Trader Slang: Key Terms for Market Navigation
In trading, it’s important to understand specific slang that helps traders quickly analyze situations and make decisions. Below are the main terms every trader— from beginners to professionals—should know.
Core Concepts
• Bull Market — a market where prices are rising, and investors are optimistic.
• Bear Market — a market where prices are falling, and investors expect further decline.
• Long — opening a buy position in the hope that the asset’s price will rise.
• Short — opening a sell position to profit from a fall in the asset’s price.
• Order — a command to buy or sell an asset.
• Limit Order — an order executed at the price set by the trader or better.
• Market Order — an order executed at the current market price.
Positions and Risk Management
• Stop Loss — an order limiting losses by closing a position once a specific price level is reached.
• Take Profit — an order capturing profit by automatically closing a position once a target price is hit.
• Leverage — borrowed funds that increase the size of a trader’s position.
• Margin Call — a broker’s requirement to deposit more funds or close positions when there aren’t enough funds to cover losses.
Analytics and Indicators
• Support — a price level where an asset tends to stop falling further.
• Resistance — a price level where an asset encounters obstacles for further growth.
• Moving Average — an indicator that smooths price fluctuations to reveal trends.
• RSI (Relative Strength Index) — an indicator showing whether an asset is overbought or oversold.
• MACD (Moving Average Convergence Divergence) — an indicator displaying changes in trend strength, direction, momentum, and duration.
Other Popular Terms
• Pump and Dump — a rapid increase in an asset’s price followed by a mass sell-off.
• Whale — a large trader or investor capable of impacting an asset’s price with their trades.
• Volatility — price fluctuation reflecting the level of risk.
• Liquidity — the ease with which an asset can be bought or sold without significant price change.
This slang is an essential part of the trading world, and knowing it will help you stay updated with the latest market events and make confident decisions.