Academy
Trading & Finance Explained
Clear, jargon-free explanations of the terms every trader and investor should know — across stocks, crypto, currencies, the economy, and long-term investing.
41 explainers across 8 topics — free, no sign-up
Trading Basics7
The mechanics every trade relies on, whatever you are trading.
LeverageLeverage lets traders control a position worth more than their deposit by borrowing from a broker. It amplifies both potential gains and potential losses.Read definition SpreadThe spread is the difference between the bid price (the price buyers pay) and the ask price (the price sellers receive). It is the primary transaction cost in forex and CFD trading.Read definition Lot SizeA lot is the standard unit of measurement for a trade in forex. A standard lot equals 100,000 units of the base currency; mini and micro lots are 10,000 and 1,000 units respectively.Read definition PipA pip (percentage in point) is the smallest standard price move quoted in most forex pairs — typically the fourth decimal place, or 0.0001. It is the unit traders use to measure price change and calculate profit or loss.Read definition Market Order vs Limit OrderA market order executes immediately at the best available price; a limit order only executes at your specified price or better. The choice between them involves a trade-off between certainty of execution and certainty of price.Read definition Going Long vs ShortGoing long means buying an asset in the expectation that its price will rise; going short means selling an asset you do not own (borrowing it first) in the expectation that its price will fall.Read definition Candlestick ChartsA candlestick displays the open, high, low, and close price of an asset for a defined time period. The pattern of consecutive candles is one of the most widely used tools in technical analysis.Read definition
Markets4
How prices move, and the conditions that make them move faster.
VolatilityVolatility measures how much an asset's price fluctuates over a given period. High volatility means larger price swings; low volatility means a calmer, more predictable price path.Read definition LiquidityLiquidity describes how quickly and easily an asset can be bought or sold without significantly moving its price. Highly liquid markets offer tight spreads and fast execution; illiquid markets can have wide spreads and unpredictable slippage.Read definition Bull MarketA bull market is a sustained period of rising asset prices, generally characterised by broad optimism, strong economic conditions, and investor confidence. The term is commonly applied to equities, but also to forex, crypto, and commodities.Read definition Bear MarketA bear market is a prolonged period of falling asset prices — conventionally defined as a decline of at least 20% from a recent peak — accompanied by widespread investor pessimism.Read definition
Stocks7
Company ownership — what a share is, and what it is worth.
Stocks & SharesA share is a unit of ownership in a company. Owning shares makes you a part-owner, entitled to a portion of the company’s profits and, usually, a vote on major decisions.Read definition DividendA dividend is a share of a company’s profit paid out to shareholders, usually in cash and usually on a regular schedule. It is a return you receive without selling your shares.Read definition P/E RatioThe price-to-earnings ratio compares a company’s share price to its earnings per share. It is a shorthand for how much investors are paying for each unit of profit.Read definition Market CapitalisationMarket capitalisation is the total market value of a company’s shares — the share price multiplied by the number of shares outstanding. It is the standard measure of company size.Read definition IPOAn initial public offering is the first sale of a company’s shares to the public, turning a privately held business into a listed one that anyone can buy into.Read definition ETFAn exchange-traded fund is a basket of assets that trades on an exchange like a single share. One purchase gives you exposure to everything inside the basket.Read definition Stock IndexA stock index tracks the combined value of a selected group of companies, giving a single number that represents how that slice of the market is performing.Read definition
Crypto6
Digital assets, the networks behind them, and where they trade.
BlockchainA blockchain is a shared record of transactions maintained by many computers at once, where each new block of entries is cryptographically linked to the one before it.Read definition BitcoinBitcoin is the first cryptocurrency — a digital asset transferred directly between users over a public network, with no bank or government issuing or clearing it.Read definition StablecoinA stablecoin is a cryptocurrency designed to hold a steady value, usually by tracking a currency such as the US dollar one-for-one.Read definition Crypto Exchange (CEX vs DEX)A crypto exchange is where digital assets are bought and sold. Centralised exchanges hold your funds and match orders internally; decentralised exchanges let you trade directly from your own wallet.Read definition Crypto Wallet & Private KeysA crypto wallet stores the private keys that prove ownership of your assets. The coins live on the blockchain — the wallet holds the credentials that let you move them.Read definition AltcoinAltcoin is a catch-all term for any cryptocurrency other than bitcoin — thousands of assets with wildly different purposes, designs, and levels of substance.Read definition
Forex3
Currency pairs and the quoting conventions specific to them.
MarginMargin is the deposit a broker requires you to maintain as collateral to open and hold a leveraged position. It is not a fee — it is the portion of your account equity set aside to cover potential losses.Read definition Forex & CFDsForex (foreign exchange) is the global market for trading currencies. A CFD (Contract for Difference) is a derivative product that lets traders speculate on price movements across assets — forex, indices, commodities, shares — without owning the underlying asset.Read definition Bid & Ask PriceThe bid price is the highest price a buyer is willing to pay for an asset; the ask (or offer) price is the lowest price a seller will accept. The difference between them is the spread.Read definition
Economy5
The macro forces that set the backdrop for every asset class.
InflationInflation is the rate at which prices rise across an economy over time. As it climbs, each unit of currency buys less than it did before.Read definition Interest Rates & Central BanksA central bank sets the benchmark interest rate — the price of borrowing money in an economy. It is the single most powerful lever over growth, inflation, and asset prices.Read definition GDPGross domestic product is the total value of everything an economy produces in a period. It is the standard headline measure of economic size and growth.Read definition RecessionA recession is a significant, broad decline in economic activity lasting more than a few months, typically marked by falling output, rising unemployment, and weaker spending.Read definition Bonds & YieldsA bond is a loan you make to a government or company in exchange for interest. Its yield is the return you actually earn at the price you paid — and it moves inversely to that price.Read definition
Investing5
Holding for the long run rather than trading the short one.
DiversificationDiversification means spreading money across investments that do not all move together, so that a bad outcome in one does not take the whole portfolio with it.Read definition Compound InterestCompounding is what happens when your returns start earning returns of their own. Over long periods it is the dominant driver of investment growth.Read definition Dollar-Cost AveragingDollar-cost averaging means investing a fixed amount at regular intervals regardless of price, rather than committing everything at a single moment.Read definition Asset AllocationAsset allocation is how a portfolio is divided between broad categories such as equities, bonds, and cash. It shapes returns more than the choice of individual holdings.Read definition Risk vs ReturnHigher expected returns come with greater uncertainty. Any investment promising high returns with no risk is misunderstood or misrepresented.Read definition
Risk4
Protecting capital, and knowing who you are dealing with.
Stop-LossA stop-loss is a pre-set order that automatically closes a position when the price reaches a specified level, limiting the maximum loss on that trade. It is one of the most important risk-management tools available to traders.Read definition Take-ProfitA take-profit order automatically closes a position when the price reaches a specified profit target. It locks in gains without requiring the trader to monitor the market continuously.Read definition Broker RegulationBroker regulation means a financial authority oversees the broker's operations, enforcing rules on client-fund segregation, capital requirements, fair pricing, and complaint handling. Trading with a regulated broker provides meaningful protections that unregulated brokers cannot offer.Read definition What Is a Broker?A broker is an intermediary that provides traders and investors with access to financial markets. In exchange for this access, brokers charge a fee — typically via spreads, commissions, or both.Read definition