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Trading Lingo

What is Stock Trading:

Stock trading involves buying and selling stocks frequently in an attempt to time the market. The goal of stock traders is to capitalize on short-term market events to sell stocks for a profit, or buy stocks at a low.

Important Trading Terms:

A broker is an individual or firm that acts as an intermediary between an investor and a securities exchange. When you invest, you may have to go through a broker to purchase a security like a stock.

The stock market is a market where shares of companies are bought and sold. This is formed by stock exchanges, like the New York Stock Exchange (NYSE) or Nasdaq.

In the United States, the stock market opens at 9:30 A.M. EST (UTC-5:00) every day. It’s based on the trading hours of the Nasdaq and NYSE exchanges. Pre-market trading hours begin at 4:30 A.M. EST, but most traders don’t begin paying attention until about 8 A.M..

The NYSE and Nasdaq close at 4 P.M. EST., with after-hours trading continuing until 8 P.M.. The close simply refers to the time at which a stock exchange closes for trading.

The bid is the amount of money a trader is willing to pay per share for a given stock, or what you are willing to pay to buy. It’s balanced against the ask price, which is what a seller wants per share of that same stock like how much money you want to gain from selling, and the spread is the difference between those two prices.

A bull market is a market condition where stock prices are continually rising. It goes upwards like a bull, hence the name.

A bear market is when stock prices continually fall. It is also the opposite of a bull market. It goes downwards like a bear.

Forex is short for foreign exchange. The term refers to the global trading of currencies which is usually traded by pairs of different currencies.

Written by Anna Li

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