Trading Terms

Beginner

In this video and complementary article, we are looking at some basic trading term used in financial markets trading.

 

  • Buy and Sell
  • Long and Short
  • Bull and Bear/ Bullish and Bearish
  • Risk On and Risk Off

Buy and Sell/ Long and Short

  • As a trader, if we think a market or asset is going to go UP in price, we would BUY.
  • If this BUY is done to enter a new open position, this is called going LONG.

go long

 

  • As a trader, if we think a market or asset is going to go DOWN in price, we would SELL.
  • If this SELL is done to enter a new open position, this is called going SHORT.

go short

  • If we have already SOLD and are SHORT a market, then if we BUY we are COVERING A SHORT, to then have a neutral position.

buy cover

  • If we have already BOUGHT and are LONG a market, then if we SELL we are COVERING A LONG, to then have a neutral position.

sell cover

Bull and Bear/ Bullish and Bearish

 

  • If as a trader or investor we believe that a market is going to rise in price we are described as a BULL, as being BULLISH.

bull

  • If as a trader or investor we believe that a market is going to fall in price we are describes as a BEAR, as being BEARISH.

bear

Risk On and Risk Off

 

Risk On

  • A scenario whereby there is a positive outlook for the economy in question (or the global economy).
  • Traders and investors are willing to take more risk, they have a healthier, higher risk appetite.
  • Traders and investors tend to BUY, go LONG of more risky assets (like equities, which are stocks and shares).
  • Traders and investors tend to SELL, go SHORT of less risky assets or safe havens (like Government Bonds).

 

Risk Off

  • A scenario whereby there is a negative outlook for the economy in question (or the global economy).
  • Traders and investors are LESS willing to take risk, they have lower risk appetite.
  • Traders and investors tend to SELL, go SHORT of more risky assets (like equities, which are stocks and shares).
  • Traders and investors tend to BUY, go LONG of less risky assets or safe havens (like Government Bonds).

 

Please comment below

Your email address will not be published. Required fields are marked *


Latest News

The Forex Zone
The Forex Zone – Erratic activity as trade tensions send mixed signals

Here in The Forex Zone we review the day trade views for most the major Forex currencies in a volatile week for FX markets amid ongoing trade concerns and inverting yield curves. Again, we spotlight the significant levels to watch and the directional biases for the key Forex pairs; EURUSD, GBPUSD, USDCAD, AUDUSD, NZDUSD and … Continued

Dax index monthly
Dax weekly report 20190815

Dax retests & holds the low so far at 11435. A break lower targets 11400/380, 11320/300 & below 11280 risks a slide as far as support at 11180/170. Bulls need a double bottom at 11435/425 to trigger a recovery targeting 11485/495 & first resistance at 11520/530. If we continue higher look for 11580/590 & minor … Continued

4 Hour EURO STOXX 50 Future Chart
US yield curve inversion sees global stocks resume bear theme

An inversion of the US Treasury 2-10yr yield curve on Wednesday was the first such occurrence since 2007. This sent negative shock waves through global financial markets, as an inversion of this segment of the yield curve is often a signal of a future resurrection in the US. Furthermore, the US 30yr Bond moved to … Continued

AUDNZD 1 hour chart 2019-08-15
AUDNZD and EURNZD Both Stopping for A Pullback!

AUDNZD unfolded five legs within wave a, which can be part of a bigger, bullish reversal. Completed five legs within a trend indicate a three-wave retracement to follow, which is already the case on AUDNZD; an a)-b)-c) pullback to around 1.043/1.039 region, where bulls may again take over. A later rise in impulsive fashion would … Continued


Forex Brokers in your location