publish2017-08-26 4:42 pm

 Trading Terminology – Vocabulary Tips

trading terminology

Our society has created different specialized fields with their terminology and language, trading and finances are not exceptions to this, and therefore, you need to learn the basic vocabulary to be able to understand the articles, reviews, and financial or investing advice.

Broker: a person (or company) who buys or sells  assets for a fee, in the stock market is the person (or company) who buys or sells your stocks or binary options.

Candlestick: is a bar that represents the financial data of an asset graphically.

Candlestick Chart: is a graphical representation, or a price chart of an asset composes of bars called candlestick.

Price charts: is the graphical representation of the opening and closing price of an asset for a period.

Reverse trend: is the change or switch in the price moving direction of an asset or a price trend or a trend trading

Trade trending: is when the asset’s price follows the same direction for some consecutive periods.

Bearish market: is when the asset’s price fall down or decrease, the market lost its speed, and it is called bear because the bear hibernates for the winter.

Bullish market: is when the asset’s prices increase or soars. The market gain momentum and strengths. It is called bull because the bull will run until it reaches the mountaintop.

Reverse trend: is the change or switch in the price moving direction of an asset or a price trend or a trend trading

Divergence: is switch in the price moving direction

Trendlines are analytical tools and instruments to recognize the market patterns, which are drawn by three lines on a price. They deliver a massive amount of information in just seconds. An upper line called resistance line. A middle line called average price. Finally, a lower line called supporting line

Resistance line: Is the upper line on a price chart with trend lines on it. It is the graphical representation of a price point or nominal value at which the asset has not reached or get above it for a period

Supporting line: Is the lower line on a price chart with trend lines on it. It is the graphical representation of a price point or nominal value at which the asset has not reached or falls below it for a period

Buy a call or Call options: is purchasing a binary option in which you anticipate the price will increase at its maturity time.

Buy a put or Put options: is purchasing a binary option in which you anticipate the price will decrease at its maturity time.

Maturity is the time or date when the binary options or the financial instrument will end, similar to the expiration time.

In the money: is when your option final value is equal as you anticipated it. The price is higher if you buy a call or the price is lower if you buy a put

Out the money: is when your options final value is contrary to what you anticipated.

Forex options are binary options based on the exchange rate of two currencies.

Technical analysis is the evaluation of assets using the recorded price, the transaction volume, indicators, and charts to identify any pattern and recognized the next asset’s price moving direction. The technical analysis requires some financial tools to do a quantitative study of the asset.

Fundamental analysis is the evaluation of the assets economic, financial, and market situation base on qualitative methods and the historical market response to calculate the asset’s value

The easiest way to learn this new terminology is practicing; please read our other articles each one of them has an easy way to understand their meaning and offers some clues for the faster memorization.

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