FAQ Category: The Live Trade Room

What is a contract in trading?

The term Contract is used by some Spread Bet and CFD brokers to denote the unit size of an underlying market. Forex markets usually have a Contact Unit size of $100,000. Traders need to know how to convert Contracts so that they know exactly how much they are risking on each trade.

What is a tick in trading?

The term Tick is the smallest possible price movement of a market to the right of the decimal point. Ticks prior to market decimalisation were 1/16 of a dollar. CFD and Spread Bets brokers do not generally use Ticks and most markets will move in either Points or PIPS. The term Ticks is still used …

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What is a point in trading?

The term Point is the smallest value of a market to the left of the decimal point. Index markets are usually priced in points. With CFD and Spread Bets brokers this usually the smallest value that is traded. Generally, we use the term Points when trading Index markets because brokers of these markets price the …

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What is risk in trading?

In trading we use the word “risk” often. Here it’s important to understand that we are defining risk as the amount risked per trade – this is the full amount lost if the stop is hit.

What is a Pip in trading?

The term PIP stands for a Point In Percentage.  It is the smallest value of a market to the right of the decimal point. With CFD and Spread Bets brokers this usually the smallest value that is traded.

What is the secret to trading – the holy grail?

In our Master Trader training series, we explain the “Secret to Successful Trading”, and it’s too much of a spoiler to give you the short version now: its understanding and accepting a loss. It’s definitely, absolutely not finding a “Holy Grail” strategy. There is no such thing. You become a trader when you accept this fact.

How do I add to winning trades?

Adding to a winning trade can significantly increase profits. This should be done only if the market has a valid trade strategy set-up at the addition point.