Learning about the stock market and stock market terms can be intimidating, so the easiest way to get started is by learning the basic terms and phrases.
Jargon, or slang, is different from the literary speech norms, but usually makes communication easier. Like other groups, forex traders also have slang words used in their non-formal communication.
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The following list of 13 slang expressions will, however, help a newcomer to the market getting into the swing of trading quickly.
- The terms Bull or Bear markets are heard quite often. Bullish describes a situation when the market is upward, while bearish describes a situation when the market tends downward.
- A Margin call: When losses exceed margin, a margin call is given. Then you either have to refill your account or reduce some open trades. In forex trading, the Margin Call Level is when the Margin Level has reached a specific level or threshold.
- Long and short positions: Traders talk about a long position whenever they buy something with an assumption of an increase in price in future time, and a short position when traders sell something on the assumption of a price drop.
- Range, heat and Flat, or Square: When traders talk about the big risks in trades, they talk about “heat” and “range” whenever the market is stagnant, meaning there is not a down or upward trend for a while. “Flat” or “Square” is the term used for when traders sell all stocks.
- The terms Setup, Gap, and Whipsaw are used by traders in the following instances: A Setup is a specific environment for trading, while a Gap describes a difference between the last period’s close price and the next period’s open price. Whipsaw is a position of volatile markets, and in this condition, movements in price are sharp, followed by the same sharp reversals.
- The word Pip is present in almost any conversation about forex trading. Pip is the acronym for “percentage in point” or “price interest point.” A pip is the smallest price move that an exchange rate can make, based on forex market convention. Currency pairs are usually priced out to four decimal places and the pip change is the fourth or last decimal point.
- Profit or Gain and Loss: In forex trading, money earned or gained after selling stock is called Profit or Gain and money lost after selling stock is called Loss.
- Slippages: It is the execution of the order when the market is fast, but the broker has low liquidity, and due to this, he cannot execute a trader’s order.
- Squeeze: The action for raising the money price by any central bank is called Squeeze by traders.
- Limit order: A limit order is a type of order to purchase or sell a security at a specified price or better. For buy limit orders, the order will be executed only at the limit price or a lower one, while for sell limit orders, the order will be executed only at the limit price or a higher one.
- Liquidity: Liquidity refers to the ease with which an asset or security can be converted into ready cash without affecting its market price. Cash is the most liquid asset of all, while tangible items are less liquid.
- Majors: This term describes the most famous pairs of currencies available to trade, like AUD/USD, USD/CAD, USD/JPY, GBP/USD, and EUR/USD.
- Different currencies are also called by slang expressions, for example Cable refers to British Pound, Aussie to Australian Dollar, Swissie to Swiss Federation franc, Kiwi to New Zealand dollar, and Loonie to Canadian Dollar.
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