Glossary - D

DAY ORDER
An order that will be filled during the day's trading session or canceled.
 
DAY TRADER
A trader who establishes and closes his positions within one day's trading. He ends the day with no open positions.
 
DEALER
Any person (natural or legal person) acting as a principal or counterparty to a transaction.
 
DEFLATION
Deflation is a decrease in the general price level of goods and services.
 
DERIVATIVES
A derivative instrument is a contract between two parties that specifies certain conditions in particular, dates and the resulting values of the underlying variables under which payments, or payoffs, are to be made between the parties. The term "Derivative" indicates that it has no independent value, i.e. its value is entirely "derived" from the value of the underlying asset. The underlying asset can be securities, commodities, bullion, currency anything else. A CFD is a derivative.
 
DIRECT MARKET ACCESS
Direct Market Access (commonly shortened to DMA) is a term used in financial markets to describe electronic trading facilities that allow traders wishing to trade in financial instruments a way to interact with the order book of an exchange.
 
DISCOUNT TO CASH
The amount by which the future is below the actual current market price.
 
DIVERGENCE
When the price of an asset and an indicator, index or other related asset move in opposite directions. In technical analysis, traders make transaction decisions by identifying situations of divergence.
 
DIVIDEND
Dividends are payments made by a company to its shareholders.
 
DOJI
This is a commonly found pattern in a candlestick chart. It is characterized by being small in length—meaning a small trading range—with an opening and closing price that are virtually equal. The doji represents indecision in the market. A doji is not as significant if the market is not clearly trending, as non-trending markets. If the doji forms in an uptrend or downtrend, this is normally seen as significant, as it is a signal that the buyers are losing conviction when formed in an uptrend and a signal that sellers are losing conviction if seen in a downtrend.
 
DOUBLE TOP/BOTTOM
A chart formation which may signal a possible trend reversal. A double bottom would look similar to a W whilst a double top would look similar to an M.
 
DOWNTREND
Derived by a series of lower highs and lower lows.
 
DRAWDOWN
The equity reduction in a trading account. The maximum drawdown is the largest difference between a relative equity peak and any subsequent equity low. Low draw downs are a desirable performance feature for a trader.