Trading Glossary

A strategy exploiting temporary price gaps between two markets or products that should match. Example: spot Brent crude is cheaper in London than in New York, so you buy one, sell the other, and lock the spread. High-frequency software, low commissions and ultra-fast connectivity are essential for consistent success.

The quote you must pay when opening a long CFD position. It is always fractionally higher than the Bid, and that difference is the broker’s primary visible charge. Spreads can explode during news, so thin equity or tight stops may trigger a margin call despite only small underlying moves.

The Australian dollar versus US dollar pair, nicknamed “Aussie.” Prices track commodity demand—especially iron ore and natural gas—and Chinese growth data. Liquidity peaks during the Sydney and Tokyo sessions. Big surprises in Reserve Bank of Australia statements or US non-farm payrolls can swing the pair hundreds of pips within minutes.

A volatility indicator that averages the day-to-day range, including overnight gaps, over a chosen period. A rising ATR signals bigger intraday swings and warns traders to widen stops, reduce leverage or avoid countertrend scalps. When ATR shrinks, range-bound strategies such as mean-reversion grids generally perform better.

Your ledger of settled funds: deposits, withdrawals and closed-trade results only. It never moves while a trade remains open. Comparing Balance curves to Equity curves reveals whether unrealised profits tend to vanish before you close. Consistently rising Balance is a healthier performance metric than fleeting spikes in floating profit.

The first currency quoted in any forex pair, for example EUR in EUR/USD. One lot size and pip value are expressed in that currency, though your account may settle profits in something different. Understanding which currency is “base” prevents confusion when calculating position sizes, swap charges and exposure totals.

A prolonged period—often defined as a 20 percent fall from recent highs—when sentiment turns negative and rallies keep failing. CFDs let traders profit by short-selling with no need to borrow stock, but overnight financing, dividend adjustments and headline-driven gaps still introduce extra cost and risk to bearish plays.

The quote received when selling a CFD or closing a long. Together with the Ask, it forms the spread. Tight spreads benefit scalpers, whereas larger-timeframe traders care less unless liquidating very large orders. During illiquid hours or fast news, Bids can vanish and slips become dramatically worse.

A contract mirroring North Sea benchmark oil futures. Prices are affected by OPEC supply decisions, geopolitical shocks, refinery outages and global risk appetite. Wednesday’s US inventory report often sparks volatility. Because oil trades almost around the clock, weekend news can trigger significant Sunday-night gaps requiring guaranteed stops.

Borrowing a low-interest currency to fund purchase of a high-yield currency and collecting the daily rate differential. Profitable while rate spreads stay wide and prices remain steady, but extremely vulnerable to surprise central-bank cuts, risk-off panics or violent gaps, which can erase years of carry gains overnight.

A derivative that tracks underlying price changes without conferring ownership of the asset itself. Advantages include leverage, ability to short quickly and access to many markets from one account. Disadvantages: overnight financing costs, broker dependence for pricing, and amplified losses that can exceed original deposits without negative-balance protection.

Fixed or variable fees charged per trade in addition to spreads. Brokers advertising “zero commission” usually embed the cost inside wider spreads or higher swap rates. Active scalpers should compare all-in round-turn costs carefully, because one extra pip per side can erase the edge of many high-frequency strategies.

The quantity of underlying asset represented by one lot. A standard FX lot equals 100 000 base currency units, while a typical gold CFD lot equals 100 troy ounces. Knowing exact contract size lets you convert pip movements into dollar risk, ensuring position-sizing calculators and risk-reward ratios remain accurate.

A forex pair that does not contain the US dollar, such as EUR/JPY or GBP/CHF. Crosses respond to two independent economies and often show wider spreads than majors. They are popular for hedging or carry trades, yet correlations can shift quickly, requiring traders to monitor both constituent central-bank calendars.

Entering and exiting positions within the same trading day, deliberately avoiding overnight financing costs and news gaps. Requires laser-focused screen time, strict discipline and rapid order execution. Small intraday targets mean transaction fees matter hugely; even slight increases in spread or slippage can flip a profitable strategy to negative.

Measures how much a CFD’s price should change when the underlying moves one unit. For spot products Delta is near one, whereas synthetic or leveraged instruments may show variable Delta. Understanding Delta helps options writers hedge correctly and highlights why large nominal exposure does not always equal proportional directional risk.

When a company goes ex-dividend, long share-CFD holders receive a cash credit approximating the dividend, while short sellers are debited. The share price usually gaps down by the dividend amount, so total economic effect nets to zero. However, timing errors around ex-dividend dates can distort technical signals.

The drop from an equity peak to the following trough, expressed in money or percentage terms. A 20 percent drawdown needs a 25 percent gain just to break even, illustrating compounding pain. Professional managers aim for shallow, short-lived drawdowns, using position sizing and diversification to smooth the equity curve.

Simultaneously buying and selling the same company’s shares on two different exchanges when currency-adjusted prices diverge. Profits are typically tiny and fleeting but repeatable with ultra-fast infrastructure. Traders must consider FX conversion costs, settlement times, and corporate-action mismatches that can freeze capital longer than intended.

A timetable of market-moving releases—employment, inflation, GDP, central-bank meetings—ranked by expected impact. Planning around the calendar avoids shock widenings in spreads and margin spikes. Some traders deliberately trade the reaction; others flatten exposure beforehand. Either way, knowing the schedule is basic survival rather than optional research.

A leveraged contract on an individual stock that lets you trade price moves without owning shares. Enables rapid shorting and fractional lot sizes, but you still carry company-specific risk like earnings surprises or takeover news. Dividend adjustments and corporate-action procedures mimic real share mechanics, so timing remains crucial.

A contract tracking an exchange-traded fund, offering cheap diversification or tactical shorts on sectors, factors or themes. Spreads tend to be tighter than baskets of single-stock CFDs. Nonetheless, overnight financing and any underlying tracking error compound over long periods, meaning very long holds can deviate from the benchmark.

The way orders fill in live markets: speed, slippage and partial fills. Market orders guarantee fill but not price; limits guarantee price but not fill. Choosing which to use depends on urgency, volatility and available liquidity. Top-tier brokers route orders smartly, reducing negative slippage and improving average fill quality.

The total nominal value at risk across all open trades, translated into base currency. Keeping exposure within reasonable multiples of equity—few professionals exceed five times—prevents single shocks from wiping accounts. Dashboards or position-size calculators help visualize hidden exposure, especially when several correlated symbols move together unexpectedly.

Confirmation that your trade executed. Fast markets can cause partial fills, rejections or huge slippage. Professional platforms display trade-by-trade execution reports so you can audit whether latency or liquidity hurt performance. Consistently poor fills may justify switching brokers or requesting institutional APIs and colocation services.

The worldwide, almost 24-hour currency market where major pairs like EUR/USD or USD/JPY trade trillions daily. Retail clients in Australia face a 30:1 leverage cap, though professionals can access higher. Because sessions overlap across continents, liquidity ebbs and flows, demanding adaptable strategies and keen awareness of regional economic cycles.

Interest debited or credited each evening to reflect borrowing one currency and lending another, or holding an index future through fair-value adjustments. High-yield currencies pay, low-yield cost; for indices it roughly equals benchmark rate minus dividend yield. Over weeks, funding charges can dwarf spreads, so plan hold times carefully.

Evaluating macro data, corporate financials, supply–demand dynamics and policy trends to judge fair value. Combining fundamentals with technical timing can reduce false entries. For instance, selling an overvalued stock only after price breaks moving-average support marries macro conviction to chart evidence, improving risk–reward versus standalone indicator signals.

A contract mirroring the nearest futures month. As expiry nears, the CFD automatically “rolls” into the next contract and credits or debits any price gap, producing a roll-adjustment on your account. Traders must track calendar spreads because steep contango or backwardation can erode long-term positions invisibly.

Gross domestic product, the headline measure of national economic growth. Big upside surprises strengthen the local currency and boost equity benchmarks; misses often sink both. Because components often leak beforehand via PMI or retail-sales data, markets sometimes “buy the rumour, sell the fact,” reversing shortly after publication.

A sudden jump in price between ticks, leaving an empty space on the chart. Weekend geopolitical shocks or earnings bombs cause large gaps. Stops trigger at the first available price, not your chosen level, so unprotected leverage can implode. Guaranteed stops or hedging options are insurance against gap risk.

Opening a buy trade to profit from rising prices, or a sell trade to profit from falling ones. CFDs make switching bias instant; however, short sellers pay dividends and sometimes higher financing. Understanding both cost structures avoids surprises when a “perfect” bearish call earns nothing after fees.

A paid feature that locks your worst-case exit regardless of slippage or gaps. Cost is a small premium baked into spread or separate fee. Traders in volatile assets—crypto, single-stock earnings or thin exotic pairs—often consider guaranteed stops essential psychological and financial protection, especially when sleeping through active sessions.

“Good ‘til cancelled” instruction that stays live until filled or manually removed. Ideal for patiently buying deep pullbacks or fading spikes while away from screens. Still, check ageing orders regularly because market fundamentals change; a price that looked attractive weeks ago may become dangerous after new information.

A candlestick with a long lower shadow and small body appearing after a decline, implying bulls absorbed selling and might reverse the trend. Confirmations include higher close next bar or supportive volume surge. Without extra evidence, hammers can become “dead-cat bounces,” trapping contrarians before downtrends resume.

Holding positions that offset each other’s risk, like long S&P 500 and long VIX calls. Perfect hedges lock in value but also cap upside, so most traders hedge partially to soften blows. Correlations shift, meaning yesterday’s hedge may fail tomorrow; always monitor hedge effectiveness under changing market regimes.

The highest equity level a managed account has achieved. Performance fees charged only on incremental gains above that line stop managers earning twice for recouping earlier losses. Investors favour funds using high-water marks because incentives align: managers get paid for new performance, not merely repairing past drawdowns

Sum of spread, commission, financing and sometimes stamp duty or transaction-based taxes. Short-term traders often ignore financing, while swing traders must model it explicitly. Long carry trades flip negative if rate differentials vanish, demonstrating why including every holding cost is vital when calculating realistic risk–reward expectations.

Periods like March 2020 when bid-ask spreads balloon and intraday swings double typical ranges. Brokers may raise margin, disable new positions or widen guaranteed-stop premiums. Survival hinges on quickly slashing leverage, widening stops, or even stepping aside until volatility normalises and order books refill with calm liquidity.

A market state with thin depth, few resting orders and wide spreads. Executing sizable trades here causes price impact—your own order pushes the market against you. Algorithms like TWAP or iceberg orders slice exposure into digestible chunks, trading slowly to minimise visibility and adverse slippage.

A basket representing benchmark indices such as US500, NAS100 or ASX200. Offers broad diversification and longer trading hours than underlying cash markets. Margin requirements are lower than equivalent futures but higher than major forex. Dividends are reflected via daily financing adjusts, usually as small overnight credits to long holders.

Up-front deposit demanded when opening a trade. Expressed as percentage of contract value—e.g., 5 percent for gold, 3 percent for EUR/USD. Brokers sometimes raise initial margin ahead of elections or earnings, effectively throttling new leverage. Keeping spare cash ensures you can seize opportunities when tightened requirements appear.

Persistent rise in the general price level. High or accelerating CPI erodes purchasing power, pressures central banks to hike rates, boosts inflation-hedge assets like gold and often flattens yield curves. Traders watch core versus headline numbers and forward-looking breakevens to anticipate policy shifts that roil rate-sensitive instruments.

Reduced margin applied during main session if you promise to close positions before settlement. Appeals to scalpers chasing fleeting moves, but missing the close rolls positions onto higher overnight margins and funding costs. Automated alerts and platform time settings help intraday traders avoid expensive, unintended carry-overs.

Traditionally low-yield “funding” currency used in global carry trades. Because Bank of Japan policy often diverges from the Federal Reserve, USD/JPY swings alongside US Treasury yields. Unexpected verbal or actual intervention from Japanese authorities can whipsaw the pair, making protective stops and disciplined sizing essential.

Weekly US unemployment insurance filings. Numbers above or below expectations can jolt the dollar and equity indices for minutes, offering short-lived momentum trades. High-frequency algorithms read the release instantly; discretionary traders often wait a few seconds for spreads to tighten before entering to avoid punitive slippage.

Trading account shared by two or more named holders with equal legal rights. Withdrawals typically require all signatures, adding security but slowing access. Joint structures suit family investment accounts or mentorship setups, though taxation and dispute resolution differ by jurisdiction, so participants should draft clear operating agreements.

Regulatory exposure arising from where broker and client reside. Strong watchdogs like ASIC, FCA or CFTC keep client funds in segregated trust accounts and enforce fair-market rules. Weaker jurisdictions may allow excessive leverage, opaque pricing or poor complaint handling, which sometimes ends with frozen withdrawals or broker insolvency

Pairs such as EUR/JPY, GBP/JPY and AUD/JPY. Influenced simultaneously by European data, commodity headlines and Japanese policy shifts, resulting in bigger average ranges than dollar pairs. Because Tokyo’s midday lull reduces liquidity, sizable orders timed around that gap can experience outsized slippage if sudden headlines break.

Price bar depicting open, high, low, close in one visual package. Sequences of candles form recognisable patterns like Morning Star or Engulfing, offering insights into buyer-seller psychology. Combining candlestick signals with volume and support–resistance strengthens reliability, reducing false triggers that plague pattern-only strategies.

Predetermined barrier in limited-risk CFDs or turbo certificates. Once underlying price touches the knock-out, the position closes automatically for a fixed maximum loss. Attractive for budgeting risk with no surprises, yet barriers can be swept during normal volatility, meaning traders must set distance thoughtfully relative to asset’s typical range.

Mandatory identity verification covering passport, proof of address and sometimes source-of-funds documents. It combats money-laundering and terrorism financing. Submitting clear scans early prevents later payout delays; incomplete KYC can freeze profits at the exact moment you need funds to meet personal cash-flow obligations.

Nickname for the New Zealand dollar. Sensitive to global dairy prices and Reserve Bank of New Zealand decisions. Because New Zealand releases data hours before most centres open, thin liquidity exacerbates moves, making NZD pairs prime candidates for breakout strategies during the Wellington session’s first minutes.

Volatility envelope plotted around an exponential moving average using ATR for width. Prices hugging the upper band in rising ATR denote strong uptrends; touches without ATR confirmation often signal exhaustion. Traders blend Keltner with RSI divergence to catch reversals while refusing premature exits during healthy directional runs.

Trading borrowed money so small price changes create disproportionately large account swings. Ten-to-one leverage turns a 1 percent move into 10 percent equity change. Tempting for fast gains yet famously unforgiving when markets gap. Strict position-sizing rules and unavoidable stop-losses are the only sustainable methods under high-leverage conditions.

Instruction to execute only at your specified price or better, guaranteeing cost control. However, runaway markets may blast straight through the level and leave you sidelined. Combining limit entries with time-based expirations keeps stale orders from activating when a level later becomes fundamentally unattractive.

Depth and ease of transactions without moving price. Deep liquidity ensures tighter spreads, smaller slippage and smoother chart action, favouring scalpers. Illiquid corners—small-cap equities, exotic currency pairs—offer wilder percentage moves but can trap traders trying to exit. Balancing opportunity against exit risk defines smart asset selection strategies.

Fixed contract quantity. Forex standard lot equals 100K units; mini lot 10K; micro lot 1K. Metals, energies and indices each have unique lot definitions. Failing to adjust lot size when switching symbols can unintentionally multiply risk, so many traders embed lot-to-dollar calculators directly in their platform templates.

Daily credit or debit reflecting interest-rate differentials or index fair-value drift. Positive swaps add a subtle extra yield to carry trades; negative ones quietly bleed. Over months, swap flow can outstrip entry spreads, turning an apparently winning chart pattern into a net-losing, fee-driven outcome.

Collateral locked by the broker to cover potential losses. Free margin shrinks as open losses climb, limiting ability to add hedges or new trades. Budgeting margin ahead of high-volatility events ensures positions survive normal fluctuations rather than auto-closing exactly when the market whips back favourably.

Broker alert that equity no longer covers maintenance margin. Failure to add funds or cut size will trigger forced liquidation at current prices, however unfavourable. Automated liquidations start with largest losers, but gaps can still close all positions. Adequate cash buffers remain the best antidote.

Dealer who quotes continuous Bid and Ask prices, profiting from spread capture while hedging inventory risk elsewhere. Reputable market makers provide crucial liquidity yet must balance order flow to avoid directional exposure. Regulators require best-execution policies preventing unfair re-pricing against retail clients during spikes.

The arithmetic or exponential average of past closes, smoothing noise and revealing direction. Crossovers (e.g., 50-day over 200-day “golden cross”) are classic trend signals. Many traders combine moving averages with momentum oscillators to filter choppy conditions and focus entries on proven breakout accelerations.

MetaTrader platforms powering most global CFD retail trading. Offer one-click trading, custom indicators, automated strategies and copy-trade services. VPS hosting keeps robots running during power outages. Proprietary brokers sometimes restrict hedging or extra decimal pricing, so reading platform policies before coding strategies prevents unpleasant surprises.

Leverages Nasdaq-100 future, dominated by tech giants like Apple and Microsoft. Intraday volatility suits momentum scalpers, yet rapid gaps on earnings releases punish late exits. Financing reflects fair-value carry; holding through index re-balancing can cause minor adjustments when constituent weights shuffle.

Per-share value of an ETF or fund calculated from underlying holdings. ETF CFDs can trade at premiums or discounts versus NAV, especially outside regular hours. Persistent gaps invite mean-reversion trades, but understand creation-redemption mechanics before shorting apparent premiums that may persist for structural reasons.

Retail safeguard where broker caps worst outcome at zero. Extreme gaps still liquidate positions, but you’ll never owe money. Professional accounts may waive protection for higher leverage, so sign only if you can tolerate theoretical losses beyond deposit.

Combined directional exposure after offsetting longs against shorts. A trader long EUR/USD and short GBP/USD holds hidden USD long risk. Regularly aggregating net exposure across correlated symbols prevents unpleasant shocks from coordinated currency or sector swings.

Monthly US employment headline widely viewed as peak short-term volatility event. Spreads often widen by tenfold seconds before release; many brokers temporarily switch to “close-only” mode. Those trading NFP should use guaranteed stops or predefined binary option structures to bound downside.

Paired orders where triggering one instantly cancels the counterpart—perfect for breakout strategies with built-in protective exits. Traders place a buy stop above resistance and sell stop below support; whichever side fires defines the trend, while the cancelled leg prevents doubling exposure during whipsaws.

Any active trade subject to market moves, margin requirements and financing. Monitoring open-position list alongside news calendars prevents overlooking vulnerable trades ahead of earnings or data releases. Housekeeping involves closing fractional leftovers and consolidating correlated positions to streamline margin usage.

Stack of current bids and offers at each price level. Visible depth helps identify where large players may defend or attack zones. Dark pools and iceberg orders limit full transparency, yet observing sudden order-book thinness warns of upcoming volatility bursts.

Decentralised trading away from centralised exchanges. Provides flexible hours, bespoke contract sizes and privacy, but carries counterparty risk. Choosing well-regulated OTC providers, using segregated accounts and reading financial statements protects traders from flash defaults or suspended withdrawals that occasionally plague offshore entities.

Decentralised trading away from centralised exchanges. Provides flexible hours, bespoke contract sizes and privacy, but carries counterparty risk. Choosing well-regulated OTC providers, using segregated accounts and reading financial statements protects traders from flash defaults or suspended withdrawals that occasionally plague offshore entities.

Daily charge reflecting interest or fair-value drift for positions kept past the broker’s rollover time. For equities it equals benchmark rate minus dividend yield; for currency CFDs it mirrors interbank swap differentials. Evaluating net financing burden helps decide whether to day-trade or swing-trade a given instrument.

Instruction to trade once price reaches a specified level. Traders use buy-limits to catch pullbacks or sell-stops to ride breakouts unattended. Danger arises when news-driven gaps leap beyond limit trigger; order executes far worse than planned, emphasising need for slippage controls or guaranteed-limit products.

Smallest quoted price increment. For most forex majors, one pip equals 0.0001; brokers sometimes quote fractional pips for tighter spreads. Multiplying pips by pip-value converts moves into cash, guiding stop and take-profit distances that align logical chart structure with predetermined monetary risk.

Spreading risk across uncorrelated assets—equities, bonds, commodities and currencies—to smooth equity curves. Correlations spike during crises, so diversification is no panacea. Still, balanced portfolios usually experience shallower drawdowns and give traders psychological resilience to maintain disciplined strategies through inevitable market turbulence.

Trading decisions based purely on raw price movement—swing highs, swing lows, supply–demand zones—rather than indicators. Advocates argue indicators only echo price with lag. Mastery demands screen time and pattern memory, yet when combined with recorded statistics on win rates, price-action setups become objectively testable.

Combined realised and unrealised results revealing actual account performance. Unrealised gains evaporate quickly, so professional traders trail stops or scale out. Recording each trade’s rationale, exit reason and emotional state helps refine decision-making and prevents future self from repeating identical, avoidable mistakes.

Central bank programme buying bonds with newly created reserves. Injects liquidity, lowers borrowing costs, often weakens currency and inflates risk assets. When tapering signals appear, leveraged equity longs can suffer sharp corrections, underlining the importance of macro awareness even for chart-focused intraday traders.

Acid-test measure of corporate liquidity: (current assets – inventory) / current liabilities. A sudden drop suggests cash crunch, pressuring share prices. Equity-CFD traders watch quick-ratio shifts to pre-empt credit-rating downgrades or rights issues that may accelerate downtrends.

Second currency in any FX pair, such as USD in EUR/USD. Profit, loss and margin ultimately convert into quote currency before settling in your account denomination. Eclectic quote currencies can trigger conversion fees or residual FX exposure if the broker doesn’t auto-convert immediately.

Scheduled switch when index- or commodity-linked CFDs transition from expiring futures month to the next. Price differential appears as cash adjustment on your statement, neutralising economic effect. Traders holding chart positions must update technical levels because continuous charts include roll gaps unseen on underlying futures.

Algorithmic system using statistical edges—momentum, mean-reversion, factor tilts—to generate trade signals. Robust models cross-validate on out-of-sample data and adapt to regime changes. Deployment requires low-latency execution, disciplined risk limits and monitoring for model drift, where historical edge decays under evolving market micro-structure.

Cash-locked outcome of closed trades. Determines taxable income and withdrawable funds. Separating realised from floating keeps you honest about performance—counting paper gains encourages complacency, while crystallised results drive process improvements grounded in hard evidence.

Momentum oscillator scaled 0-100. Values above 70 often signal overbought, below 30 oversold, yet in strong trends RSI can stay extreme for weeks. Overlaying RSI divergences with price-action or moving-average breakouts filters false reversals and identifies higher-probability entries.

Price area where selling interest repeatedly overcomes buying pressure. Multiple prior touches or high-volume clusters reinforce resistance. Breakouts confirmed by strong volume suggest trend continuation; weak breakouts prone to fail, offering fade opportunities with tight protective stops just beyond the false break point.

Broker message stating requested market-order price is unavailable, offering a new quote instead. Frequent requotes indicate thin liquidity or sluggish execution infrastructure. Traders reliant on precise timing, such as news straddles, should seek brokers with true-STP routing or guaranteed-fill policies.

Framework governing position sizing, stop placement, portfolio correlation and maximum daily loss. Without strict risk-control rules, even brilliant entry strategies eventually encounter unfavourable streaks that devastate capital. Professionals cap single-trade risk around one percent of equity and reduce leverage further during volatility spikes.

Ultra-short-term trading style targeting a few pips repeatedly. Success hinges on razor-thin spreads, lightning execution and emotional stamina to fire hundreds of trades daily. Many brokers disallow aggressive scalping on standard accounts due to server load, so always review terms before deploying high-frequency scripts.

Opening a sell position to benefit from falling prices. In share CFDs you pay equivalent dividends to long shareholders and potentially higher borrowing costs on scarce floats. When regulators impose temporary short bans, share-CFD providers follow suit, so stay alert to headline risk.

Difference between expected and executed price. Positive slippage benefits traders, negative slippage costs. News releases, thin liquidity and very large orders raise slippage probability. Setting maximum-deviation parameters or using limit orders in calmer periods keeps effective costs predictable.

Gap between Bid and Ask representing base cost of entry and exit. Tighter spreads increase win-rate thresholds, which is why algorithmic scalpers migrate to ECN-style accounts offering raw spreads plus commission. Brokers widen spreads when volatility spikes, so pre-news stop-orders need extra breathing room.

Overnight interest charge or credit. Currency pairs reflect benchmark-rate differentials; stock indices reflect fair-value futures carry. Long-term trades should budget cumulative swaps relative to expected profit, otherwise seemingly minor daily drips gradually erode what looked like healthy trend-following gains.

Studying charts to forecast price direction using patterns, trendlines and indicators. Critics call it self-fulfilling, yet millions watch the same levels, making reactions real. Combining technical triggers with macro context offers “why” plus “when,” improving timing and confidence.

Smallest possible price movement of a trading instrument. Knowing tick value converts chart moves into monetary amounts for precise risk planning. Some brokers quote fractional ticks, producing tighter spreads; traders must adjust position-size calculators accordingly to avoid unintended leverage spikes.

A stop-order that automatically moves in your favour by a set distance, locking incremental profit while allowing trend continuation. In fast moves, trailing stops can lag wide enough to avoid premature exits yet still protect against complete reversals.

Quarterly expiration when US stock options, index options and index futures all settle simultaneously. Volume surges and order-book imbalances cause sudden late-day swings. Short-term traders tighten stops or close positions beforehand; arbitrage desks exploit pricing dislocations between expiring and next-month contracts.

Portion of an option’s price reflecting remaining life; disappears as expiry nears. Futures-CFD holders feel time value through roll adjustments, especially in contango commodities where each rollover debits longs. Calculating annualised carry cost helps decide whether to stay in front-month or shift exposure down the curve.

The real instrument a CFD tracks: cash index, spot FX, metal, energy future or share price. Understanding trading hours, holiday calendars and major drivers for that asset helps anticipate gaps, volume lulls and high-impact news far better than watching the derivative alone.

Open-trade profit or loss fluctuating with every tick. Counts toward account equity and free margin, impacting ability to open new trades. Seasoned traders avoid celebrating floating gains, knowing markets can steal back paper profits faster than they appeared.

Sequence of higher highs and higher lows, often confirmed by price staying above an upward-sloping moving average. Buying pullbacks within uptrends generally offers better probability than fighting trend tops. Trend breaks signal caution: sideways consolidation or outright reversal may follow.

Heavily traded pair influenced by relative interest-rate expectations and risk sentiment. Rising US yields usually lift USD/JPY, while equity-market panics send yen higher as investors unwind carry trades. Bank of Japan intervention headlines can spark multi-yen moves within seconds, demanding pre-placed protective orders.

CFD tracking a blockchain utility token like Ethereum’s ETH. Volatile, trades 24/7, and carries relatively high overnight funding. Regulatory announcements, hard-fork upgrades or smart-contract failures can catapult or crash price unexpectedly, so position sizing and guaranteed stops become critical tools for risk containment.

Floating bid-ask gap widening when liquidity thins and narrowing in calm. Top-tier EUR/USD spread may average 0.2 pips but balloon to 5 pips around NFP. Visibility into spread history helps traders choose times to enter or avoid, aligning strategy edge with realistic transaction costs.

Tracks the CBOE Volatility Index derived from S&P 500 options. VIX spikes when uncertainty rises, offering inverse correlation hedge against long stock portfolios. Because VIX reverts quickly, timing entries requires experience; prolonged low-volatility environments steadily drain carry until the next fear shock erupts.

Statistical measure of price variability, seen in indicators like ATR or Bollinger Band width. Rising volatility increases potential profit targets but demands smaller size or wider stops. Adaptive position-sizing models scale down exposure during volatility spikes to maintain constant dollar risk.

Count of shares, contracts or lots traded. Rising volume during breakouts confirms conviction; low volume indicates apathetic moves likely to fade. CFD volume sometimes proxies futures data, so serious traders watch primary-market feeds to validate breakout reliability.

Volume-Weighted Average Price—benchmark showing average execution price for institutional orders. Algorithms slice large trades around VWAP to minimise market impact. Retail day traders use VWAP as intraday fair value: long bias above rising VWAP, short bias below declining VWAP.

Cash available for withdrawal, excluding margin tied up in trades. Healthy wallet balance acts as cushion against margin calls and funds opportunity. Keeping some profits withdrawn periodically safeguards against platform outages, emotional over-trading or catastrophic account blow-ups.

Sharp, rapid price reversals that trigger stops on both sides, common in range-bound or algorithm-dominated markets. Wider stops or confirmation filters like closing prices help reduce whipsaw damage. Accepting occasional small losses avoids larger erosions caused by repeatedly chasing fake breakouts.

Process of moving funds from broker to bank. Regulated firms under ASIC must process withdrawals within a few business days and segregate client money. Planning withdrawal timing around public holidays avoids added delays.

West Texas Intermediate oil benchmark. Tuesday’s API and Wednesday’s EIA stock data often set weekly tone. Because delivery point is landlocked Cushing, pipeline or storage bottlenecks have sent front-month WTI negative before, proving extreme price scenarios happen.

Resulting cost basis when building positions in multiple tranches. Traders track weighted average to decide where to place breakeven stops, evaluate scale-in versus scale-out efficiency and report precise realised gains during partial exits.

Classic hedge against currency debasement and geopolitical stress. Inverse relationship with real yields means falling Treasury-inflation-protected rates often spark gold rallies. Liquidity peaks during London hours; Asian physical demand dominates seasonal patterns like Chinese New Year gifting.

Hybrid precious and industrial metal. Silver’s beta to gold is typically 1.5-2, making it a high-octane play on precious-metal sentiment. Industrial demand from solar panels and electronics introduces additional economic leverage.

Crypto asset embroiled in ongoing regulatory litigation. Court rulings swing price unpredictably, while airdrops and exchange listings generate event-driven spikes. Overnight swaps run high, pushing traders toward shorter holding periods or hedged option structures.

System that pools margin across positions, allowing gains on winners to offset losers. Provides efficient capital usage but risks cascade liquidation when one oversized loss drains shared collateral, taking otherwise healthy trades down together.

Proprietary multi-asset platform offering in-browser trading, advanced sentiment tools and integrated economic calendar. Supports both manual and algorithmic strategies via API. Mobile companion app lets traders monitor and adjust exposure on the go, enhancing risk control during market events.

Annualised return expressed as percentage of invested capital. For bonds it represents coupon income relative to price; for equities, dividend yield. Inflation-adjusted “real yield” dictates currency attractiveness and equity valuations, making yield curves critical reading for macro-oriented CFD traders.

Pairs like EUR/JPY, AUD/JPY and CAD/JPY where yen serves as funding currency. Carry-trade flows strengthen yen during risk-off episodes, producing outsized intraday swings. Thin liquidity during Tokyo lunch means small orders can push prices several pips, presenting opportunities and danger simultaneously.

Performance metric measuring return from January 1 to current date. Investors compare YTD figures against benchmarks to judge strategy quality. Seasonality studies use multi-year YTD averages to identify calendar effects like “sell in May” or Santa rallies.

Compares latest reading with same period one year earlier, smoothing seasonality. Traders watch YoY inflation or earnings growth to detect longer-run accelerations or decelerations that may force central-bank or management policy shifts.

Graph of bond yields across maturities. An inverted curve—short yields above long—historically signals recession. Equity-index CFD traders monitor curve shape to anticipate rotations between cyclical and defensive sectors.

South African rand versus US dollar. High carry attracts speculators, yet volatility spikes on local political unrest or global risk-aversion waves. Rand also correlates with gold prices due to South Africa’s mining industry, making dual-driver analysis essential.

Policy guaranteeing retail accounts never fall below zero, even during flash crashes. Broker absorbs deficit or claws back via insurance. Peace of mind encourages sensible leverage rather than fear-based under-trading.

Chart tool drawing straight lines only when price moves a user-defined percentage, filtering minor swings. Helps visualise Elliott waves and identify meaningful support–resistance turns. Should not be traded blindly because it repaints after confirmation, but remains valuable for post-hoc structural analysis.

Martingale-style technique doubling opposite exposure when price moves against initial trade, aiming to exit at breakeven within a defined zone. Works in ranging markets but compounds losses dramatically in trends, so disciplined cut-off rules and capital caps are paramount.