Trading Dictionary



Here you can read about terms used in trading and their descriptions.

A few general rules in trading are listed below.

Trading indicators are listed on a separate page. Candlestick patterns are also used as one of the trading indicators. Some patterns can indicate trend change.
Three white soldiers - indicate large players buying all the available stock on the market. The purchase is broken into smaller tranches in order not to raise the price too much.
Harami Hammer Pattern is a bearish sign.

Position sizing

Position sizing is the strategy that helps determine the amounts to be used in each single trade. The results show how much is earned or lost per 1 point of movement in the observed instrument price.

Short selling

Short selling is the option of selling a stock now and buying it back at a later time. The expectation is that the stock will go down in price and the profit will be made on the price difference between now and a future point in time.

Traders use both long and short positions in order to earn a profit.

Stop loss

Stop loss is a parameter on the purchase order when buying an instrument, that states that the instrument is to be sold if the price reaches this level. It is a form of risk mitigation where the fluctuation in price is tolerated between the current level and the stop-loss level. Therefore, stop-loss is always lower than the current price if we are buying (long). It is higher than the current price if we are selling (short).