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Glossary Of Trading
Lagging Indicator
A fundamental indicator that changes after the economic conditions it describes or a technical indicator that follows price movements. Moving averages and quarterly earnings are lagging indicators.
Leading Indicator
An indicator used to forecast an economic change. PMIs and bond yield curves are examples of leading indicators.
Leverage
An investment provided by a broker or other provider alongside an investor’s investment, enabling the trader to place a position of a higher value than his/her principal would otherwise allow. Leverage is quoted as the ratio between the trader/investor's principal (margin) and the broker’s investment.
Limit Order
A pending order that enables an investor to buy or sell an asset once it reaches a pre-defined price.
Line Chart
In finance, a 2-dimensional plotting of value over time.
Liquidity
The availability of an asset. A liquid market entails a high number of bids and offers, low volatility and (consequently) lower spreads.
Long Position
A position that is profitable (in the money) if an asset’s value rises.
Lot
An amount or measurement. In forex – a standard unit of 100,000 currency pair units.