As a novice trader, of course, you must know the terms in trading. Basically, ordinary people, even though they read a lot of news or graphics, of course, need more time to be able to understand terms we rarely hear.
If you are already proficient with terms in trading, then you will quickly master the market situation and join the trading market. Before starting trading, there are 20 terms that need to be understood. What are the terms in trading that you need to know? Here’s the explanation.
Know the Terms in trading
Bearish Market is a market trend that tends to be declining.
The Black Swan is known for an important event that can change the world economy. One of them, during the events of 9/11 in America or the tragedy of the assassination of a general in Iraq named Qasim Soleimani in January 2020. During his lifetime, Qasim was known as the most influential general in Iraq.
Qasim is known to have made world markets chaotic at that time because many predicted the magnitude of the potential for a third world war to break out.
The term in this one trading is the level of trading that will move from a profit to a loss condition. Sometimes it is also used to stop the market activity.
Get to know the term in the next trading, namely the Candlestick Chart. The term is a Japanese version of the price information chart in which you have to fill in the space between the open and close prices on the bars.
Because these charts can make it easier to identify price patterns from the ups and downs of the market.
Cross Rate is the exchange rate of a currency between one of many currencies that is not used as a benchmark by the standard of the country being traded. For example, when you are in Indonesia then decide to trade with other currencies such as CAD-JPY.
Day Trading is a position from certain financial transactions that are opened and closed on the same day (not 24 hours).
The term Equity is the sum of the resulting funds available on your account, such as (balance+amount of profit/loss).
The next term in trading is Leverage or what is known as “margin,” but in Indonesia, it is better known as leverage. Leverage is a ratio that has an advantage in trading on forex.
For example, if the leverage you set is 1,200, then enough with a capital of $ 5000, customers can make gold transactions at a price of 200x dollars.
The term in the next trading is Hedge, which is a position taken to reduce the risk of loss.
A term is a form of investment asset that can be turned into cash in a fast time.
Margin is a term in trading that requires capital as a form of guarantee in transactions.
Another trading term, namely Lot. A lot is a unit in agreed trading. For example, as much as one lot of gold.
The term Open Position that you need to know is an active transaction. Changes in the exchange rate for pairs that are open means that there will also be changes in profit/loss.
The term Margin Call is a request from a broker/broker to add a deposit. The goal is that the positions that have been filled are not liquidated due to the reason that the margin has run out.
The term in trading regarding Brokers, namely a company that becomes a distributor of investors on an investment basis. Because everyone has to become a customer of an official brokerage firm before entering the market.
Safe Haven is a term in trading which means the safest investment when the market is volatile. Usually, investors will choose gold as their safe haven because gold is global and not tied to one particular currency.
The term Spread is the difference of pips for open positions at buying and selling prices. That is, the smaller the spread, the more profitable investors will be in order to reach the break-even point (BEP). This of course does not require large price movements.
The term swap is usually used in trading to refer to the currency of the simultaneous transaction of a certain amount. It is a currency whose level is determined later.
Another term in trading, namely Volatility which refers to a statistical method that measures market movements over a certain period of time. For example, high volatility is a price that moves up and down very quickly.
The term in the latest trading, namely Sterling, means pound sterling.
Those are the terms in trading that you need to understand before jumping into the world of trading. Even though you are good at analyzing, if you don’t understand the term, it’s the same as wasting the money you have.