Ask
This is the current market price of an asset at which the market will sell. Prices are quoted two-way as Bid/Ask. The Ask price is also known as the Offer. In CFD trading, the Ask price represents the price at which a trader can buy the contract. For example, in the quote for GOLD is 1250/1252 the product quoted is GOLD and the Ask price is 1252 for one unit of the underlying asset.
Asset
A stock, commodity, currency, or index.
Asset Index
This is a list of all our underlying assets with definitions regarding as to what each asset is. To find out about our underlying assets, look at the asset index here.
Bar Chart
This is one of the most popular types of financial charts. Each bar on a chart represents the open, high, low and close for that time period displayed as a bar. This type of chart is sometimes referred to an OHLC.
Bid
The bid price is associated with the Ask price. Every asset traded is quotes in a bid/ask content. The bid price is the price you can sell a product for. the Bid also represents the price at which a trader can sell the product. Refer to spreads for more information.
Bull Market
Bullish or bull market is the positive side of the market or an asset, when things are expected to climb and remain positive.
Buy Order
When the trader has chosen the upward direction for an asset price by expiry.
Candlestick
This is one of the oldest charting methods as well as a trading system. Japanese candlesticks were developed by rice traders in the 1700’s. A candlestick is drawn on a financial chart to represent the movement of an asset in a specific time period. The wicks denote the highs and the lows and the body of the candle shows the move between the open and the close. Candlesticks are colored in bullish and bearish color codes depend if the price moved up from the open to the close or declined from the open to the close. There are over 32 distinct candlestick patterns and offer great trading insights
Chart
For each asset, you can plot a chart of price movements over a specific time period. This is an important tool, allowing traders to analyze historical prices and forecast future activity. A chart is a picture of image of price movements. Patterns develop on charts which help traders understand market movement and trader psychology.
Close
Close means the end of a trading period, In the share market it is the end of the trading day but in Forex which traders 24 hours a day, can be the end of a time period (such as at trade rollover) or the end of day at midnight.
Close is also what you do when you want to end your position. The process of stopping (closing) a real trade by executing a trade that is the exact opposite of the open trade.
Commodities
Commodities are marketable good or service that are produced to meet a demand, whether that be a want or a need. Commodities are also interchangeable with others of the same type. In the financial markets commodities refer to energy, metals, agricultural, and more. Speculators buy and sell commodities but usually do not ever take delivery.
Contract
In the commodities market traders invest in contracts for assets, this is needed to keep the assets standardized and make speculating easier. In the context of CFD the contract is the definition of the asset being traded and the rules and specifications for that asset trade.
Contract For Difference (CFD)
A CFD is an investment style that defines a type of derivative that gives exposure to the change in value of an underlying asset. CFDs allows traders to leverage their capital and provides all the benefits of trading securities, without actually owning the product. Refer to gearing or leverage for more information. CFDs or contract for difference is one of the fastest growing investment vehicles in the world and are regulated by the financial conduct authorities. (ASIC)
Currency
One of the 4 types of underlying assets. Currencies are always in pairs. The three types of pairs are: major, minor, and exotic. Examples include EUR/USD, USD/CAD, and more.
Demo
In most cases a demo account is a risk free trading account that uses demo money, not real money and allows a trader to test the platform and learn to understand how to execute a trade. Demo accounts are also used by experienced traders to back test strategy and to develop new strategies in a risk free environment.
Expiry Price
The time and day at which your CFD will be closed and settled automatically, i.e. the end of the contract period. If you want to extend your position you can specify that you want it to rollover. There is no expiry date/time if your position is a Rolling Contract. Most CFD contracts do not have an expiry unless designed or requested.
Forex (FX, Foreign Exchange)
Forex, Fx or the foreign exchange market is the buying and selling of currencies issued by governments around the globe and processed via central banks. The forex market is an over the counter market consisting of computers around the globe the facilitate transactions. An estimated $7 billion per day is traded through this marketplace.
Gap
Where a market moves directly from one correctly quoted price to another, significantly different, correctly quoted price.
There can be many reasons for gapping: economic figures; company announcements; political events; natural disasters etc but the effect is that any fill on a stop loss, limit or new order may be at a different level from that requested by the trader.
Gross Domestic Product
The total value of goods and services produced within the borders of the United States, regardless of who owns the assets or the nationality of the labor used in producing that output. The growth of output is measured in real terms, meaning increases in output due to inflation have been removed.
Hedge Funds
Hedge funds are managed portfolios aimed to generate high returns by using aggressive investment strategies. Hedge funds, despite the misleading name, aims to get the biggest bang for an investor’s money. It engages in practically any investment instrument in the foreign exchange market, from spot to futures to swaps.
Index
Investopedia defines an index as a statistical measure of the changes in a portfolio of stocks representing a portion of the overall market. The DAX, the ASX200 and the Dow Jones are examples of indices. It’s important to note that an index is nothing more than a list of stocks; anybody can create one.
Investment
The action or process of investing money in the economic market.
Japanese Yen
The currency of Japan. One of the major currencies traded. Currency code (JPY)
Key Pair
In public key cryptography, a key pair is a pair of private key(s) and public key(s) that are mathematically linked to each other. Public keys are used to encrypt data, and the private key of the key pair is used to decrypt that data. This is known as asymmetric encryption. Key pairs are used to control access to your cryptocurrency.
Leverage
This is one of the most important concepts a trader needs to understand and is the backbone of CFD and forex trading. Leverage allows a trader to amplify their investment by only have to put up a small percentage of the value of the trade. The money needed to secure a trade is referred to margin. For example, when you open a position with a value of $10,000 by putting down a margin deposit of $1000 you have a gearing ratio of 10:1. Also known as leverage.
Limit Order
Understanding the types of market orders is crucial when trading. A Limit order is an order to close your position should the market rise to a specified price. It can be also called a take profit. You can use a limit order to take your profit on a position automatically when the price reaches your specified target. This is the other side of a stop loss which protect you from losing your shirt.
Long-term
This is a type of investment that looks at making trades that will stay open over a number of days. These positions may have an expiry time of weeks or even months.
Margin Call
A demand for additional funds to cover open trade positions.
Market Order
An order to make a transaction at the current market price.
Moving Average
The average of prices over a given time. Can be used as a trading tool.
Nonfarm Payroll Employment
An estimate of the number of payroll jobs at all nonfarm business establishments and government agencies. Information is also provided on the unemployment rate, average number of hours worked per week, and average hourly and weekly earnings. Nonfarm Payroll numbers are included in the monthly Employment Situation report.
Open
In finance, there are two definitions of open, it is when a market opens each day or time segment but it is also when you buy or sell an asset or open your CFD position.
Oscillator
Oscillators are a technical analysis tool which denotes overbought and oversold conditions in the market. Some of the most well-known oscillators are RSI, Stochastics and MACD.
Pip
Pips are the smallest unit of movement of an asset. A pip originated in the forex market and is also used in the price of a CFD. Pips refer to digits added to or subtracted from the fourth decimal place. One unit of the price is known as a point. Your profit/loss is determined by the change in points times your unit you have traded.
Quote Currency
The second currency in a currency pair. Also known as the Counter currency
Resistance
An estimated price level at which people will sell.
Reward-To-Risk Ratio
The reward-to-risk ratio measures a trade’s expected returns against its predetermined risk of loss. The ratio is computed by dividing the profit that a trade is expected to yield by the loss that the trade may incur.
Sell Order
When the trader has chosen a downward direction for the asset price.
Short
Is the opposite of long, it means selling an asset or a falling market. An investment position that benefits from a fall in market price. When the base currency in the pair is sold, the position is said to be short. You are hoping that the market falls.
Slippage
This is the difference between the price that was requested and the price obtained typically due to changing market conditions. Assets move continuously and the price shown on the platform is up to the moment but the price when you book a trade could have changed slightly as it takes just a few seconds for you to enter and complete a trade while the market never sits still.
Spread
The spread is the difference between the ASK and the BID price of an asset. All assets are quoted in a BID/ASK scenario. To better understand look up bid and ask in the glossary. The spread is small but can eat into your profits or magnify your losses as you must execute two sides of a trade to open and then close a position. Spreads for the most commonly traded assets are relatively small.
Stocks
One of the four types of underlying assets. Stocks refer to shares of a company that people can purchase. Companies like Apple, Sony, Disney, and more are all commonly traded companies on the stock market.
Stop-Loss
This is a crucial step in executing a trade to protect from unexpected negative market moves and is part of your risk managed strategy. A stop-loss is a computer command entered when you are executing your trade that instructs the platform to close your position is the market moves against you. You set the level and you can change this setting when you wish. It will protect you from unexpected headlines and panic in the marketplace.
Strike Price
The price that the market is at when an option is opened.
Trading Alerts
Trading alerts, also known as signals, are alerts that give suggestions to the traders as to what underlying asset and direction could be profitable to open a position on.
Unemployment Rate
The unemployment rate is basically the percentage of the people in the work force without jobs but is able and willing to work. It is measured by getting the ratio of unemployed people who are willing and able to work versus the total number of people in the work force.
Volatility
A measure of the amount by which an asset price is expected to fluctuate over a given period. Normally measured by the annual standard deviation of daily price changes (historic). Can also be implied from futures/options pricing, which is referred to as implied volatility.
World Bank
The World Bank is a group of international financial organizations around the globe aimed provide assistance to its 187 member countries. The World Bank was formed after World War II to help devastated Western European countries and provide them with capital.
Yield
Yield is the return on an investment and is usually expressed as a percentage.
Zig Zag Indicator
A ZigZag is a technical indicator which is usually used when analysing price fluctuations on a graph with the aim of uncovering previous substantial changes in the trend. By using the ZigZag indicator, traders can often make out Elliot waves.