Trading Basics
Balance of Payments
Also BoP. This is the difference between payments into or out of a country. It can be negative or positive and is used by traders in fundamental analysis.
Other Trading Basics
Bid
Traders can go short at the bid price.
The terminology is from the broker point of view, they are bidding to buy from you.
Alpha
This is a measure of price performance vs a benchmark.
If a trader makes 10% per annum and the index makes 7% the trader has an alpha of 3%.
Bear Market
A Bear Market occurs when the price of a security is falling, and the negative outlook of the security causes the security’s price to continue to fall, causing a self-sustaining problem.
For a downturn like this to be officially considered a bear market, it must be on-going for longer than two months, otherwise it is known as a correction.
Bears are generally traders with a pessimistic view on markets that look to profit from a decline in prices.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.