Trading glossary




Balance sheet

One of the three financial reports of a company. It is the one where the assets vs. equity and liabilities of a company are presented.

Bull market

Those markets where the prices of their assets have a marked tendency to rise.

Bear market

Those markets in which asset prices have a marked downward trend.

Book value

It is the monetary value of a company  based on its financial statements. 


It is a licensed financial intermediary, which allows ordinary people to invest in the financial markets in a safe and secure way. Among the investment assets offered by a broker we can find: stocks, cryptocurrencies, futures, CFDs, currencies, stock indexes, ETFs, among others.


Name given to an investor (bull), when he bets that the price of an asset will rise.  Or it is the name given to the market (bullish) when it is believed that it will have a prolonged rise in prices, i.e. it is the name given to bull markets.


Name given to an investor (bear), when he bets that the price of an asset will go down.  Or it is the name given to the market (bearish) when it is believed that there will be a prolonged fall in prices, i.e. it is the name given to bear markets.


Central bank

It is the regulator of monetary and banking policies in a country or region. The central bank intervenes in the economy by setting interest rates, exchange rates and controlling the money supply.



A contract for difference (CFD) is a spot derivative investment vehicle based on the fluctuation of the price of an underlying asset. 


It represents all official foreign currencies different from the official currency of a country or region.

Candlestick chart

It is one of the three types of price charts that exist. The candles represent the opening and closing prices in the price of an asset, while the wicks represent the highs and lows reached by the price during the trading day. The green candlestick means that the closing price is higher than the opening price (bullish), while the red candlestick means that the closing price is lower than the opening price (bearish).

Currency pair

The way currencies are traded and organized in the foreign exchange market. The currency pair consists of a quote and the two currencies involved in a trade.

Closed position

It is the state of the operation in which the investor makes effective profits or losses. Closing a position implies performing the opposite action to the one you did when you opened the position. If I buy currencies, I must sell them to close the position and vice versa.


Day trading

Trading strategy whose objective is to end up with a liquid portfolio at the end of the trading day. It consists of opening and closing a large number of trades in a day and benefiting from minimal changes in price volatility. 


This is the phenomenon of loss of value of one currency against another. If yesterday 1 USD bought 0.9 EUR and today 1 USD bought 0.8 EUR, we say that the dollar depreciated 0.1 USD against the Euro.


The monetary value that an investor puts into his trading account to trade the financial markets.

Dynamic stop

It is a dynamic order that adjusts according to market changes. That is, it will adjust with your position if the market plays in your favor or close the position if the market moves against you.

Dow Jones

A stock market indicator that is composed of the 30 companies with the largest market capitalization on the New York Stock Exchange.


Economic calendar

It is a tool that shows the main economic and macroeconomic events that can affect the financial markets, from corporate news to IPO announcements. 

Economic index

It is Statistical data that allow analyzing the performance and economic situation of a country, as well as making predictions about its evolution in the short term.


Exchange traded funds (ETFs) are investment vehicles that track and copy the performance of a stock index, commodity or particular asset but are traded as a stock on the stock exchange. 

Ex dividend

A period of time in which a shareholder loses the right to receive dividends.


Financial Assets

A financial asset is a security or contract, mostly transferable and negotiable, that provides its holder with income or capital gains.

Fill or kill

An order that is programmed into the MT4, which indicates to execute a buy/sell position at a specified price and volume, if the requirements are not met within the stipulated time, the order is automatically cancelled.


It is the name given to the buying and selling of currencies in the stock markets. The foreign exchange market is the most liquid market in the world and currently closes daily operations in excess of 5 trillion dollars.

Fibonacci Retracements

A technical analysis strategy, which allows predicting resistance and support points, through mathematical calculations and chart analysis. This strategy is based on the Fibonacci sequence, as stated in the “Liber abaci” (book of the abacus) by Leonardo de Pissa.

Fair value

Value agreed between two parties

Fundamental analysis

It is a type of analysis of financial markets, which aims to determine the REAL value of an asset in the long term, from the study of the internal situation of a company (financial statements) and macroeconomic variables by which it is affected (inflation, GDP, interest rates, unemployment rate, etc). 

Futures contracts

Futures are underlying financial assets, where by means of a contract the parties agree to buy and sell respectively an asset (usually commodities) fixing a price today and the date of payment in the future. In this way the price is frozen and price volatility is avoided.



Option to buy an asset in the future at a price agreed in the present.

Going short

Going long means betting that the price of an asset will go down. The investor benefits from falling prices by selling to buy more cheaply in the future.

Going long

When the investor benefits from rising asset prices.

General Shareholders' Meeting

The annual meeting between shareholders and the top management of a company at which the reports and financial status of the company are presented.


Hedge fonds

Hedge funds are high-risk investment vehicles whose purpose is to obtain the maximum possible return on each investment. They differ from traditional investment funds in that they can operate with fewer legal constraints.


Hedge, in trading we understand hedging as the additional positions that an investor opens to protect himself from a bad result with his main operations.  

HTF (high frecuency trading)

It is a trading strategy based on algorithms and powerful software and hardware which consists of opening and closing hundreds of positions in very short periods of time: minutes, seconds, or fractions of seconds.



Person or entity that issues securities (shares, bonds, currencies, etc.) to be traded in the stock markets

Income statement

A financial statement that summarizes a company’s revenues, costs, expenses and profits for a specific period of time. period of time.

Investment fund

Group of individuals who pool funds to invest jointly in different baskets of financial assets which include equities, fixed income bonds, indices, ETFs, among others.


This is one of the main players in the financial markets. It can be a person or a company, the investor is the one who allocates a sum of money to buy financial assets on the stock markets in order to obtain profits in the short or long term.


It is the name given to the phenomenon of a constant and prolonged rise in the prices of goods and services in a country. The higher the inflation, the lower the purchasing power, i.e., with each monetary unit less goods and services are acquired.




Leverage is a financing figure that, in the online trading environment, is offered by the broker to its clients so that they can access larger volume operations. Leverage allows access to higher profit margins, but it also increases the risk of losses.


It is the interest rate used by banks in the United Kingdom as a basis for international operations. Also, the interest rate used by UK banks as a basis for international operations.


A lot refers to 100,000 currency units of a currency. Lots are the unit of measurement for Forex trading.


Market capitalization

Market capitalization refers to the total value of the outstanding common and preferred stock of a publicly traded company. The market capitalization value is obtained by multiplying the number of shares outstanding by their price. 

Margin call

The broker’s request to the investor to increase capital in order to keep a leveraged position open.


Amount of money that must be in an account to open and maintain a leveraged position.


It is the most widely used trading platform specialized in Forex and CFDs in the world.

Market order

An order or instruction given by the investor to his broker to execute a buy/sell transaction immediately and at the best possible price.


Refers to the deadline for payment of an acquired obligation.



It is the largest electronic and automated stock exchange in the United States. 


Online trading

Discipline that encompasses the analysis and subsequent investment in the financial markets. Such investments can be made by companies, financial institutions or small investors through software and an internet connection. 


It is the name given to Forex operations executed after the close of the trading day (18:00h).

Open position

State of the operation in which it is possible to receive profits or suffer losses, however they only become effective when the position is closed.


Portfolio diversification

The action of distributing capital in different assets and/or markets. A diversified portfolio reduces the risk of loss, but sacrifices profitability. It is a practice linked to risk management and is used in many trading strategies.


The Percentage Increment Point is the minimum possible variation in the price of a financial asset.

Price Gap

The considerable difference between the price of two consecutive quotes. In price charts, the gap is evidenced by a break in the continuity of the price line.


It is a binding commitment to buy and sell financial assets (currencies, stocks, futures, indices, etc.).


These are representative points where resistance and support are present. Pivot points from technical analysis are used to determine reversals, i.e. points where the price has a high probability of changing direction.



It is a long-term indicator, which measures the efficiency with which an organization manages its capital in terms of the profit generated by each monetary unit invested.

RIC (Return on Invested Capital)
Es un indicador de largo plazo, el cual mide la eficiencia con que una organización maneja su capital en términos del beneficio generado por cada unidad monetaria invertida

It is the probability that an undesired event will occur. In trading, risk is known as the ratio between the maximum loss on a trade vs. the available capital.

Resistance level

Point where the price of an asset stops falling and starts rising again.



Trading technique that consists of opening and closing operations in very short periods of time (seconds or minutes) to benefit from a few points of increase (PIP) in the price of an asset. As a main feature, all trades are made within the trading day in order to have a liquid portfolio at the end of the day.

Sell limit

Automatic order within MT4 that allows you to choose a selling price above the current market price. The order is only executed if the price reaches the indicated level.


The difference between the ask and bid price of an asset. 


An indicator used in technical analysis to determine overbought and oversold levels by comparing and analyzing the opening and closing prices of an asset, with its highs and lows over a given time interval. 

Sell limit

Automatic order within MT4 that allows you to choose a sell price above the current market price. The order is only executed if the price reaches the indicated level.

Stop loss

Automatic order within MT4 that allows you to set a minimum stop loss. That is, if the price of an asset falls to a certain level, the stop loss will close the position assuming a controlled loss. This is an essential trading tool and one of the pillars of risk management.


A financial share is a security that represents an aliquot of a company’s capital stock. The number of shares a person owns represents the percentage of ownership in the company.

Stock market cycle

Refers to the variation in the prices of financial assets over the long term.

Stock market transaction

Exchange of financial security within the stock markets, under conditions established between a bidder and an offeror.

Support level

The point where the price of an asset stops rising and begins to fall again.

Settlement date

The day on which a transaction becomes effective, i.e. the day of payment and delivery of the traded goods.


Take profit

It is an automatic execution order that allows you to choose a certain level of profit. The order instructs the broker to close a position when the price of an asset rises to the chosen level.

Technical analysis

It is one of the most widely used forms of financial market analysis. Its purpose is to predict changes in the prices of an asset, within a stipulated time frame, based on the analysis of graphs and historical price volatility.

Trend reversal

A clear and pronounced change in the direction of an asset’s price, from bearish to bullish or vice versa.

Trade size

It is determined by the number of units of an asset to be traded and the amount of money required to trade it.


Minimum variation in the price of a financial asset.  


An investor who carries out short-term operations over the Internet through a broker in the financial markets.


Term indicating an evident upward or downward movement, sustained over time, in the price of an asset or a financial market.



Price increase in the price of an asset. It occurs when the price of a security rises compared to the last transaction. 

Underlying asset

An underlying asset is an asset that takes the price of a derivative asset. Underlying assets are usually contracts, such as CFDs or futures.



An indicator that measures price changes in the price of an asset, within a given time frame.

Se refiere a la fecha limite para pagar una obligación adquirida



OTC (over the counter) financial derivative that entitles the holder to buy or sell a financial asset at a stipulated price at a stipulated time in exchange for the payment of a premium.


The term refers to markets with very high volatility. Its name comes from saw (saw in English) since the price charts of these markets show price rises, followed by reversal movements. 


Long-term investment method that seeks, through the analysis of the different phases of the market, to predict future movements in the price of an asset.



In finance one Yard = one Billion dollars


It is the metric that calculates the yield of stocks. Also known as “dividend yield”.