Terminology Simplified
Understanding terms and concepts in trading can be daunting, but here are some simplified details to shed light on some key terms:
Paul Cartwright
Last Update 2 years ago
Order:
An order is your instruction for entering a position. It specifies details like buy/sell, leverage, entry price, take profit, and stop loss.
Position:
Once the entry price of an order is reached, you enter a position as per the order's conditions.
When dealing with orders, you'll encounter these terms:
Buy/Sell:
Buying (going long) means betting on price rise, while selling (going short) means expecting price decline.
Market Order vs Limit Order:
A market order buys/sells at the current market price, while a limit order sets a specific entry price for execution, allowing better price control.
Leverage:
It involves borrowing funds to increase your position size beyond your balance. Higher leverage amplifies gains and losses.
Take Profit (TP):
It's a price level where you aim to exit a trade with profits, often expressed as a target.
Stop Loss (SL):
This specifies a price level at which you exit a trade to limit potential losses.