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Financial Terminology
Most of our guides here at investfox contain various trading-related terminologies like pips, short squeeze, long position, stop-loss, cable, and many more. If you are familiar with the letters that make up these words but don't quite understand how they are used in relation to financial markets - you are in the right place. Our expert team here at investfox has composed a detailed description of every trading term one needs to know to get ready for trading and go, go, go.
What Is Dollar-Cost Averaging (DCA)?
Investing can be challenging regardless of the broad market sentiment. Short-term fluctuations can easily turn a potentially profitable trade negative. To combat this, some investors choose to ignore the short-term price movements of a stock and look at the fundamentals to decide whether to commit their capital to the stock or not.
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What does price-earnings ratio mean in stocks?
The price-to-earnings ratio, or PE ratio for short, compares the stock's price to its earnings.
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What are bid and ask prices in financial trading?
When you buy or sell any financial instrument, you will see different prices denoted to the security, which is a reflection of the fluctuations in that specific market.
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What is a margin call in Forex and stock trading?
A margin call is a notification that you receive from your broker that your trade requires your attention. Traders are required to act quickly to the margin call because it is going to decide the future of their investment.
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What does ECN execution mean in FX trading?
Forex trading has seen enormously developed in recent years, everything became accessible online, and any trader can buy and sell currencies from anywhere. In addition, traders can now use different ways to place their market orders.
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What is a stop out level?
Margin trading is quite popular in the Forex trading market. While it can increase your profits, it also comes with downside risks traders should know about. Trading on margin can help traders maximize their profits from Forex.
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How does stop-loss and take-profit work in Forex trading?
Stop-Loss (SL) and Take-Profit (TP) orders help you control the gain and the loss of your trades. These tools help your broker understand your goals and your expectations.
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What is an Ex-Dividend Date and how to find It for a certain stock?
Investing in stocks and earning dividends can make a significant income. However, when you are hunting for receiving dividends, you do not want to miss the ex-dividend day if you wish to qualify for the next dividend payment.
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What is equity in financial trading?
In financial trading, gains from active trading positions are usually confused with the trading account balance. Equity in financial trading is calculated by adding or deducting the value of your active trades to your balance. It is different from the account balance, which shows the money you have in your account from closed trading positions.
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What are bonds and are they worth investing in?
Bonds are financial securities issued by governments or corporations for the exchange of cash flow. The bond issuer uses the allocated cash to fund different projects or for research and development reasons.
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What is an ETF meaning and definition in trading?
ETFs might look similar to mutual funds, but they both are run by several investors who invest in a basket of securities, and they are considered a safer investment for beginners as they are less volatile.
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