Glossary of Trading Terms

There are a lot of technical terms that you might encounter with online trading and it can be really difficult to remember especially when you’re just starting to learn the basics.

Don’t worry. There’s a solution.

In this section we’ve listed the most commonly used terms when trading in the financial markets so you can easily familiarize yourself with the language.

Shall we begin?



Aggregate – a bank’s exposure to spot and forward forex contracts from a customer

Analyst – a professional who has expertise in analyzing and evaluating financial investments

Asian Session – the Asian trading session for forex trading. (5:00 PM EST – 2:00 AM EST)

Aussie – the AUD/USD currency pair.



Barrel – the unit of liquid volume used on international oil market that is estimated in US dollars

Bearish – belief that a currency’s value will decline and assumed as a general pessimistic trend

Bid – the price which the buyer is willing to shell out to make a purchase

BIS – short for Bank for International Settlements, the central bank for central banks

Bullish – belief that a currency’s value will rise and assumed as a general optimistic trend



Cable – the GBP/USD currency pair

Carry Trade – a trading strategy where the profit is gained from holding position with a positive swap and not from the price movement and closure of profitable position

Commodity Currencies – currencies of economies with exports that are heavily based in natural resources.

Consolidation – a period where market participants reassess the market and set the stage for the following price move

Crown Currencies – the Aussie, Sterling, Kiwi and Cad currencies

Cross – a pair of currencies without the US Dollar



Deal – a trade which was done at the current market price

Deficit – a negative balance of trade

Depreciation – a decline in the currency value resulting from market forces

DJIA – short for the Dow Jones Industrial Average (Also called Dow)



ECB – short for European Central Bank, the central bank of the countries that uses the Euro currency

Euro – the currency of the European Monetary Union

Expiry – the specific date and time when the option will expire

Extended – a market that is assumed to have moved too far



Federal Reserve – the Central Bank of the United States (also called Fed)

Flat – an unchanged economic data reading where the present levels remains the same as the previous level

Forex – the global currency exchange market

Forward P/E Ratio – Short for forward price to earnings ratio, it is a current stock’s price over its predicted earnings per share.

Futures – a method of trading financial instruments, commodities or currencies for a specific price and date in the future



G7 – the Group of 7 Nations (United States, United Kingdom,Germany, France, Italy, Canada and Japan)

G8 – the Group of 8 Nations (United States, United Kingdom, Germany, France, Italy, Canada, Japan and Russia)

Given – a bid being hit or selling interest

GMT – short for Greenwich Mean Time, the most commonly used time zone in forex trading

Greenback – the US dollar



Hedging – a type of strategy that is aim for reducing or off-setting huge price variations

Hoarding – acquiring money regardless if it has no value



IMF – short for the International Monetary Fund

Inflation – an increase in the value of consumer goods which affect the purchasing power



Kiwi – the NZD/USD currency pair



Liquidation – closing an open position by executing an offsetting deal

Loonie – the USD/CAD currency pair

London Session – the British trading session for forex trading (3:00 AM EST – 12:00 AM EST)

Long – purchasing more of an instrument with a belief that it will increase in value



Margin – the money deposited as security to cover any potential losses from huge price variations

Maturity – the period when a debt is due for payment

Momentum – a sequence of technical studies that evaluates the rate of price changes



New York Session – the American trading session for forex trading(8:00 AM EST – 5:00 PM EST)

Net Worth – the value of the assets that tops the liabilities



Offset – buying if one has sold or selling if one has bought

Order – to execute a trade at a specified rate



Parities – the price of a currency in terms of another

Pip – short for Price Interest Point, the smallest incremental move in floating foreign exchange rates

Pound – the GBP/USD currency pair



Rally – a recovery in price after a general declining trend

Range – the reverse of a trend where there are no changes in the prices

RBA – short for Reserve Bank of Australia, the central bank of Australia

RBNZ – short for Reserve Bank of New Zealand, the central bank of New Zealand

Resistance – the highest price that technical analysts note persistent selling of an exchange rate

Revaluation – the reverse of a devaluation where the pegged currency rises in value



Settlement – the confirmation of a deal

Shorts – traders who are bearish on the market

Spot – an immediate deal where the funds usually change hands within two days after the deal is struck

Sloppy – variable trading conditions that doesn’t show any particular trend

Swissy – the USD/CHF currency pair

SNB – short for Swiss National Bank, the central bank of Switzerland

Sterling – the GBP/USD currency pair



Technicals – short for technical analysis, a strategy where the historic price patterns are analyzed for predicting future price movements

Tokyo Session – the Japanese trading session for forex trading(7:00 PM EST – 4:00 AM EST)

Transaction – buying or selling of securities due to the the implementation of an order



Undo – reversing a transaction



Volatility – active markets that usually opens opportunities for trading



WSJ – short for Wall Street Journal



Yard – means a billion units