Trading Lingo! Bulls, bears, and lions– the animal kingdom of the trading world.

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Confused about trading language? Have no fear. Trading Lingo is here!

Trading Lingo is the original online trading glossary that we made exclusively for you, beginner traders. Learn your way to success!

A

Asset

An asset is anything you own that you believe will make you money in the future.

In trading, the term asset is related to what is being traded on markets, such as stocks, bonds, currencies, or commodities.

They are also referred to as “financial assets “.

Ask

The term is used when one trader has an intention to buy an asset from another trader or institution.

The ask price represents the price at which you can buy an asset, and as such will usually be higher than the market price.

B

Bid

The bid is the amount that your broker is willing to pay to buy a financial instrument.

Bids usually consist of two elements:

1.The price which the buyer is willing to pay.

2. The quantity of the financial instrument they want to purchase.

Bull

A bull is a trader who believes that prices will rise.

It is the opposite of bears, who take a pessimistic approach to a market’s direction.

Bull Market

A bull market is a market characterized by rising prices. It is usually used when the price of an asset rises 20% or more from its previous low point.

Bear

Bears are traders who believe that a market or asset is going down.

They take an opposite view to bulls, who believe that a market is going to head upwards.

C

Currency Pairs

A currency pair is a price estimation of the exchange rate for two different currencies traded in the foreign exchange market. (Forex)

When you trade in the forex market, you buy or sell in currency pairs.

For example, in the USD/CAD pair, you are buying the U.S. dollar by selling the Canadian dollar.

The first currency in a pair is called the base currency, and the second currency is called the quote currency.

Let’s take as an example currency pair “EUR/USD”, EUR is the base currency and USD is the quote currency.

The price of a currency pair represents how much one unit of the base currency is worth in the quote currency.

If EUR/USD is trading at 1.0950, then one euro is worth 1.0950 U.S. dollars.

When the euro rises against the dollar, the currency pair’s price will increase. In this case, you buy the pair. (go long)

If the euro declines against the dollar, the pair’s price will fall. If you think it will weaken, you go short(“sell the pair”).

D

Day Trading

A type of trading strategy that involves opening and closing a position on the same day. Day traders trade on very short-term market movements.

D

Deflation

Deflation is an economic trend involving a decline in the price of a group of goods and services. in a country or region.

It usually happens when the annual inflation rate becomes negative and falls below 0%. Such an event is caused by a decrease in the money supply and/or credit.  

14 COMMENTS

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