Confusion between technical terms

Beginner Questions
#1

Hello guys!

Basicaly, I guess there’s 3 types of negociation in financial market:

  1. Buy and sell — [B]???[/B]

  2. [B]???[/B] and [B]???[/B] — CFD

  3. call and put — Options

Do you and undestand my analogy above? Humm?

In 1) I want mean to buy and sell in tradicional term of the word. Buy a cheap stock, hold and sell when it grow up;

In 2) I want mean to bet that active’s value will grow up or down.

About 3), I haven’t doubts about the technical terms.

I guess that terms in 1 and 2 are mixed in the day-to-day of a trader. But the first type of trade is not equal to second.

#2

You forgot ‘Long’ and ‘Short’. :slight_smile:

I am a bit worried that you get stuck in the details. As we are CFD forex I advise to use Buy and Sell as the brokers use this as well. The Buy and Sell are generic and used for stock, forex, commodities etc. And for options: You aren’t saying ‘I will go “Call”’ but rather ‘I buy a PUT option’. Call and Put says more about the product you are entering into than the action that you are taking.

So I would rather use ‘Buy’ or ‘Sell’ as that is most commonly used. But going Long in CFD forex is (almost) equal to buying a put option on a stock as you expect the price to rise.

#3

Sorry, but your explanation is like an incomplete crossword.

Long, short, call, buy, put, call, omg! :34:

Edit: Detail: In the pratice, exist only 2 ideias, buy and sell. But in theory, there’s 4 ideas, because exist 2 types of sell and 2 types of buy. In the MT4, all these ideias seems mixed with others techincal names.

So, the number the variables and technical terms in the practice is bigger yet!

Long, short, call, buy, put, call, open, close, bid, ask, base currency, quote currency, etc, etc.

All these words appear combined for form another ideias more complicated yet! :34: :34:

#4

To make your live easier just sign up for the BabyPips school, there you will have the opportunity to learn and understand all of your confusions.

#5

You already thought if St Thomas Aquinas answered all the doubts with: “Go read the Bible, all answers is in the Bible!”?

#6

Long/call= buy
short/put= sell
open= opening of the price (open of the day)/opening of the trade - can reffer to both
close= closing of the price (close of the day) / closing of a trade - can reffer to both
bid= the actual price of the underlying security
ask= the price you pay including spread (spread is what broker own their money on + plus optional commision)
Commission= fee you pay on a transaction
base currency= is the currency into which relation the traded currency is beeing measured
quote currency= see base currency and turn it around

#7

I know the defition of all these terms, the problem is when these appears combined and contextualized. For example, in some online platform exist a option called stop and limit that is different of the stop and limit of the MT4. In MT5, exist buy stop limit and sell stop limit with functions differents but with the same name.

The definition of ask is "price of selling for buy"
bid: “price of buying for sell”

So, if you have USD and I have EUR and we want exchange we money, who is the seller and who is the buyer (me and you, I know)? So who will pay the price of selling? Or the price of buying?

Do you understand? This concepts in financial markets are very bad explained!

#8

Bro, with all due respect, have you even bother to read your broker, a broker or any broker PDS.

All these things are explained in detail there.

But please forget this concept that your are a buyer or seller. It doesnt work like that.

You are a punter down the track. Your broker is your bookie. You are placing a bet with you broker. They are always your conterparty. You are betting whether you think the price will go up (long) or the price is going down (short).

Don’t over contemplate it.

#9

Yeah! This I understand! But all answers that I received are just isolated pieces of a big puzzle. I’m trying set the puzzle! And this implies in make analogies and make questions.

In my mind, I’m thinking something like this:

PS: I’m so sorry if I’m being boring, it isn’t my intention!

#10

Your mind is a wonderful place bro.

So I ask again have you ever read a PDS.

#11

The missing terms there would be “bet”.

CFD’s - just like spreadbetting, of which they’re a variation, really - are not dealing/trading in an underlying security/instrument at all: they’re having a side-bet with someone about its future valuation (usually as defined by the party against whom one bets). It’s an important conceptual distinction, I think.

#12

Seconded. :slight_smile:

#13

In the spot forex market (what we all do here, pretty much),

you buy a pair by selling another, although to you it is just buying;

the reverse is true of selling a pair;

in the currency futures market, on the other hand, you only buy or sell

an individual currency contract.

EXAMPLE:

when you buy EUR/USD in spot forex, you are simultaneously betting on the USD losing value,

effectively selling the USD at the same time as buying EUR;

when you go to the currency futures market, you can buy EUR contracts per se, without betting

on a second currency losing value against EUR…

This means, for example, that in spot forex you cannot be bullish the EUR at the same time as the USD

if you buy EUR/USD, obviously; in currency futures, on the other hand, you could buy EUR contracts

and at the same time also buy USD contracts, if you think that they will both rise.

That, basically, is what I wanted to add…

Now I will go back to my cave,

and resume Zen meditation over my GBP/NZD long exposure.

Happy Trading. :slight_smile:

#14

You certainly have the avatar to match! :wink:

#15

The transformation is now complete :slight_smile:

#16

You aren’t boring just blunt.

If the answers that you are getting aren’t the ones that you are looking for your question may not be the one you need to ask (or differently).

When I look at your table I can see where you are wrong but it takes longer to answer to that then I’d like to do for you.

CFD Entry = Long or Short… Well I am out. You are not even grasping the basic concept and you want us to spoonfeed you.

#17

Why have you changed your username?
I didn’t even know that was possible