What is a Trading Strategy? A trading strategy is a fixed plan for buying and selling securities designed to generate a profitable return on the investments. It should be objective, consistent, quantifiable, and verifiable. The strategy is founded on fundamental or technical analysis so that inevitable systemic risks do not lead to catastrophic effects on financial…
What is Trading Software? Trading software are computer programs that traders use to trade and analyze financial products such as currencies, stocks, bonds, and derivatives over a network with a financial intermediary, which can be a broker, market maker, or stock exchange. Investors can use trading software to place trades from any location. Trading software…
What is a Trading Range? A trading range is the vertical price movements between a resistant ceiling and a support floor for a period of time. Trading range often occurs in all financial markets in which the price resistance is provided by the top of a security’s trading range, while the price support is offered…
What is a Trading Partner Agreement? A trading partner agreement is a contract that binds two parties to engage in a commercial transaction. It stipulates terms of trade, including how partners will interact, fees or duties, and the general terms and conditions. Trading partner agreements are common in healthcare and credit reporting firms. Understanding Trading…
What is a Trading Plan? A trading plan refers to a systematic approach used to identify and trade securities based on several variables, such as investment objectives, risks, and time. A trading plan lays out procedures and conditions under which to search for asset classes and execute trades. The underlying elements of a trading plan…
What is a Trading House? A trading house is a business that facilitates trade between two countries – i.e., a foreign country and a home country. It provides a service that eliminates trading barriers to enter into foreign markets, especially for small companies with limited resources or import or export capability. Trading houses promote both…
What is a Trading Desk? A trading desk is a department within a company or investment bank where securities are sold and purchased to provide market liquidity. Some of the securities traded on trading desks include stocks, bonds, commodities, and currencies. Firms with trading desks can add value to their portfolio by supplying expertise in…
What is a Trading Platform? A trading platform is an online trading system that uses computer software to execute trades in a networked environment. Trading platforms can be utilized for free or at a discount, depending on the financial intermediary. With trading platforms, traders and/or investors can maintain funded accounts and conduct securities trades. The…
What is a Trading Curb? A trading curb is a temporary trading halt imposed in an effort to reduce market volatility and massive panic sell-offs. It is also called a circuit breaker and is instituted to reduce market volatility and information asymmetry by giving traders enough time to respond with full information. Amid extreme market…
What is a Trading Channel? A trading channel is a chart pattern highlighted by two parallel lines bordering resistance and support within which a security trades during a period. Within a valid uptrend trading channel, an opportunity to buy into the uptrend is indicated by subsequent bounces up off the support level at the point…
