Trader’s vocabulary | Educatic

Vocabulary

Trader’s vocabulary, which may bring good fortune.

A B E F G J L M O P S T V

A

Asset

Any financial product that can be traded (bought or sold) on the stock market. Financial assets are therefore listed stocks, bonds, currency pairs, commodities, indices, etc.

B

Broker

Refers to a company or person who executes orders to buy and sell a financial asset on behalf of a trader. 

Bullish and Bearish

Represent a bull and a bear market. Bullish is the derivative of “bull,” which means “bull” in French. Bearish comes from the word “bear,” which means “Ours” in French.

E

Economic Calendar

The diary which lets you know the date and time of the publication of relevant economic data, such as interest rates. 

F

Financial Instrument

Designates securities or contracts that can mostly be negotiable on the financial market (and the capital market in general).

G

Gap

Refers to significant “gaps” between the current session’s opening price and the previous session’s closing price. This difference appears as a void on the graph, earning it the name Gap, which means “gap” or “hole” in English.

J

Japanese Candlestick

Graphical representation of the price of an asset in the form of a Japanese candle. A candle represents a specific time frame.

L

Leverage

An instrument that allows a trader to multiply their initial capital on a transaction, thanks to funds made available by their broker.

Long

Used to refer to taking a long position.

M

Market

Refers to where financial assets are exchanged (bought and sold). Thus, the value of assets constantly varies according to the pressure of buyers and sellers (supply and demand).

Money Management

The trading lexicon is used to designate the capital management technique to limit losses so as not to lose all of one’s investments.

O

Order

A request is made to a broker to buy or sell a financial asset. It can be a limit order, a market order, or a stop order.

P

Position

An order that is currently open (already executed) and which can generate profits or generate losses. It can be a long position that bets on the rise in the price of an asset; or a selling position (Short) that bets on the fall in the price of an asset.

Price Action

Trading strategy that consists of studying the movement of the past price, without the help of technical indicators, to predict its potential direction in the future.

R

Resistance 

The critical level (price) is where the cost of an asset collides several times. It is then a zone whose price does not manage to exceed.

S

Shorts

Used to refer to taking a short position.

Spread

Difference between an asset’s purchase price (ask) and the sale price (bid) over a defined period.

Stop Loss

Order placed by a trader on a level (price) where they will close their position in case of loss.

Stop Order

An order that triggers when the price of an asset rises above or crosses a specific price.

Support

The critical level (price) is where the cost of an asset bounces several times. This is then an area where buyers are in control.

Swap

A simultaneous purchase and sale operation is made automatically by the broker to update each currency’s value according to its interest rate. 

T

Timeframe

Unit of time for visualising a stock chart. A graph can be configured on several timeframes, namely 1 – 5 – 15 minutes, 1 – 4 hours, one day, one week, or one month.

Trailing Stop

Type of stop loss that moves as a trader’s position becomes a winner. Thus, the trailing stop allows you to protect a winning position. It can be manual or automatic.

V

Volatility

Amount of movement or variation in the price of a financial asset.