Dollar) rate is equivalent to 1.07555, then one Euro is worth 1.07555.
Describing a market in which there are few buyers and many sellers. A bearish market occurs due to declining prices, and is sometimes associated with high trading volume.
The price for which the market maker will buy the base currency.
A Bollinger Band® is a technical analysis tool defined by a set of lines plotted two standard deviations (positively and negatively) away from a simple moving average (SMA) of the security's price, characterizing the prices and volatility over time.
A written and signed promise to pay a certain sum of money on a certain date, or on fullfillment of a specified condition. All documented contracts and loan agreements are bonds.
A buy limit order is an order to purchase an asset at a specified price, allowing traders to control how much they pay.
Describing a market in which there are few sellers and many buyers. A bullish market occurs due to rising prices, and is sometimes associated with investors confidence.
Cable is a term used among forex traders referring to the exchange rate between the U.S. dollar (USD) and the British pound sterling (GBP).
CAC 40 is the French stock market index that tracks the 40 largest French stocks based on the Euronext Paris market capitalization.
A candlestick chart is a style of financial chart used to describe price movements of an asset. Candlesticks are useful when trading as they show four price points (open, close, high, and low) throughout the period of time the trader specifies.
A carry trade in forex involves a trader attempting to profit from the difference in interest rates – known as the interest rate differential – between the two currencies in a forex pair.
A central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations. In modern economies, the central bank is usually responsible for the formulation of monetary policy and the regulation of member banks.
A contract for difference is a type of derivative instrument that gives exposure to the change in value of an underlying asset. It allows traders to leverage their capital and provides all the benefits of trading on underlying assets without actually owning them.
A chart is a graphical representation of the price movement of an asset.
Closed P&L (Profit and Loss) refers to profit or loss on a completed trade. This means a position which has been initiated and then closed. It also includes any and all fees and commissions associated with the transaction.
Exposure to a financial contract, such as currency, that no longer exists.
A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Commodities are usually categorized into four basic groups: energy, metals, livestock and agriculture.
The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living. The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.
The standard unit of Forex trading.
In investing, a correction is a decline of 10% or more in the price of a security from its most recent peak. Corrections can happen to individual assets, like an individual stock or bond, or to an index measuring a group of assets.
A cross rate is the currency exchange rate between two currencies when neither are the official currencies of the country in which the exchange rate quote is given. Foreign exchange traders often use the term to refer to currency quotes that do not involve the U.S. dollar, regardless of what country the quote is provided in.
A digital currency, such as Bitcoin, in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
The DAX—also known as the Deutscher Aktien Index—is a stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange.
A day trader is a trader who executes a large volume of short and long trades to capitalize on intraday market price action. Day trading comes with a high degree of risk and uncertainty.
Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types in an attempt at limiting exposure to any single asset or risk.
Donchian Channels are three lines generated by moving average calculations that comprise an indicator formed by upper and lower bands around a mid-range or median band. The upper band marks the highest price of a security over N periods while the lower band marks the lowest price of a security over N periods. The area between the upper and lower bands represents the Donchian Channel.
The Dow Jones Industrial Average (DJIA) is an index that tracks 30 large, publicly-owned blue chip companies trading on the New York Stock Exchange (NYSE) and the NASDAQ.
Earnings per share (EPS) is a company's net profit divided by the number of common shares it has outstanding. EPS indicates how much money a company makes for each share of its stock and is a widely used metric for corporate profits.
The European Central Bank (ECB) is the central bank responsible for monetary policy of those European Union (EU) member countries which have adopted the euro currency. This region is known as the eurozone and currently comprises 19 members. The principal goal of the ECB is to maintain price stability in the euro area, thus helping preserve the purchasing power of the euro.
A government-issued statistic that indicates current economic growth and stability. Common indicators include NFP (Non-Farm Payrolls), GDP (Gross Domestic Product), Monetary Policy Statements, etc.
Your account balance, including profit and loss of all open positions.
An exchange-traded fund (ETF) is a basket of securities that trade on an exchange, just like a stock. ETFs can contain all types of investments including stocks, commodities, or bonds; some offer U.S. only holdings, while others are international.
An exponential moving average (EMA) is a type of moving average (MA) that places a greater weight and significance on the most recent data points. An exponentially weighted moving average reacts more significantly to recent price changes than a simple moving average (SMA), which applies an equal weight to all observations in the period.
The Net Exposure (%) covered by your equity.
The Federal Reserve System (FRS) is the central bank of the U.S. The Fed, as it is commonly known, regulates the U.S. monetary and financial system.
Fibonacci retracements are popular tools that traders can use to draw support lines, identify resistance levels, place stop-loss orders, and set target prices.
Forex (FX) is the marketplace where various national currencies are traded. The forex market is the largest, most liquid market in the world, with trillions of dollars changing hands every day. There is no centralized location, rather the forex market is an electronic network of banks, brokers, institutions, and individual traders
The FTSE 100 includes the largest 100 companies which list on the London Stock Exchange (LSE) and represents about 80% of the total market capitalization of the exchange. FTSE 100 is a market-cap weighted index.
The macro economic factors that are accepted as forming the foundation for the relative value of a currency. These include inflation, growth, trade balance, government deficit, and interest rates.
A method of evaluating a security by utilizing economic, financial and additional factors. The goal is to analyze all the factors that can affect a security, such as overall economic conditions, industrial environment and company-specific factors.
Futures—also called futures contracts—allow traders to lock in a price of the underlying asset or commodity. These contracts have expirations dates and set prices that are known up front. Futures are identified by their expiration month.
Gann fans are a form of technical analysis based on the idea that the market is geometric and cyclical in nature. A Gann fan consists of a series of lines called Gann angles. These angles are superimposed over a price chart to show potential support and resistance levels. The resulting image is supposed to help technical analysts predict price changes.
A type of limit order that is active until it is filled or canceled. As opposed to a day order, a GTC order can remain active for an indefinite number of trading sessions.
Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country’s economic health.
A head and shoulders pattern is a chart formation that resembles 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.
A position or a combination of positions that reduces the risk of your primary position.
An If Done Order actually consists of two orders: a primary order that will be executed as soon as market conditions allow it, and a secondary order that will be activated only if the first order is executed.
An index measures the performance of a basket of securities intended to replicate a certain area of the market, such as the Standard & Poor's 500.
A corporate entity which introduces accounts to a broker in return for a fee.
The New Zealand Dollar is often commonly referred to as a kiwi because of the national bird found stamped on the one-dollar coin.
A private company’s initial offer of stock to the public.
Statistics that are considered to predict future economic activities.
The ability to hold an investment position of greater value than your equity. When leveraging your investment, you simply deposit a part of the current value of the asset you are investing in.
Limit orders are commonly used to enter a market and to take profit at predefined levels. Limit orders to buy are placed below the current market price and are executed when the ask price hits or breaches the price level specified. Limit orders to sell are placed above the current market price, and are executed when the bid price breaches the price level specified.
A position that appreciates in value if market price increases. This position is usually taken with the expectation that the market will rise.
Loonie is a colloquial term for the Canadian dollar (CAD), the official currency of Canada. The loonie refers to the $1 Canadian coin and derives its nickname from the picture of a solitary loon on the reverse side of the coin
Moving Average Convergence Divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA.
Amount currently used to maintain your open positions. In order to keep your open position/s active, ensure that your equity exceeds the maintenance margin level. Otherwise the position will automatically close.
When your equity falls below the required Maintenance Margin, you are subject to a margin call to remedy the situation. To avoid having your positions closed for you (being stopped out), you must either close or reduce open positions, or send additional funds to cover your positions.
The percentage (of the 100% equity) you are currently using in your open positions. Margin usage = (Used margin/Equity) x100. For example, if your usable margin is €5000, in order to trade safely you need to limit your margin usage for each trade to a maximum of €250.
A market maker is a broker/dealer firm that assumes the risk of holding a certain number of shares of a particular security, in order to facilitate the trading of that security.
An order to buy or sell at the current price.
A moving average (MA) is a widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random short-term price fluctuations.
The Nasdaq 100 Index is a basket of the 100 largest, most actively traded U.S companies listed on the Nasdaq stock exchange. The index includes companies from various industries except for the financial industry, like commercial and investment banks. These non-financial sectors include retail, biotechnology, industrial, technology, health care, and others.
The sum of all your open positions currently traded on the markets.
The Nikkei 225 is short for Japan's Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index composed of Japan's top 225 blue-chip companies traded on the Tokyo Stock Exchange.
NonFarm Payrolls report measures the number of jobs added or lost in the US economy over the last month. It is released usually on the first Friday of each month and It is published by the US Department of Labor. This report is important because the US is the largest economy in the world and its currency (US Dollar) is the global reserve currency.
An order that will be executed when a market moves to its designated price.
An active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal.
Your total Profits and Losses in all open positions.
The order execution tool allows you to determine how your trades will be executed. Since market prices vary, some trade requests don’t receive an approval. And thus, we are thrilled to introduce an additional execution type that ensures your orders are always approved at the best current available price.
The Organization of the Petroleum Exporting Countries (OPEC) is a group consisting of 14 of the world’s major oil-exporting nations. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
A trade that remains open until the next business day.
The quotation and pricing structure of the currencies traded in the Forex market when matching one currency against the other.
The smallest price change that a given exchange rate can make. Since most major currency pairs are priced to four decimal places 0.0001, the smallest change is that of the last decimal.
A collection of investments owned by an individual.
An investment in an asset. For example, when you trade (say, BUY) USD/JPY, you open a USD/JPY position the minute you click the INVEST button.
The Purchasing Managers' Index (PMI) is an index of the prevailing direction of economic trends in the manufacturing and service sectors. The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
The pre-market is the period of trading activity that occurs before the regular market session. Many investors and traders watch the pre-market trading activity to judge the strength and direction of the market in anticipation for the regular trading session.
The difference between the cost price and the sale price, when the sale price is higher than the cost price.
When a price is trading between a defined high and low, moving within these two boundaries without breaking out of them.
Re-quote occurs when instead of slipping a trade, the broker presents the customer with the option to execute the trade at a different rate than the one they requested- when in such cases the rates originally requested are no longer available.
A price that may act as a ceiling. The opposite of support.
Exposure to uncertain change, most often used with a negative connotation of adverse change.
The employment of financial analysis and trading techniques to control exposure to various types of risk.
Retail sales tracks consumer demand for finished goods by measuring the purchases of durable and non-durable goods over a defined period of time.
When an open position is closed.
When a position is held at the end of a business day, it rolls over to the next value date and becomes subjected to a swap charge or credit, based on the interest rate ratio between the two trading currencies. Rollover/swap rates are calculated in points, and are automatically converted into the account base currency.
The RSI is a popular momentum oscillator that shows bullish and bearish price momentum, and it is often plotted beneath the graph of an asset's price. An asset is usually considered overbought when the RSI is above 70% and oversold when it is below 30%.
The S&P 500 or Standard & Poor's 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. The index is widely regarded as the best gauge of large-cap U.S. equities.
A safe haven asset is an asset that is expected to retain or increase in value during times of market turbulence.
Scalping is a trading strategy in which traders profit off small price changes for a stock. The positions are closed before the end of the total market trading session.
Taking a short position in expectation that the market is going to go down.
An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short.
A simple moving average (SMA) is a technical indicator that calculates the average of a selected range of prices, usually closing prices, by the number of periods in that range.
Slippage refers to all situations in which a market participant receives a different trade execution price than intended. Slippage occurs when the bid/ask spread changes between the time a market order is requested and the time an exchange or other market maker executes the order.
The difference between the bid price at which you can sell the trading asset and the ask price at which you can buy the trading asset.
A stochastic oscillator is a momentum indicator comparing a particular closing price of a security to a range of its prices over a certain period of time.
A stock split is a corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares. Although the number of shares outstanding increases by a specific multiple, the total money value of the shares remains the same compared to pre-split amounts, because the split does not add any real value.
This is a stop order placed to buy above the current price, or to sell below the current price. When a stop order is executed, it becomes a market order and is filled as soon as possible at the price obtainable on the market.
This is a stop order that will execute and close a position to limit losses in case of an adverse market movement. When a stop order is executed, it becomes a market order and is filled as soon as possible at the price obtainable on the market. Note that this price may differ from the price you set for the order (Slippage).
A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself. The opposite of resistance.
A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
The term “Swissy” refers to the currency pair USD/CHF, which measures the strength of the U.S. dollar to the Swiss franc.
A method of evaluating an asset by studying statistical data related to its historical performance, such as past prices and volume. Charts and graphs, in addition to other research tools, are utilized to identify any possible patterns that may be indicators of future activity.
An acronym for “Take Profit”. Refers to limit orders that look to sell above the level that was bought, or buy back below the level that was sold.
A tick is a measure of the minimum upward or downward movement in the price of a security. A tick can also refer to the change in the price of a security from one trade to the next trade.
A trade signal is a trigger for action, either to buy or sell a security or other asset, generated by analysis.
The number of units of product in a contract or lot.
Each asset has its own trading hours and/or trading days; in addition to holidays.
Refers to the movement of a price over a period of time; as the time period of a price movement extends in a continuous direction, it reflects a hype-a trend. Recognition of a trend allows traders to make informed decisions based on the probability of the future direction of assets.
The total money value or volume of all executed transactions in a given time period.
The national unemployment rate is defined as the percentage of unemployed workers in the total labor force. It is widely recognized as a key indicator of the performance of a country's labor market.
Volatility often refers to the amount of uncertainty or risk related to the size of changes in a security's value. A higher volatility means that a security's value can potentially be spread out over a larger range of values.
Yield refers to the earnings generated and realized on an investment over a particular period of time.