Glossary
Here are some common investing terms related to risk management and trading strategies that may be useful for traders using TradersPost.
- Arbitrage: The practice of exploiting price differences in different markets for the same asset.
- Asset Class: An asset class is a group of financial instruments or investments
- Ask Price: The lowest price at which a seller is willing to sell a security.
- Automated Trading: The use of computer programs to execute trades automatically without human intervention.
- Bear Market: A market trend where prices of securities are declining.
- Bender: Bender is an AI chatbot that is trained on all things TradersPost. He can assist customers by answering simple or complex questions about how TradersPost works. You can DM him in Discord to ask questions.
- Bid Price: The highest price at which a buyer is willing to buy a security.
- Bull Market: A market trend where prices of securities are rising.
- Call Option: An option contract that gives the holder the right to buy an asset at a specified price.
- Capital: The amount of money a trader uses to invest.
- Capital Gain: The profit made when selling an asset for a higher price than what was paid for it.
- Capital Loss: The loss made when selling an asset for a lower price than what was paid for it.
- Contract: An agreement between two parties to buy or sell an asset at a specified price and time.
- Currency Pair: Two different currencies that are traded in the forex market.
- Day Trading: The practice of buying and selling securities within the same trading day.
- Derivative: A financial instrument whose value is based on an underlying asset.
- Diversification: The practice of investing in a variety of assets to reduce risk.
- Dividends: Payments made by a corporation to its shareholders, usually in the form of cash or additional shares.
- Exchange: A marketplace where securities, commodities, or derivatives are traded.
- Futures Contract: An agreement between two parties to buy or sell an asset at a future date at a specified price.
- Hedge: A strategy used to reduce risk by taking an offsetting position in a related asset.
- Index: A benchmark that measures the performance of a group of securities.
- Investment: The act of putting money into an asset with the expectation of making a profit.
- Initial Public Offering (IPO): The first sale of a company's stock to the public.
- Leverage: The use of borrowed funds to increase the potential return of an investment.
- Limit Order: An order to buy or sell an asset at a specified price or better.
- Long Position: The act of buying an asset with the expectation that its value will increase.
- Margin: The amount of money required to open and maintain a position.
- Margin Call: A request by a broker to deposit more funds into a margin account to cover losses.
- Market Order: An order to buy or sell an asset at the current market price.
- Midpoint: The middle price between the bid price and the ask price.
- Option: A contract that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price and time.
- Portfolio: A collection of investments held by an individual or institution.
- Price-Earnings Ratio (P/E Ratio): A ratio used to measure the value of a company's stock by comparing its current price to its earnings per share.
- Put Option: An option contract that gives the holder the right to sell an asset at a specified price.
- Quantitative Easing: A monetary policy used by central banks to increase the supply of money by buying government bonds or other securities.
- Rally: A sharp increase in the prices of securities.
- Recession: A period of economic decline characterized by a decrease in GDP, employment, and trade.
- Risk: The potential for loss or gain from an investment.
- Risk Management: The process of identifying, assessing, and mitigating risks associated with an investment.
- Short Position: The act of selling an asset with the expectation that its value will decrease.
- Spread: The difference between the bid and ask price of an asset.
- Stop Loss: An order to sell a security when it reaches a certain price, used to limit potential losses.
- Strategy Subscription: A strategy subscription is how you connect a strategy to a broker in TradersPost.
- Strike Price: Also known as the exercise price, is the predetermined price at which the holder of the option contract can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.
- Take Profit: An order to sell a security when it reaches a certain price, used to lock in profits.
- Ticker: A ticker is a unique symbol that represents a financial instrument, such as a stock, futures contract. You use tickers to tell TradersPost what asset you want to trade in your trading signals.
- TradingView: TradingView is a web-based platform that provides charting tools, real-time market data, and a social network for traders and investors.
- TrendSpider: TrendSpider is a web-based, automated technical analysis software designed for traders and investors to efficiently analyze market data and identify trading opportunities.
- Washsale: A wash sale occurs when an investor sells a security at a loss and repurchases the same or a substantially identical security within 30 days before or after the sale. It's often an attempt to claim a tax loss without changing the investment position. However, the IRS has rules to prevent tax advantages from wash sales.
- Webhook: A webhook is an automated method for one web application to communicate with another web application in real-time by sending data or notifications when a specific event occurs. In the context of automating trading, webhooks are used to send a trade signal from one system to another like TradersPost.