Trading glossary

What is arbitrage in trading? It happens when you can take advantage of price difference - buy an asset at one place and immediately sell it in another market with profit.

What does ask price refer to in trading? It’s the price a seller asks from buyers in a market. When the asking price matches the bid price (offered by potential purchasers) usually a transaction happens.

What is an asset in trading? It’s a resource that can be possessed and exchanged between parties. A bond, currency, equity, commodity, or cryptocurrency - are some examples of assets. In practice traders exchange assets themselves (spot market) or contracts tied to assets (ie. futures market).

Traders can teach computer programs to make trade orders for them. The practice is called algorithmic trading. The orders can be executed by simple rules, ie. decision tree, or by deep learning algorithms that are able to teach themselves.

What is a base rate. Central banks, such as Fed, Bank of England or European Central bank, set the rate they charge commercial banks for loans. Higher base interest rates slows inflation, rises income from bank deposits, but also rise the cost of borrowing, and negatively influences the stock market.

Bull and bear are symbols of uptrend and downtrend. Bears are skeptical, they expect the prices of an asset (cryptocurrency or stock) to go down, or even collapse. They usually try to short the companies or cryptos at the right time. On the other hand, bulls are optimistic about the future price. They want to buy low and sell in future.

What does it mean that one currency is pegged to another? Usually currencies used in different countries can be freely exchanged between buyer and sellers. It is less common that they are pegged, tied to the price of another currency, usually at the 1:1 ratio. Cryptos can be pegged aswell. The most popular are stablecoins tied to US dollar, such as Tether, USD Coin, or Binance Coin. Pegging a currency is tricky, as the central bank (or stablecoin issuer) needs to control the price.

What is CPI? It’s one of the most popular tool to measure the inflation. It tracks the change of the prices customers pay for goods and services. It’s given in percentages. If it is too high central banks need to act and raise interest rates. The move can slo the economy down, but will help to curb inflation.

Le Take profit est un ordre de clôture d'une position ouverte à un prix favorable pour le client par rapport au prix d'ouverture de l'ordre. Une fois le niveau take profit atteint, l'ordre sera clôturé.

Un stop suiveur est un type d'ordre stop loss. Il correspond à un pourcentage défini en dessous du prix de marché (pour les positions acheteuses) ou au-dessus de celui-ci (pour les positions vendeuses).

What is fundamental analysis? It’s one of the most popular approach to assessing the value of an asset. For companies it takes into account their cashflow, reserves, financial and market results, as well as future potential. Traders who can correctly measure the fundamentals of an asset can see market opportunities as the current market price may be lower or higher than the intrinsic value of a stock, commodity, or cryptocurrency.

You might have heard of futures. These are derivatives. Buyers and sellers agree to a transaction at a specific price at a specific time in the future. Futures are a good way to hedge current positions. They are also often more volatile than the spot market, as futures prices sometimes can drop to negative.

What is GDP? Gross domestic product is the sum of the value of the goods and services produced in a country (or region). Usually economists measure annual GDP to check if the economy is growing or shrinking, and to compare the economic power of a territory.

Some trades, positions or investmets are done to make profit, other to reduce ones exposure to risk. Companies, countries, and individuals can hedge making a move opposite to their main position. You may hedge by shorting futures of an asset you own (Bitcoin, Tesla stocks), or by investing in an asset which price usually moves inversely.

What is HFT? The use of computers introduced algorithmic trading and high frequency trading. Automatic algorithms can perform trades faster than humans, and find a better price, buy and sell faster than a trader acting manually. HFT strategies can lead to “flash crashes”, when algorithms make the same mistake at the same time.

What does IPO mean? The shortest definition is the stock exchange debut - the first sale of the equity in the public market. IPO turns a private owned company into a public company as anyone can buy a stake in it. Companies raise new investment capital through IPO, the owners decide to sell part of their firm. Before an IPO investment banks and owners asses the value of the company and propose a price per share. However, on the day a company goes public big price movements are very common.

If you borrow money, you are supposed to pay interest to the lender. The price of the credit is usually expressed by annual percentage rate (APR). A second meaning of interest is the stake a stockholder has in a company, also expressed as a percentage.

What is intrinsic value? In finance the term is used to describe the true value of an asset, which usually is different from the market price. Companies, commodities, or currencies are undervalued or overvalued as it is difficult to assess the intrinsic value. Traders try to do it using fundamental analysis.

What is a limit order? Traders can open orders at a more attractive price than the current one. If you want to buy an asset, you can place a limit order at a lower price. If you are selling at a higher price. The limit order will be fulfille only when the market reaches your desired level.

What is leverage in finance? It’s a method of making more profit without investing more money. Traders can open a position using margin, which can be just a fraction of the value of an order. The margin trading provider lends the missing funds to their clients. Leverage allows you to make much more money if you are on the right side of the market, but if the market goes against you, you can quickly loose the margin.

When trading different assets you will quickly realize, that in some markets transactions happen very often, an don the others you’d need to wait several minutes for a price to change. This is the concept of liquidity. Liquid assets can be bought and sold any time, while less liquid assets (ie. expensive yachts) need a specific buyer.

When the funds on a trading account fall below the level needet to keep a position open, the owner receives a margin call warning. Unless more money is added to an account, the position will be automatically closed. In the past brokers would literally call their clients to inform about the situation, that’s where the term derives from.

UL'appel de marge est une alerte pour le trader lorsque l'équité du compte tombe en dessous de 80 % du niveau de marge. Cela signifie que le compte ne dispose plus que de la marge fournie et qu'il doit être alimenté avec plus d'argent afin d'éviter un Stop Out ou une fermeture forcée. La plateforme de trading commencera à fermer les positions de trading au niveau du Stop Out, qui est fixé à 30% du niveau de marge.

Bitcoin est une monnaie numérique créée en 2009, sur la base d'un article publié par Satoshi Nakamoto. Le Bitcoin permet d'effectuer des paiements (et des micropaiements) à un coût très faible, en l'absence d'émetteur et d'autorité centrale.

Un courtier Forex est un intermédiaire entre vous et un teneur de marché interbancaire, un réseau de banques qui tradent entre elles. Généralement, un courtier Forex vous offrira les prix communiqués par les banques, en jouant un rôle de fournisseur de liquidité. SimpleFX utilise plusieurs banques et vous offre les meilleurs prix disponibles ainsi que des exécutions rapides.

Un marché au comptant est un marché où les instruments sont échangés pour une livraison immédiate.

Le spread est la différence entre le prix d'achat et le prix de vente. Le prix de vente est le prix auquel vous pouvez vendre une paire de devises et le prix d'achat celui auquel vous pouvez l'acheter. Vous pouvez trader de nombreux instruments avec des spreads variables grâce à nos services. Cela vous offre davantage de transparence sur vos prix de transaction.

Un Stop loss est un ordre de clôture d'une position à un prix défavorable pour le client par rapport au prix d'ouverture de l'ordre. Le Stop loss est la limite à laquelle vous avez décidé de liquider votre ordre. Une fois cette limite atteinte, votre ordre sera clôturé. Ce type d'ordre est utile si vous souhaitez minimiser vos pertes lorsque le marché évolue en votre défaveur. Les niveaux stop loss sont toujours paramétrés en-dessous du prix d'ACHAT pour protéger une position longue et au dessus du prix de VENTE pour protéger une position courte.

La taille de la transaction fait référence à la taille de la position que vous souhaitez ouvrir, et NON au montant de vos fonds que vous souhaitez utiliser. Elle dépend de l'instrument.

La marge est un pourcentage du notionnel d'un trade exigé par un courtier lors de l'ouverture d'une position par un trader. Ce montant n'est pas une commission ni un coût de transaction, il s'agit simplement d'une portion de l'équité du compte qui sert de garantie pour la transaction. Les exigences de marge sont calculées en prenant un pourcentage du notionnel du trade et déterminées par le courtier en fonction des conditions de marché.

Un glissement se produit lorsque le marché effectue un bond ou lorsque la liquidité disponible à un certain prix est épuisée. Les sauts de marché se produisent dans les marchés volatiles, le prix peut alors sauter de plusieurs pips sans trader aux prix intermédiaires. De même, la liquidité disponible à chaque niveau est limitée. Par exemple, si 1 million est disponible à 50, un ordre pour 3 millions subira un glissement, étant donné que 3 millions dépassent le million disponible à 50.

Le terme « volume d'un ordre » est le nombre de lots standards que vous souhaitez trader. 1,00 correspond à 1 lot standard, soit 100 000 unités de la devise de base, 0,10 correspond à 1 mini lot ou 10 000 unités de la devise de base. 0,01 correspond à 1 micro lot, soit 1 000 unités de la devise de base

Si vous achetez une paire de devises, vous ouvrez une position « long » à l'achat ; si vous vendez, on parle de position « short » à la vente. Par exemple, si vous achetez 1 lot de la paire EUR/USD, vous avez une position long de 100 000 EUR. Si vous vendez 10 lots d'AUD/CAD, vous avez une position short de 1 000 000 AUD.

When placing a stop order you want to execute a trade when the price is less attractive for you than the current one. Why would you want to do it? To stop loss. If you are holding an asset, you may want to sell if the price goes down before it crashes for good.

In forex trading, FIFO (First In, First Out) is a rule requiring that you exit your first (or oldest) open trade if you have multiple trades of the same pair and size open. This can impact hedging strategies where you aim to open opposite positions (BUY and SELL) on the same instrument for risk management. If FIFO is enabled on your platform, opening a new position in the opposite direction will close the oldest position of the same size, preventing simultaneous BUY and SELL positions. To maintain both positions,, you need to disable the FIFO option, available in the Symbols panel next to the trade calculator.

Rollover is an automated process engineered to transfer your position to the next available contract on futures-based CFDs, such as BUND or TNOTE. It's free of charge and enables you to hold your position open past its expiration date without the need to close and reopen it at a new rate manually. More details, examples and upcoming rollover dates can be found here.