GLOSSARY

Scalping

Scalping is the practice of trading at short term intervals. Traders who employ scalping strategies will typically enter and exit a market multiple times in order to take advantage of very small price swings. This can be done manually, or through the use of trading algorithms that have been programmed to repeatedly buy and sell when certain conditions are met.

Sentiment

Sentiment can be described as the collective feeling of all participants trading in a security, market or an entire economy. Sentiment is often described as being “bullish” or “bearish”, depending on whether it is positive or negative, respectively.

Sentiment Indicator

Sentiment indicators differ from conventional economic indicators in that they are determined by survey results rather than economic statistics. This class of economic indicator is informed by the attitudes of certain key groups such as consumers and purchasing managers.

Share

Also known as stock or equity, a share is a type of security that entitles the owner to a small fraction of a publicly listed company, as well as a piece of its earnings in the form of a dividend. Shares are publicly traded on exchanges and also as CFD contracts that allow traders to speculate on a share’s fluctuating price without taking possession of it.

Short Position

A short position, also known as “going short” or “shorting” is the act of selling an asset under the assumption that it is due to fall in value. A simple way to remember this is that to sell is to go short.

Slippage

Slippage is the difference, usually calculated in pips, between the price you as a trader expect to be filled at when you press to buy or sell, and the price your order is actually executed at. While not much of an issue in highly liquid markets, volatility and the drop in liquidity that often ensues, can lead to orders being slipped when the price you have decided to trade on is no longer available.

Spike

A spike is a momentary jump or drop in the value of an asset.

Spot

Spot refers to the current, “on the spot” cash price that an asset is available for purchase. This is in contrast with futures, forwards or options that are traded for future delivery.

Stock

Also known as a share or equity, a stock is a type of security that entitles the owner to a small fraction of a publicly listed company, as well as a piece of its earnings in the form of a dividend. Stocks are publicly traded on exchanges, but also as CFD contracts that allow traders to speculate on a stock’s fluctuating price without taking possession of it.

Stop-Loss Order

A stop-loss order is a type of order that attempts to limit a trader’s losses in the event that the market they are trading moves against them. It’s essentially an instruction to automatically sell at a slight loss in order to avoid greater losses in the event of a fast moving market.