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Trading Glossary

Every trading term, explained in plain English. New to the markets? Start here and look up anything you don't recognise.

A

Altcoin: Any cryptocurrency other than Bitcoin.
Appreciation: An increase in the price of an instrument driven by market demand.
Arbitrage: Buying and selling the same asset in different markets at the same time to profit from a price difference.
Ask Price: The price at which the market is willing to sell an asset to you.
Asset: The underlying instrument you trade — such as a currency pair, stock, commodity or index.
At the Money: When an option’s strike price equals the current market price, with no profit or loss.

B

Base Currency: The first currency quoted in a forex pair.
Bear: A trader who expects prices to fall.
Bear Market: A market in which prices are generally falling.
Bid Price: The price at which the market is willing to buy an asset from you.
Bid/Ask Spread: The difference between the bid and ask prices — the cost of entering a trade.
Blockchain: A distributed digital ledger that records cryptocurrency transactions across many computers.
Break Even: A position with no overall profit or loss.
Broker: An intermediary that gives traders access to financial markets.
Bull: A trader who expects prices to rise.
Bull Market: A market in which prices are generally rising.

C

Cable: Forex slang for the GBP/USD currency pair.
Call Option: An option bought when you expect the price of an asset to rise.
CFD: Contract for Difference — an agreement to exchange the difference in an asset’s price without owning it.
Closing Price: The price at which a position is closed.
Commission: A fee charged for executing a trade. Fidorix accounts are commission-free.
Commodities: Physical goods that are produced or mined, such as gold, oil or silver.
Counter Currency: The second (quote) currency in a forex pair.
Currency Pair: Two currencies quoted against each other, such as EUR/USD.

D

Day Trading: Opening and closing positions within the same day rather than holding overnight.
Demo Account: A practice account funded with virtual money so you can trade risk-free.
Depreciation: A fall in the value of an instrument due to lower demand.
Derivative: An instrument that lets you trade on an asset’s price without owning the asset itself.
Dividend: A share of a company’s earnings paid to shareholders.
Downtrend: A series of lower highs and lower lows — a falling market.

E

Euro: The official currency of the eurozone.
Exotic Pairs: The least-traded, less liquid currency pairs.
Expert Advisor: An automated program that can analyse markets and place trades on your behalf.
Expiry: The time or date when an option contract becomes void.

F

Fiat: Traditional government-issued currency, as opposed to cryptocurrency.
Fibonacci: A method that uses ratios to identify likely support and resistance levels.
Fill: The execution of an order.
Flat: Having no open positions in the market.
Forex: The foreign exchange market, where currencies are traded.
Fundamental Analysis: Assessing economic and financial factors to value an instrument.
Futures Contract: An agreement to buy or sell an asset at a set price on a future date.

G

Gap: A difference between the closing price of one session and the opening of the next.
GDP: Gross Domestic Product — the total value of goods and services an economy produces.
Going Long: Buying an asset because you expect its price to rise.
Going Short: Selling an asset you don’t own because you expect its price to fall.
GTC: Good Till Cancelled — an order that stays active until you cancel it.

H

Hedging: Opening offsetting positions to reduce the risk of losses.

I

In the Money: When a trade or option is currently in profit.
Index: A basket of representative stocks, such as the S&P 500.
Inflation: A general rise in the price of goods and services over time.
Initial Margin: The deposit required to open a leveraged position.
Interest Rate: The percentage charged or paid for the use of money.
Introducing Broker: A person or firm that refers clients to a broker.

J

Japanese Yen: One of the most-traded currencies in the forex market.

K

Kiwi: Slang for the New Zealand Dollar.
KYC: Know Your Customer — identity verification required to open an account.

L

Leverage: A tool that lets a small deposit control a larger position. It amplifies both gains and losses.
Limit Order: An order to buy or sell at a specified price or better.
Liquidity: How easily an asset can be bought or sold without moving its price.
Long Position: A buy position that gains value if the price rises.
Lot: A standardised trade size. One standard forex lot is 100,000 units of the base currency.

M

MACD: Moving Average Convergence Divergence — an indicator of trend and momentum.
Margin: The funds required to open and maintain a leveraged position.
Margin Call: A notice that your account needs more funds to keep positions open.
Market Order: An order to buy or sell immediately at the current price.
Moving Average: A line that smooths price data to highlight the trend.

N

Negative Balance Protection: A safeguard that ensures you can never lose more than you deposit.
Net Position: Your overall exposure after offsetting opposite positions.

O

OCO: One-Cancels-the-Other — paired orders where executing one cancels the other.
Order: An instruction to buy or sell an instrument.
Out of the Money: When a trade or option is currently at a loss.
Overnight Position: A position held open into the next trading day, which may incur a swap charge.

P

Payout: The profit earned from a successful trade.
Pip: The smallest standard price move in a forex pair — usually the fourth decimal place.
Position: Your open exposure in a market.
Private Key: The secret code used to access a cryptocurrency wallet.
Put Option: An option bought when you expect the price of an asset to fall.

Q

Quote Currency: The second currency in a pair, used to price the base currency.

R

Range: A market trading between defined high and low boundaries.
Resistance: A price level where selling pressure tends to halt a rise.
Risk Management: Strategies used to limit and control trading losses.
Rollover: Extending the settlement of an open position to the next day.
RSI: Relative Strength Index — an oscillator that flags overbought or oversold conditions.

S

Scalping: A strategy of taking many small, short-term trades.
Short Position: A sell position that gains value if the price falls.
Slippage: The difference between the expected and actual execution price of a trade.
Spread: The difference between the bid and ask price. Fidorix spreads are fixed.
Stop-Loss Order: An order that automatically closes a position to limit losses.
Strike Price: The set price at which an option can be exercised.
Support: A price level where buying pressure tends to halt a fall.
Swap: The interest charge or credit for holding a position overnight.

T

Take Profit: An order that automatically closes a position once a target profit is reached.
Technical Analysis: Studying past price data and charts to forecast future moves.
Trailing Stop: A stop-loss that moves with the market to lock in gains.
Trend: The overall direction of a market — up, down or sideways.

U

Uptrend: A series of higher highs and higher lows — a rising market.
US Dollar: The official currency of the United States and the world’s primary reserve currency.

V

Value Date: The date on which a transaction settles.
Volatility: A measure of how much and how fast a price moves.

W

Wallet: A digital tool used to store cryptocurrency holdings.
Whipsaw: A volatile market with sharp moves and reversals that can trigger stops.
Wire Transfer: An electronic transfer of funds between institutions.

X

XAG: The currency code for silver.
XAU: The currency code for gold.

Y

Yield Curve: A graph showing interest rates across different debt maturities.

Z

ZAR: The currency code for the South African Rand.

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