Trading Defined

A trading dictionary

Understand trading. One concept at a time.

A trading dictionary designed to make even the most complex market concepts simple to understand — explained in plain words first, then step by step, with real numbers.

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560 full articles130 more terms defined16 categories

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All 560 articles and 690 terms →
No. 01

Short Selling

Short selling means selling something you have borrowed, hoping to buy it back later for less and keep the difference.

Trading BasicsBeginner12 min read
No. 02

Long Position

A long position means you own an asset — or a contract that behaves like owning it — because you expect its price to rise.

Trading BasicsBeginner10 min read
No. 03

Stop Loss

A stop loss is an exit you set in advance — usually an order — that closes a losing trade automatically once the price reaches a level you chose.

Risk ManagementBeginner11 min read
No. 04

Leverage

Leverage means controlling a position larger than your own money — through borrowing or a contract that needs only a deposit — so that gains and losses are both multiplied.

Risk ManagementIntermediate9 min read
No. 05

Trading Chart

A trading chart is a picture of an asset's price history, with time running from left to right and price from bottom to top.

Technical AnalysisBeginner10 min read
No. 06

Position Sizing

Position sizing is deciding how many shares, contracts or coins to trade so that, if your stop is hit, you lose only an amount you chose in advance.

Risk ManagementBeginner8 min read

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Before your first trade. The minimum you should understand before placing a real order: how to read a chart, what a position is, and how to cap a loss.

  1. Trading Chart

    Every decision starts with reading price history correctly.

  2. Candlestick

    The building block of almost every chart you will see.

  3. Position

    What it means to hold, open and close a position.

  4. Long Position

    The simplest position: buying because you expect a rise.

  5. Market Order

    How to buy immediately — and what you give up for speed.

  6. Limit Order

    How to buy only at a price you choose.

  7. Stop Loss

    How to define the loss you are willing to accept.

  8. Position Sizing

    How to make sure one bad trade cannot hurt you badly.

  9. Profit and Loss

    How to work out what a trade really made, after costs.

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Beginner terms, in brief

  • Stock

    A stock, or share, is a unit of ownership in a company. Shareholders own a slice of the business, can profit when its value rises and may receive dividends, and common shares usually come with voting rights.

  • Bond

    A bond is a loan to a government or company. The issuer usually pays regular interest (the coupon) and repays the face value at maturity. Bond prices move opposite to interest rates: when yields rise, existing bonds lose value.

  • Forex Market

    The forex market is the global market for exchanging currencies, and the largest financial market by trading volume. It has no central exchange, trades around the clock from Monday to Friday, and quotes currencies in pairs such as EUR/USD.

  • Commodities

    Commodities are raw materials traded in bulk: energy such as oil and gas, metals such as gold and copper, and farm products such as wheat and coffee. Traders mostly reach them through futures contracts, ETFs or CFDs rather than physical delivery.

  • Stock Market Index

    A stock market index tracks the combined price of a group of shares, such as the S&P 500 (about 500 large US companies), the Dow Jones Industrial Average (30 companies) or the Nasdaq Composite. You cannot buy an index itself, only funds, futures or CFDs that follow it.

  • Gold and Safe-Haven Assets

    Safe-haven assets are ones investors buy when markets are in turmoil because they expect them to hold their value — classically gold, US Treasuries, the Swiss franc and the Japanese yen. They often, but not always, rise when stocks fall.

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  1. 01Trading Basics49 terms
  2. 02Market Structure54 terms
  3. 03Technical Analysis47 terms
  4. 04Price Action50 terms
  5. 05Risk Management54 terms
  6. 06Trading Psychology and Performance55 terms
  7. 07Order Types12 terms
  8. 08Derivatives37 terms
  9. 09Cryptocurrency and Blockchain75 terms
  10. 10Fundamentals and Macroeconomics103 terms
  11. 11Trading Strategies37 terms
  12. 12Indicators and Tools38 terms
  13. 13Bonds and Interest Rates32 terms
  14. 14Commodities, Energy and Carbon18 terms
  15. 15Accounting, Tax and Operations20 terms
  16. 16Market Language and Slang9 terms

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