Reference · Glossary

Trading glossary

An English glossary of the terms you encounter on broker sites, in our reviews and in tutorials. Short, factual and linked to related terms where needed.

Updated 20-04-2026

Costs & fees

Trading costs: Fee a broker charges per order (can be fixed, a percentage or a combination). Also called: transaction costs, commission.
See also · Spread · Slippage
Spread: The difference between the bid and ask price of an instrument. A wider spread means a higher effective transaction cost, especially for illiquid assets.
See also · Slippage
Slippage: The difference between the expected execution price and the price actually achieved. Often higher on market orders in thin markets or around news events.
Inactivity fee: Periodic charge some brokers levy when you have not traded for a long time (e.g. €10 per quarter). Check the broker review for the exact threshold.
See also · Trading costs
Custody fee: Annual charge for holding positions in foreign markets. DEGIRO is well known for this model; many other Dutch brokers do not charge a custody fee.
FX conversion fee: Cost when trading in a currency other than your account currency. Typically 0.10–0.50% per conversion. Can add up with frequent US stock trading from a EUR account.
Stamp duty: Tax on foreign purchases in certain jurisdictions (e.g. UK stamp duty 0.5% on shares). Relevant for Dutch investors buying UK shares.
See also · Stamp tax

Regulation & supervision

AFM: Autoriteit Financiële Markten — the Dutch financial market supervisor for financial products and services. Regulates Dutch investment firms and maintains the public register.
DNB: De Nederlandsche Bank — prudential supervisor. Oversees the solvency and capital requirements of financial institutions.
BaFin: Bundesanstalt für Finanzdienstleistungsaufsicht — German financial supervisor. Relevant for EU brokers holding a German licence (e.g. DEGIRO via Flatex Bank).
FCA: Financial Conduct Authority — UK regulator. Not equivalent to the AFM for Dutch visitors; UK investor compensation does not apply automatically.
MiCA: Markets in Crypto-Assets — EU crypto regulation (phased in 2024–2025). Requires registration and consumer protection for crypto service providers.
See also · MiFID II
MiFID II: EU directive for investment firms. Governs product governance, suitability assessment, transparency and best execution. Does not apply to Daytraders.nl (we are not an investment firm) but does apply to the brokers we review.
Wft: Wet op het financieel toezicht — the Dutch act that codifies financial services regulation. As a content publisher, Daytraders.nl does not fall under the Wft.
Investor Compensation Scheme (BCS): Guarantee scheme for clients of insolvent Dutch investment firms. Covers up to €20,000 for investment losses. Does not automatically apply to foreign brokers or crypto.

Order types

Market order: Order to trade immediately at the best available price. Fast, but susceptible to slippage in volatile markets.
See also · Limit order · Slippage
Limit order: Order to trade only at a specified price or better. Slower than a market order but carries no slippage risk (though it does carry execution risk).
See also · Market order
Stop-loss: Automatic exit order that closes a position once the price hits a predefined level. Core tool in risk management.
See also · Trailing stop
Trailing stop: Stop-loss that moves with favourable price movement but does not reverse when the price turns. Locks in profit without manual adjustment.
Take-profit: The counterpart to stop-loss: an automatic close order at a profit level. Combined with a stop-loss it fixes your risk/reward ratio in advance.

Asset classes

Share: Proof of partial ownership in a company. Entitles the holder to dividends and voting rights. Traded on exchanges (AEX, NYSE, NASDAQ, etc.).
ETF: Exchange-Traded Fund — a listed investment fund that tracks an index, sector or basket of assets. Core building block for diversified long-term investing.
See also · Share · Core selection
Bond: Debt security issued by a government or company. Pays periodic interest (coupon) and repays principal at maturity. Less volatile than shares.
Option: Contract giving the right (not the obligation) to buy (call) or sell (put) an underlying asset at an agreed price within a set period.
See also · Strike · Premium
Future: Obligation to buy or sell an asset on a future date at a price agreed today. A leverage instrument; widely used in prop trading.
Crypto assets: Digital assets on blockchain infrastructure (Bitcoin, Ethereum, etc.). High volatility, partially regulated under MiCA since 2024.
See also · MiCA

Trading concepts

Position sizing: Determining how much capital to put into a single trade. Core of risk management — usually expressed as a percentage of the account (1–2% per trade is the convention).
See also · Risk per trade
Risk per trade: The maximum amount you are willing to lose on a single trade. Formula: position size × stop distance = risk. See our Risk-Per-Trade calculator.
Drawdown: Percentage decline from a peak value. At prop firms it also refers to the fixed floor you must stay above (e.g. 'max 4% trailing drawdown'). Breaching it means losing the account.
Risk/Reward: Ratio between potential loss (stop distance) and potential gain (target distance). R:R of 1:2 = for every €1 risked, you target €2 in profit.
Win rate: Percentage of trades that produce a profit. Less important than risk/reward — a 40% win rate at 1:3 R:R is more profitable than 60% at 1:1.
Leverage: Trading with more capital than you have, borrowed from the broker or inherent in the product (futures, options). Amplifies both gains and losses proportionally. High risk for beginners.

Prop firm jargon

Evaluation fee: One-off or monthly cost to participate in a prop firm evaluation. You are buying the right to try to meet the firm's rules in exchange for a funded account.
Profit split: Percentage distribution of profits between the trader and the firm on a funded account. Typically 80/20 → trader, rising to 90/10 at the highest tiers.
Consistency rule: Prop firm rule stating that no single trading day may account for a disproportionate share of total profit (e.g. no more than 40% in one day). Prevents gambling.
Trailing drawdown: Drawdown limit that moves with your account's high-water mark. Key difference from a static drawdown: after a profit peak, the floor also tightens.
Scaling plan: Agreement whereby successful traders are given progressively larger accounts (e.g. account doubles after 2 consistent payouts).