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Trading A-Z

Trading is a highly technical field, and jargon abounds. Those who want to learn more about the market may become despondent. Let's make it easier.

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Trading A-Z Glossary

A trader is a person who engages in the buying and selling of financial assets in any financial market, either for his or her own account or on behalf of another individual or institution.

The foreign exchange market, also known as Forex or FX, is the realm of buying and selling currencies in order to profit from currency fluctuations. There is a lot of liquidity in the forex market, which is the world's largest by far. It has more liquidity than any other market or stock market. As a result, the forex market attracts individuals of all levels of experience and skill.

An organised market in which humans and computers buy and sell shares of firms is called a stock market.

Now we have the basic actors in place, let's dig into what terminology is used in trading.

A

Abnormal Market Conditions — a fast or thin market.

Account history — A register of transactions, balance operations and cancelled orders in a customers account.

Arbitrage - The process of buying an asset (such as shares) and then immediately selling it so as to profit from the difference. Arbitrageurs can exploit tiny differences in the quoted price of an identical instrument across different markets using very large-sized trades.

Asian Session — 23:00 to 08:00 (Tokyo).

Ask — The price a seller or market-maker is willing to accept for a tradeable instrument; also known as the offer price; the price at which an open Buy position is established.

AUS200 — The symbol of the Australian Securities Exchange (ASX 200) is $, which refers to the top 200 (by market capitalisation) companies listed on the exchange.

Available Margin — Free margin is the money that you have in your account after taking out what you owe for things like margin, floating profit/loss, and rollovers.

Aussie — Oz or Ozzie is the Australian dollar's nickname, and it stands for the AUD/USD currency pair.

B

Balance — A summary of the account's total financial result, including all deposits and withdrawals made to and from it, as well as all closed positions.

Bar chart = A style of chart used in technical analysis, where the top of the vertical line represents the highest price traded in a particular instrument, and the bottom part displays the lowest price. The closing price is shown on the right side of the bar, and the opening price is shown on the left side of the bar. A single bar normally represents one day of trading.

Base Currency — The first currency in a pair of currencies (e.g. if EUR/USD rate is 1.3283 then one EUR is worth 1.3283 USD).

Base Rate — The Central Bank Rate (CBR), which is the primary interest rate set by a country's central bank, is applied to loans made in that nation. It's used by banks to determine borrowers' interest rates.

Bearish / Bear market — A downward momentum market is known as a downtrend market. (price is declining).

Bear — The term "short-seller" is a derivative of the phrase "sell short," which refers to someone who believes that prices will fall.

Basis Point — a metric that quantifies the smallest price change in a product.

Bid — The price at which a trader or a market maker is ready to purchase an instrument that has been marked for sale; the price for establishing an open Sell position.

BOC — Bank Of Canada (Canada’s central bank).

BOE — Bank Of England (UK’s central bank).

BOJ — Bank Of Japan (Japan’s central bank). Bollinger Bands® - A chart indicator used in technical analysis to measure market volatility, consisting of a single moving average and two standard deviation bands.

Broker - An individual or firm acting as an intermediary to bring together buyers and sellers, typically usually for a small commission or fee.

Bull / Bullish Market — A rising market is often referred to as a bullish trend. (price is rising).

Bull — a trader who believes prices will rise; a trader with a long position.

Bullion - Precious metals such as gold, silver, platinum or palladium in the form of bars or ingots.

Bundesbank — The German central bank, commonly known as BUBA,.

Buy Limit — a pending order for establishing an open Buy position in the customer’s account, in the event the price on the specified instrument falls to the specified level; can be only executed at the Ask price and placed below the current Ask price of the specified instrument.

Buy Position — While the market price is unchanged, buyers expect it to rise. (e.g. buying the base currency against the quote currency or buying a contract for difference on an underlying security rate).

Buy Stop — a pending order for establishing an open Buy position in the customer’s account, in the event the price on the specified instrument rises to the specified level; can be only executed at the Ask price and placed above the current Ask price of the specified instrument.

C

Cable — slang for the GBP/USD currency pair.

CAC40 — Bourse de Paris (Paris Stock Exchange); 40 stands for top 40 companies listed (by market capital).

Candlestick Chart — One of the chart views or presentations, which shows opening and closing prices in a specified time frame; If the close price is greater than the open price, it indicates that there's an imbalance between supply and demand, so you'll see more sellers at the top of a bull market than buyers. If the opposite is true for bears, then there will be greater amounts of buyers.

Capital - The wealth, either monetary or in assets, owned by an individual or company.

CBs — short for central banks.

Central Bank — A government institution that manages a country's monetary policy is known as a Central Bank.

CFD (Contract for Difference) — an object of electronic transaction based on the price fluctuation of an underlying asset (e.g. stock or futures contract).

Charting - A range of techniques that use past price charts, along with other indicators, to anticipate future price movements.

Chart — Line, bars, or candlesticks are used to represent historical quotations in a diagrammatic form.

Client Log-file — The log file is located in the MetaTrader4/Logs folder and contains all client terminal requests; it's made up of many daily files.

Client Terminal — Customer trading, monitoring customer accounts, obtaining real-time and historical quotes, news and market data in real time is a popular feature of the MetaTrader 4 (hereafter referred to as MT4) program.

Close — A selling order is an ask or a request to close a given position at the current market price.

Close By — a request or instruction for closing the two locked positions on the same instrument.

Commission — The customer's account was charged with a particular amount of service payments.

Consumer Price Index (CPI) - An index that measures changes in the price of goods and services purchased by consumers. The figure measures the average change over time in the price of a sample of various common goods and services purchased by typical urban households.

Contract — On the Forex market, it is a common unit. (e.g. 1 lot).

Contract Details — The parameters of a product specified by Global Prime for client trading and published on the website.

Contract for difference (CFD) - Contracts for difference (CFDs) are derivative products which enable you to trade on the price movement of underlying financial assets (such as indices, shares and commodities). A CFD is an agreement to exchange the difference in the value of an asset from the time the contract is opened until the time at which it is closed. With a CFD, you never actually own the asset or instrument you have chosen to trade, but you can still benefit if the market moves in your favour.

Counterparty — One of the parties in a financial transaction.

Currency Pair — A foreign exchange cross rate is a type of derivative traded on the over-the-counter market that is based on the change in value of one currency against another.

Customer — a juridical or physical person

Customer Account (Account) — the register of transactions, orders, and balance operations kept on a customer's personal system.

D

Daily charts - Charts that encapsulate the daily price movement of an instrument, for example a currency pair, index or share.

Data Feed — Quotes may be seen in Global Prime's trading platforms, which is a stream of quotations.

DAX 30 - A market capitalisation weighted index of the top 30 companies listed on the Frankfurt Stock Exchange in Germany. This is referred to as the ’Germany 30’ on our website and trading platform.

Day trading - The process of entering and closing out trades within the same day or trading session.

Deficit — negative balance for a trade or payment (i.e. not enough money).

Deposit — money deposit on account.

Demo Account — practice or paper-trading account.

Dividend Adjustment — A dividend cut, also known as a split or reduction, is an adjustment that is made to the market price of a stock when it reaches its ex-dividend date (including any special dividend).

DJIA or Dow — short for the Dow Jones Industrial Average or US30.

Dove — Lower interest rates and/or easier monetary policy are terms that imply less stringent conditions.; opposite to hawkish.

Downtrend — A downtrend in price, which is known as lower lows and lower highs,.

E

Economic driver - Change in the economy that leads to changes in the market price of investments, such as shares, commodities or property.

ECB — European Central Bank.

ECNElectronic Communication Network, The purest form of trading occurs when the buyer and seller connect directly.

Elliott wave theory - Developed by RN Elliott, the Elliott Wave theory is a method of technical analysis based on the assumption of predictability, by identifying a certain flow and structure to the price movement of financial instruments.

EST/EDT — New York City time zone (United States Eastern Standard Time/Eastern Daylight Time).

ESTX50 — short for the Euronext 50 index.

European Session — 07:00 to 16:00 (London).

Exchange - A marketplace in which securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange - such as a stock exchange - is to ensure fair and orderly trading, as well as efficient dissemination of price information for any securities trading on that exchange. Exchanges give companies, governments and other groups a platform to sell securities to the investing public.

Expiry — At the close of business on a specified day and time, you can cancel an open purchase agreement.

Expert Advisor — a software program executed by the Client Terminal for the purpose of automated trading.

Equity — a net worth of funds in the customer’s account.

Exotic pair — a less traded currency pair.

F

FED — The Federal Reserve Bank (USA central bank).

Floating Profit/Loss — Between the customer's account equity and balance, there is a gap in value.

Fill — It signifies that the order has been successfully completed.

FOMC — The Federal Open Market Committee is the Fed's policy-making body.

Foreign Exchange — The Forex market is the worldwide market for buying and selling one currency in exchange for another.

FRA40 — other name of CAC40.

FTSE 100 — short name for UK100 index.

G

G7 — a group of 7 nations including USA, Japan, Germany, UK, France, Italy and Canada.

G8 — G7 + Russia.

Gap — significant difference between the two consecutive quotes; may be shown on charts as a blank field between bars or candles when the time period between the two quotes covers the bars or candlestick’s close time.

GDP — Gross Domestic Product is the total value of all things made in a country.

H

Hawkish — It refers to a reduction in the difficulty of financial policy or an increase in interest rates.: opposite to dove.

Hedge — a combination of strategies or a position that lowers the possibility of your primary position being taken.

Hedged margin — margin requirements for maintaining locked positions.

HK40 / HKHI — short name for Hong Kong Seng Index.

I

Initial Margin (Margin) — requirement for collateral to open a position.

INX — symbol for S&P 500 index.

Instant Execution — All quotes displayed on the Client Terminal may be accepted, as per the request execution type.

J

JPN225 — short name for the NEKKEI index.

K

Kiwi — slang for the NZD/USD currency pair.

L

Leverage — transaction size/margin ratio (e.g. 1:100 leverage means the customer needs to have 1% of the transaction size in his/her account as margin).

LIBOR — The London Inter-Bank Offered Rate is a benchmark rate used by banks throughout the world to determine their rates of return on foreign lending.

London Session — 08:00 to 17:00 (London).

Long Position — when the pair’s base currency is bought, the position is deemed long.

Loonie — slang for Canadian dollar, which is also known as Funds.

Lot — a transaction size unit in MT4, where: 1 lot is equal to a contract on 100000 base currency units for currency pairs

Lot Size — an amount of base currency units or underlying asset units that is specified by a contract as a transaction size per 1 standard lot.

M

Margin — Customer's open position is maintained by keeping collateral funds equal to or less than the customer's estimated market value.

Margin Level — an equity/margin percentage ratio.

Margin Trading — A customer trading service with a levered approach, which allows clients to conduct transactions far beyond their deposit.

Market Opening — the time when instruments become available for customers to trade.

Market Order — an electronic instruction for opening a position in the customer’s account, at the current market price.

MT4 — a software platform designed for online trading

N

New York Session — 08:00am to 05:00pm (New York time)

Normal Market Conditions — the opposite of a rapid market; has no market data errors.

O

Open Position — a contract for buying or selling an instrument within the customer’s account

Order — an electronic instruction for opening or closing a position in the customer’s account on a specified instrument, in the event its price reaches the specified level.

Order Level — a price specified by the customer in the order placement request as an instruction for opening a position in his/her account, at this price and under conditions determined by the type of order.

Over The Counter (OTC) — describes any transaction that is not conducted via an exchange.

P

Pending Order — an electronic instruction for opening a position in the customer’s account

Point — a minimum price change (e.g. 0.0001 for EUR/USD); also called a Pip.

Price — a two-way quote consisting of Bid and Ask prices; a position’s opening or closing price; an order level.

Price Gap — In an event where the current Bid price is higher than the previous Ask price, and vice versa.

Q

Quote — an electronic message about the current price displayed in the Client Terminal.

R

Rapid Market — In an unpredictable market environment that is frequently characterized by rapidly fluctuating prices, which create significant differences between successive quotation values,

Rate — The base currency value in the quoted currency for a currency pair is known as the underlying asset value for a CFD; for a contract for difference, the underlying asset value is equal to the notional amount.

Request — an electronic instruction for opening or closing a position, placement, cancellation or modification of an order

S

Sell Limit — a pending order for establishing an open Sell position in the customer’s account

Sell Position — an open position, which represents expectation that the market price will decline

Sell Stop — a pending order for establishing an open Sell position in the customer’s account, in the event the price on the specified instrument falls to the specified level

Session Gap — A price difference has emerged between the first quotation of the current market session and the final quotation of the previous market session.

Slippage — a difference between the order’s price and its actual price execution.

Split Close — a partial position closing (e.g. closing 0.5 lots of 2 lots).

Spread — the difference between Bid and Ask price.

Stop Loss — an order for closing a specified open position at a specified level, in the event the price moves in an unfavourable direction

Stop Out — a compulsory closing of the customer’s open positions

SWAP — an amount of overnight adjustments paid or charged to the customer’s account at 23.59 in the platform’s time zone; it is a daily settlement for margin trading services.

Swissy — slang for the Swiss Franc.

Symbol — an object of electronic transaction (e.g. currency pair, stock CFD, futures CFD)

T

Take Profit — an order for closing a specified open position at a specified level, in the event the price moves in a favourable direction

Thin Market — Low trading activity happens when there is not much trading. It happens less than normal market conditions.

Ticket — The specific identification number of a customer's position, order, or account balance operation.

Transaction — an operation consisting of two equal counter trades in a specified instrument.

Transaction Size — lot size multiplied by the amount of lots.

U

UK100 — short name for the FTSE 100 index.

UKOIL — short name for Brent Crude Oil.

U-Shaped Recovery — a chart shape showing a gradual price rise back to its previous peak, after gradual decline.

Uptick — a new price quote, at a price higher than the previous quote.

US30 — short name for the Dow Jones index.

US OIL — short name for WTI Crude Oil.

V

Value date — the day on which counterparts to a financial transaction agree to determine the price of a product

V-Shaped Recovery — a chart shape showing recovery that involves a sharp rise to a previous peak, after a sharp decline.

Volatility — measure for fluctuation of price of a financial instrument over time

W

W-Shaped Recovery — a chart shape showing a change of sharp decline, rise, decline and ending with another sharp rise; the middle part of the shape can be lower than two price peaks on each side.

Whipsaw — slang for a very high volatility market

Working order — Stop or Limit orders that have been placed but not filled yet.

X

XAG/USD — symbol for the Silver Index.

XAU/USD — symbol for the Gold Index.

Y

Year Over Year (YOY) — any measurable event that recurs annually

Yield — The income return on an investment is a percentage of the invested amount.

Z

Zero-Coupon Government Bonds — Government bonds that are purchased at a deep discount and pay no cash dividend.

Zeta — The percentage change in an options price per 1% change in implied volatility.

Zigzag — In a bull market, there is an Elliott three-wave pattern that divides into a 5-3-5 formation with the top of wave B significantly lower than the start of wave A. This pattern will be turned upside down in a bear market.

Your questions, answered.

What does ECN mean? Right Arrow

Electronic Communications Networks or ‘ECNs’ are off-exchange execution venues which allow market participants to trade with a range of counterparties anonymously. They are the main trading venues for OTC markets such as Foreign Exchange and Metals.

This basically means ECNs provide the technology and venue for price makers aka ‘liquidity providers’ to distribute their liquidity. Price takers (traders) can see these prices and execute trades against them. The ECN is therefore responsible for prices/quotes and the execution of orders.

See our ECN page for a detailed overview of the Global Prime ECN offering.

What account types does Global Prime offer? Right Arrow

Global Prime keeps it simple with one account type - The ECN Account. It features the following:

  • ECN ‘Best Execution’ with execution 26+ liquidity providers
  • Execution speeds from as low as 1ms
  • Commission is $7 per lot round turn
  • No minimum deposit
  • Spreads are super tight and variable
  • Automated trade receipts for the ultimate transparency
What are the fees and charges for trading with Global Prime? Right Arrow
  • We make money from commissions, spreads, swaps and interest
  • Commissions from start at $7 per lot traded round trip (FX & metals only)
  • Swap and interest can be earned or charged if your positions are held past the close of the underlying market (17:00 NY time ET/EST)
  • There are no fees for funding or withdrawing from our end however, your bank may charge intermediary bank fees or conversion charges, it is recommended to check with your bank to ascertain this prior to funding
  • Find more information here
What is the minimum amount needed to open a trading account? Right Arrow
  • There is no minimum starting balance however, we recommend no less than 200 AUD or the equivalent in another currency
Is Global Prime an ECN broker? Right Arrow

Global Prime offers a true ECN experience. We can prove this on everyone of your trades with automated trade receipts. These show the bank who filled your trade. Find more information here.

Does Global Prime profit from your losses? Right Arrow

All client trades, and therefore market risk, is passed on to Global Primes liquidity providers. Our A-book model means that your trades are not internalised, rather they are filled by our liquidity providers. This means we do not profit from your trading losses.

How can we verify this? The transparency provided by our world's first ‘automated trade receipts’ enable clients to query vital trade information on every trade, directly from within the client portal. This feature enables you to see the full order book at the time of your trade as well as which liquidity provider filled your trade.

Are scalping, hedging, EAs and HFT allowed? Right Arrow

All strategies are welcome at Global Prime. We don’t have restrictions on trading and we don’t interfere with your trades. We do however stress the importance of risk management and will generally only ever contact a trader when their risk is too high.

Benefits of World Class Trading

Tight Spreads

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Liquidity

Deep liquidity through ECNs and dark pools. Get the ECN advantage.

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Range of Markets

Get access to the world's most liquid markets. Trade 24 hours a day.

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  • Feel like an insider when you trade

No Restrictions

We've got you covered: technical, fundamental, news, and EA friendly.

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  • Get the best prices in the market
  • Get what you want, when you want it

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