Algorithmic Trading: A method of executing trades using automated pre-programmed trading instructions accounting for variables such as time, price, and volume.

Ask Price: The minimum price that a seller is willing to accept for a security.

Backtesting: The process of testing a trading strategy on prior time periods.

Bear Market: A market condition in which the prices of securities are falling, encouraging selling.

Bid Price: The maximum price that a buyer is willing to pay for a security.

Bull Market: A market condition in which the prices of securities are rising, encouraging buying.

Candlestick Chart: A type of price chart that displays the high, low, open, and closing prices of a security for a specific period.

Day Trading: The buying and selling of a security within a single trading day.

Diversification: A risk management strategy that mixes a wide variety of investments within a portfolio.

Dividend: A portion of a company’s earnings that is paid to shareholders, or the holders of that company’s stocks.

Equity: A stock or any other security representing an ownership interest.

Exchange-Traded Fund (ETF): A type of investment fund and exchange-traded product, with shares that are tradable on a stock exchange.

Forex: A global marketplace for exchanging national currencies against one another.

Fundamental Analysis: A method of evaluating a security that involves attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors.

Futures Contract: A legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.

Indicator: Data points that are used to predict changes in economic trends or securities.

Leverage: The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.

Limit Order: A take-profit order placed with a broker to buy or sell once the stock reaches a certain price.

Long Position: A security which is bought with the expectation that the asset will rise in value.

Margin: The money borrowed from a broker to purchase an investment and is the difference between the total value of investment and the loan amount.

Market Order: An order to buy or sell a security at the best available price.

Moving Average (MA): A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random price fluctuations.

Options: Contracts that give the bearer the right, but not the obligation, to either buy or sell an amount of some underlying asset at a pre-determined price at or before the contract expires.

Pip: A small measure of change in a currency pair in the forex market. It can be measured in terms of the quote or in terms of the underlying currency.

Portfolio: A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, as well as their fund counterparts.

Risk Management: The process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions.

Scalping: A trading strategy that attempts to profit from small price changes.

Short Selling: An investment or trading strategy that speculates on the decline in a stock or other securities price.

Spread: The difference between the buy (ask) and sell (bid) price of a security or asset.

Stop Loss Order: An order placed with a broker to sell a security when it reaches a certain price. It is designed to limit an investor’s loss on a security position.

Support and Resistance Levels: The price levels at which a given security tends to stop and reverse. Support is the price level at which demand is strong enough to prevent the price from falling further, while resistance is the price level at which selling is strong enough to prevent the price from rising further.

Swing Trading: A style of trading that attempts to capture gains in a stock within one to four days.

Technical Analysis: A trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume.

Trading Plan: A systematic method for identifying and trading securities that takes into consideration a number of variables including time, risk, and the investor’s objectives.

Trading Platform: A software through which investors and traders can open, close, and manage market positions through a financial intermediary.

Trading Signal: A trigger for action, either to buy or sell a security or other asset, generated by a thorough analysis of the asset’s price history.

Trading Strategy: A set of rules that guide a trader’s decisions on when and how to trade. Strategies can be based on technical analysis, fundamental analysis, quantitative analysis, and a range of other factors.

Trading Volume: The quantity of shares or contracts traded in a security or an entire market during a given period.

Trend: The general direction the market is taking during a specified period of time.

Volatility: A statistical measure of the dispersion of returns for a given security or market index.

Yield: The income return on an investment, such as the interest or dividends received from holding a particular security.

Zero-Sum Game: In trading, a situation in which one participant’s gains result only from another’s equivalent losses. The net change in total wealth among participants is zero; the wealth is just shifted from one to another.