A — Trading Terms Starting With A
Explore trading terms beginning with A, including account values, market prices, volatility indicators, asset classes, averaging methods, and performance concepts used by traders.
Trading terms beginning with A
Select a card for the complete definition, purpose, usage, example, journal workflow, common issues, and FAQs.
Account Balance
Account balance is the total amount of money recorded in a trading account after completed trades, deposits, withdrawals, fees, and other settled adjustments have been included. It normally excludes unrealized profit or loss from currently open positions, which means it may remain unchanged while equity moves.
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Account equity is the current real-time value of a trading account after unrealized profit and loss from open positions are added to the settled account balance. It changes continuously while trades remain open and is a key measure of current risk.
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Alpha measures the return produced by an investment or trading strategy beyond what would be expected from a benchmark or level of market risk. Positive alpha suggests outperformance, while negative alpha suggests underperformance.
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Arbitrage is a trading method that attempts to profit from price differences between the same or closely related assets in different markets. The trader buys where the asset is cheaper and sells where it is more expensive.
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The ask price is the lowest price at which a seller is currently willing to sell an asset. A trader opening a buy position with a market order normally pays the ask price.
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An asset class is a group of financial instruments that share similar characteristics, market behaviour, risk drivers, and regulatory structures. Common examples include equities, bonds, commodities, currencies, and cryptocurrencies.
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Average True Range, or ATR, is a technical indicator that measures market volatility by averaging true range over a selected number of periods. It does not indicate direction; it shows how much price is moving.
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Averaging down means adding to a position after price has moved against the original entry, reducing the average purchase price. It can improve breakeven price but also increases exposure to a losing idea.
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Averaging up means adding to a position after price has moved in the intended direction. It is often used in pyramiding strategies to increase exposure as the market confirms the original trade idea.
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