Maybe you’re interested in learning more about trading definition and all of its terms. Take a look at this section to discover more on definitions. If you’re intending to involve yourself in trading, then you’ll need to know what some of the definitions used are all about. Multiple times, you may come across words or terms that you’re not so familiar with. It’s at these times that you’ll need a little bit of help with understanding what they mean. That’s why we’re here – to give you some insight into the meanings behind certain trading definition. So, join us for this small trading guide that you can learn from.
There’s a selection of trading terms that you may want to learn about and put to use when you’re placing your trades. So, what is the group of trading definition that we’re talking about?
What is trading? Definition and terms meaning
Broker – This is one of the basic definitions that you need to understand. A broker is an individual or a firm that arranges transactions between a buyer and a seller. If you’re going to be trading for a living, it’s important to find a good broker, and one that doesn’t charge a massive commission for your trades.
Bears and Bulls – All trading types have the prices for their assets on display. If the price shoots up in a specifically noticeable way, it’s common to hear it referred to as a bullish movement (bulls thrust their heads up when attacking). On the other hand, if there’s a bear pawing at you, this is a downwards movement, making it a bearish movement.
Commodity – Some people find that there’s less trading risk when it comes to dabbling in commodities. These are articles of commerce or a product that can be used for commerce. These types of commodities include options like metals, petroleum, agricultural products, indexes and more.
Daily Trading Limit – This refers to the maximum price range set by the exchange each day for a contract. This doesn’t halt trading, but it limits how far the price can move on any given day. It’s important to know about this as part of a good trading guide.
Forex Futures – Also known as FX or currency futures, this is a shortened term for foreign exchange futures. If you want to adopt great trading techniques, you’ll find that forex futures could be beneficial to trade. They provide you with exchange-traded contracts for buying or selling a specified amount of a currency on a set future date.
Liquid – This refers to a characteristic of a security or commodity market which has enough units outstanding to allow for large transactions without a substantial change in price. Anyone operating as an institutional investor are usually inclined to seek out liquid investments as part of their own trading standards. This is because it won’t influence the market price.
Scalp – Scalping is something that involves establishing and liquidating a position quickly. This allows for trading for small gains.
Speculator – This trading definition is all about a trader who tries to anticipate price changes and, through buying and selling futures contracts, aims to make profits from such.
Spreading – This trading technique requires the user to buy and sell from two related markets in the hope that a profit will be made when the position is offset.