📖Glossary
Asset
An asset is like a stock, a currency, a crypto, or bond. It is something that can be bought or sold on public exchanges through a broker. It is something that can go up in value as well as down.
Price
The price of an asset dictated by the market. There are two prices. Bid and Ask.
Bid
The price at which you enter a buy position or the price at which you exit a sell position.
Ask
The price at which you enter a sell position or the price at which you exit a buy position.
Spread
The difference between Ask and Bid, usually the broker’s fee for the transaction. The lower the spread, the better. The better the broker, the lower the spreads.
Pip
Price Incremented Point. The last decimal point on a price to reflect its movement up or down. 1 pip in JPY assets is usually when the price shifts by 0.01 whereas 1 pip in USD assets is usually when the price shifts by 0.0001.
Market Hours
The times the market is open and ready for buyers and sellers to open new positions or close existing ones. The FX market is 24 hours a day between around Sunday 10pm till Friday 10pm. Other exchanges like the US, UK, Asia and Australian stock exchange are different.
Buy
While you are buying an asset, your balance will increase as the price of the asset increases. Your balance will decrease as the price of the asset decreases.
Sell
While you are selling an asset, your balance will increase as the price of the asset decreases. Your balance will decrease as the price of the asset increases.
Buy-Limit
This is a pending order that will trigger a buy trade on an asset when its price reaches or goes below your ‘limit’ price
Buy-Stop
This is a pending order that will trigger a buy trade on an asset when its price reaches or goes above your ‘limit’ price
Sell-Limit
This is a pending order that will trigger a sell trade on an asset when its price reaches or goes above your ‘limit’ price
Sell-Stop
This is a pending order that will trigger a sell trade on an asset when its price reaches or goes below your ‘limit’ price
Stop Loss (SL)
A price of an asset being traded that triggers it to close when it has gone against you.
Take Profit (TP)
A price of an asset being traded that triggers it to close when it has gone in your favour.
Candlestick
A charting-type that contains the OHLC (Open price, Highest price, Lowest price, Close price) of a price movement on a timeframe
Timeframe
The gap of time between each point to map a chart for an asset. These are the standard:
M1: 1 minute
M5: 5 minutes
M15: 15 minutes
M30: 30 minutes
H1: 1 hour
H4: 4 hours
D1: 1 day
W1: 1 week
M1: 1 month
Order Type
There are six order types:
Buy
Sell
Buy Limit
Sell Limit
Buy Stop
Sell Stop
Broker
A third-party who passes your trades through to the market. They have access to banks and exchanges and are contractually responsible for connecting a buyers with seller and vice versa, in exchange for a fee. This fee is usually added to the spread.
Trade Ticket
A unique numerical ID given to a trade by the broker as a reference.
MetaTrader
Or MT4. The most popular trading platform in the world provided by MetaQuotes. MT5 has been around for over 10 years and the retail market has refused to make the transition.
Open Time
The time a trade is opened. Using MT4 as a platform means this is rarely in UTC.
Open Price
The price at which a trade is opened (in reference to a trade). The price at which an asset is trading at, from the start of the trading session.
Close Time
The time a trade is closed. Using MT4 as a platform means this is rarely in UTC.
Close Price
The price at which a trade is closed(in reference to a trade). The price at which an asset is trading at, from the end of the trading session.
PnL Pips
The profit of a trade defined in pips.
PnL Cash
The profit of a trade defined in real money from the trading account.
Hedging
Hedging is the protection of an exposure you might have. If you bet 50 on Red then 25 on Black you have just hedged yourself by 50%. If you bet 50 on Red and 50 on Black you are completely hedged (meaning you will always break even).
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