Trading Basics
Cut and Reverse
When a position is fully reversed and an opposing position taken in a single trade.
Other Trading Basics
Carry Trade
A forex trading strategy of borrowing funds in a low-interest rate currency and buying assets in higher yielding currency.
For years this was selling Yen to buy Dollars.
Basis Point
A basis point is 0.01% and is typically used when quoting interest rate changes.
A move of 0.25% is described as 25 basis points.
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%.
Start learning
Learn the skills needed to trade the markets on our Trading for Beginners course.
