Trader's Guide
Trader's Dictionary
What is the stock market?

The stock market is a collection of markets and stock exchanges where the regular purchase, sale and issue of shares in publicly traded companies takes place. Such financial activities are carried out through institutionalized formal exchanges or over-the-counter (OTC) markets, which operate according to defined regulations.

What is a bear market?

The bear market is the state of the market when prices fall for a longer period of time. A typical example is a situation in which the prices of traded assets fall by 20% or more from recent highs due to widespread pessimism and negative investor sentiment. The bear market is the opposite of a bull market and may be accompanied by a general economic downturn, such as a recession.

What is a bull market?

A bull market is a state of the financial market in which prices are rising or expected to rise. The term "bull market" is most commonly used to refer to the stock market, but can be used for anything traded, such as bonds, real estate, currencies and commodities. Because securities prices rise and fall essentially continuously during trading, the term "bull market" is generally reserved for longer periods in which a large proportion of securities prices rise. Bull markets usually last months or even years.

What is leverage?

Using leverage means that you trade more funds than you have in your account. For example, a 1:10 leverage will allow you to trade up to ten times the capital invested in the trading account. It is important to realize that using a leverage can increase your potential gain / deepen your potential loss. Brokers with a European license provide clients with a maximum leverage of 1:30.

What is a "Lot"?

The number of units of a financial instrument purchased on the stock exchange has an important role in the financial market. The standardized unit for trading assets (securities, oil, forex) is a lot. In the stock market, 1 lot usually represents 100 shares of a given company. The size of one lot is determined by the exchange on which it is traded. Some forex brokers also allow you to trade smaller volumes, such as minilots (0.1 lots) or microlots (0.01 lots).

What is the S&P 500?

The S&P 500 or Standard & Poor’s 500 is the most frequently monitored index and is considered an indicator of the US economy. It is a selection of the 500 largest publicly traded companies in the United States. It is one of the most important stock indices in the world. You can often hear people talking about "defeating the market". The market in this case means the S&P 500. For example, if S&P grew by 13 percent in one year, but your stock portfolio increased by 17 percent in the same year, you beat the market by 4 percent.

What is an exchange rate

The exchange rate is the value of the currency of one country against the currency of another nation or economic zone. Most exchange rates are freely floating and will rise or fall based on market supply and demand.

What can I imagine under the term foreign exchange market?

The foreign exchange market (also known as the forex / FX / currency market) is an over-the-counter (OTC) global market that determines the exchange rate for currencies around the world. Market participants can buy, sell, exchange and speculate on the exchange rates of different currency pairs.

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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.