Trading Skills

Trading is different from investing, usually focused on more short-term movements in markets. Learn the essentials you'll need to know to be a successful trader.

Frequently Asked Questions
  • What is a stock?

    A stock is a security that represents the ownership of a part of a company; it is also commonly referred to as a share, or equity, in the company. Stocks can be bought and sold on the open market via stock exchanges, and those transactions are governed by various regulations meant to protect the investing public.

  • What is Volume-Weighted Average Price (VWAP)?

    Also known as the VWAP, the Volume-Weighted Average Price is a trading benchmark that is used by traders to see the average price that a security has traded through the day, in both volume and prices of trades.

  • What is a limit order?

    A limit order is a kind of order that an investor makes when he or she wants to buy or sell a stock at a specific price. The two types of such orders are a buy limit order, whereby the order will be placed at the limit price or lower, and the sell limit order, where the order will be executed at the limit price or higher.

  • What is the risk/reward ratio?

    The risk/reward ratio is used by investors to measure the prospects of reward for their investments over the potential risk of losing that capital. The ratio helps assess the expected return and risk of a given trade.

Key Terms
Asset management/Stethoscope on money
What Is Money Management?
Funds Management
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Absolute Return vs. Relative Return: What's the difference?
Bidder
Businessmen are analyzing the investment.
Retrocession
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Exit strategies: A key look
Portfolio Margin
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Fill Definition
Midsection Businessmen Analyzing Charts On Laptop In Office
Futures Prices Converge Upon Spot Prices
Woman Checking Stocks and Shares Data With Smartphone in City
Batting Average
Free Tools To Help You Manage Your Money
Futures Trading
Are Micro E-Mini Futures 'the Next Big Thing'?
Ultimate Trading Guide
How to Develop an Effective Trading Strategy
Hero
Trader Definition
Signatory
Endorser
Offer
What Is the Left Hand Side (LHS) in a Forex Transaction?
Manager buying cryptocurrency through mobile phone app
Best Options Trading Courses of 2022
Buying Power Definition
Illiquid Definition
Understanding Investors
What Is Liquidity?
What Is Notional Value?
Short Squeeze
Speculation
Trading in the Pre- and Post-Market Sessions
Spot Rate
Spot Market
Know Your Shareholder Rights
Average Daily Trading Volume - ADTV Definition
What Is a Breakeven Point (BEP)?
Clearing
Proprietary Trading Definition
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Shareholder Activist
Short Covering Definition
How Big Is a Tick Size?
Underlying Asset Definition
woman at desktop looking at financial charts
The Difference Between a Drawdown in Banking vs. a Drawdown in Trading
Cross Trade Definition
Understanding Delivered Ex Ship (DES) and its Requirements
Slippage Definition
Close Position Definition
Sinking Fund Method Definition
Upside
Trade Signal Definition
How to Pick a Stock: Basic Best Practices for New Investors
What Is Notional Principal Amount?
What Is Price Discovery?
Midsection Businessmen Analyzing Charts On Laptop In Office
Securities Market Structures: An Introduction
What Is a Break-Even Price?
The Myth of Profit/Loss Ratios
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Schaff Trend: A Faster And More Accurate Indicator
Ex-Ante Definition
Speculator Definition
Spot Price Definition
Tick Definition
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The Core Role of a Central Counterparty Clearing House—CCP
What Does Thinly Traded Mean?
Coin stacks stepping down graph with red arrow and percent icon.
What Is Stock Dilution?
Long-Term Charts
Alternative Trading System (ATS) Definition