Forex Trading Course - Part 1.7
In this lesson, you will be learning some of the basic trading terminology you will be using and seeing regularly in the trading world.
Bulls/Bullish - Bulls and bears is probably the most common term
you will have heard when referring to any form of trading. The
bulls are the traders that are buying the market. It is an easy way
to describe your market sentiment. If I thought that the price was
going to increase, I would be bullish. You will also hear the term
bull market which refers to a market that had been steadily
increasing for a sustained period of time.
Bears/Bearish - This is the opposite to bulls/bullish. Bears are the
traders that are selling the market. If my sentiment was bearish,
I would believe that price is going down. A bear market refers to a market that has been steadily decreasing for a sustained period of time.
Long - Going 'long' does not refer to the length of the trade that you are taking. It simply means you are buying the market.
Short - As you can probably guess, going 'short' is the opposite to going long! Therefore, going short means you are selling the market.
Dovish - When talking about something being dovish, you would usually be referring to the actions of a government or central bank. A monetary policy aimed towards stimulating economic growth would be considered Dovish. The most common use of this term is in regards to an interest rate decision. If the interest rate goes down, this would be considered a dovish move.
Hawkish - Hawkish is the opposite of dovish. Therefore, a government or central bank using monetary policy to slow the economy would be considered Hawkish. They would usually do this to maintain control of inflation - which occurs in an economy that is growing. They could use interest rates as a tool to help steady inflation.
Dovish and Hawkish are two terms that are a little harder to get your head around but we will cover this in more detail later in the course when you come across the interest rates lesson!
There are different types of traders in the markets. These are:
Scalpers - These are highly active traders who hold trades for anything from a few seconds to a few minutes. They enter and exit lots of trades daily with the aim of making a small profit many times.
Day traders - Day traders will hold their trades from anything between a few minutes to a few hours but won't hold their trades overnight.
Swing traders - Swing traders take slightly longer term trades, holding their trades for between a couple of days to a few weeks.
Position traders - These traders are long term traders that will hold their trades for a few weeks, months or maybe even years!
If I had to recommend somewhere for you to start, I would recommend either day trading or swing trading.