Trading Glossary

Interest or costs that accumulate on an open position daily before they are paid or charged.

A change to an existing trade or position, such as modifying stop levels, position size, or contract terms.

Authority for the Financial Markets - The Netherlands' financial regulatory authority.

Trading that happens outside standard market hours, typically with wider spreads and lower liquidity.

The total combined risk exposure across all open positions and instruments in a trading portfolio.

Autorité des Marchés Financiers - France's financial markets regulator.

A company yearly financial disclosure used to judge its fundamentals and earnings quality.

Simultaneously buying and selling the same asset in different markets to lock in a price gap.

Australian Securities and Investments Commission - Australia's top-tier financial regulator.

The price at which a seller is willing to sell a security. Also known as the offer price.

ATR measures average price range over a period, giving traders the volatility figure to size positions and set stops.

Forex slang for the Australian Dollar (AUD) or AUD/USD currency pair.

Rules executing without hands: EAs, bots and algos trading your plan at machine speed.

Adding to a losing position to lower the average entry price, which also raises risk.

Backtesting runs a strategy against historical data to measure its edge before risking live money - garbage in, garbage out.

Federal Financial Supervisory Authority - Germany's top-tier financial regulator.

Balance is your account value excluding open positions - realized profit and loss only, before floating moves are counted.

The difference between a country exports and imports, a gauge of currency demand.

Japan's central bank, responsible for monetary policy, interest rate decisions, and maintaining financial system stability.

A price chart that shows each period as a vertical bar of open, high, low and close.

A predetermined price level in barrier options that, when reached, activates or cancels the option contract.

The base currency is the first currency in a pair, the one you buy or sell, with the rate showing its price in the quote currency.

One hundredth of a percent: the unit central banks and bond traders think in.

A trader who expects prices to fall, or a market experiencing declining prices.

The price at which a buyer is willing to purchase a security.

The difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (offer/ask).

The first few digits of an exchange rate that dealers omit when quoting prices. For EUR/USD at 1.1050, the big figure is 1.10.

The first and largest cryptocurrency by market capitalisation, created in 2009 as a decentralised digital currency.

Volatility bands around a moving average: squeeze means calm, expansion means motion.

A measurement unit for oil production and consumption. Key metric in energy markets that affects commodity-linked currencies.

A breakout is price moving beyond a range, level or pattern - the start of a new move, or a trap if volume and follow-through are missing.

Non-standard settlement dates in forex that don't match typical market conventions.

The firm standing between you and the market: execution, custody and costs in one relationship.

Industry slang for a dodgy broker that doesnt execute real trades, instead betting against its own clients. Low regulation, high risk.

A trader who expects prices to rise, or a market experiencing rising prices.

The act of exchanging one currency for another. In forex, you always buy one currency while simultaneously selling another.

Forex slang for the GBP/USD currency pair, one of the oldest and most traded pairs.

The right to buy at a set price: leveraged upside with loss capped at the premium.

A price chart showing open, high, low and close as candle bodies and wicks.

The standard exchange rate displayed by banks for retail customers, typically less favourable than interbank rates.

A carry trade borrows in a low-yield currency to buy a high-yield one, collecting the interest difference while holding.

Central Bank of Ireland - Ireland's financial services regulator under EU framework.

When the Commodity Channel Index moves against price, hinting a move may be losing force.

A national institution that manages monetary policy, interest rates, currency supply, and financial system stability.

An agreement among European central banks to coordinate and limit gold sales to prevent market destabilisation.

A CFD is a derivative that tracks an asset's price without owning it - the standard wrapper for retail forex trading.

Commodity Futures Trading Commission - US regulator for derivatives and forex.

A trader who relies on charts and technical analysis patterns to predict price movements rather than fundamentals.

The largest US options exchange and creator of the VIX volatility index, a key barometer of market fear.

Forex slang for the EUR/GBP currency pair, named after the Channel Tunnel.

Cayman Islands Monetary Authority - Offshore regulator with moderate oversight.

Money that has been fully processed and is available for trading or withdrawal.

A trade that has been exited by executing an equal and opposite transaction. Profit or loss is realised when a position is closed.

The process of settling an open position by executing an offsetting trade, ending exposure to price movement.

Comisión Nacional del Mercado de Valores - Spain's securities market regulator.

Commission is a per-trade fee charged by raw/ECN accounts alongside tight spreads - the honest way to price execution.

Raw stuff markets price: energy, metals and crops that move currencies with them.

A document or electronic message confirming the details of a completed trade, including amount, price, and settlement date.

A consistency rule caps how much of your profit can come from a single day, forcing steady rather than lucky results.

Commissione Nazionale per le Società e la Borsa - Italy's securities regulator.

A measure of inflation that tracks the average change in the price of a basket of goods.

CPI measures US consumer price inflation and is the second-most market-moving US release, directly shaping rate expectations.

A derivative product that allows you to speculate on price movements without owning the underlying asset.

Copy trading mirrors another trader's positions automatically - a way to outsource execution while keeping your own account.

Correlation measures how two markets move together, from +1 (identical) to -1 (opposite), and decides whether positions are actually diversified.

What holding costs you daily: swaps, financing and storage between entry and exit.

A benchmark index tracking a basket of commodity prices, widely used as an inflation and economic health indicator.

An exchange rate between two currencies where neither is the domestic base currency.

Money issued by a government, the asset bought and sold in the forex market.

A currency gaining value: good for holders, painful for exporters.

A currency losing value: exporters cheer, importers and holders pay.

Two currencies quoted against each other, showing how much of one currency is needed to buy the other.

A currency pair quotes one currency against another - the base against the quote - and every forex trade is a pair trade.

A fixed exchange rate against another currency, defended with reserves until it breaks.

Cyprus Securities and Exchange Commission - Popular EU regulator for forex brokers.

Private venues where institutions trade size invisibly, away from public order books.

An order that dies at the session close if unfilled: no overnight surprises, by design.

In and out before bedtime: no overnight risk, all intraday execution.

Buying and selling financial instruments within the same trading day, closing all positions before market close.

A person or firm that acts as a principal in transactions, buying and selling financial instruments from their own inventory.

A system or market operating without a central authority. The forex market and cryptocurrency networks are both decentralised.

The upfront collateral exchanges demand before your order works: skin in the game.

Financial contracts whose value is derived from an underlying asset, such as a price or index.

Dubai Financial Services Authority - Regulator for the Dubai International Financial Centre.

When an asset trades below its stated, par or intrinsic value.

Divergence is when price and an indicator move in opposite directions - a warning that the move is losing momentum.

Execution straight into the real order book, no dealer between you and the market.

A doji is a candle with open and close nearly equal, showing indecision and potential reversal at key levels.

The US dollar, the world primary reserve currency and the most traded currency in forex.

The dollar index measures the US dollar against a basket of six major currencies, with the euro weighted most heavily.

Dovish describes a central bank leaning toward rate cuts or looser policy, which usually weakens its currency.

A series of lower highs and lower lows in price, indicating sustained bearish momentum.

The decline from a peak to a trough in account value, measuring the loss from highest to lowest point.

The eurozone central bank in Frankfurt. Its rate calls drive the euro against everything.

An electronic system that matches buy and sell orders directly between participants instead of routing them through a dealing desk.

An economic calendar lists scheduled data releases, central bank meetings and events that move markets, with forecasts and prior readings.

The theory that asset prices already reflect all available information.

A technical analysis theory that markets move in predictable wave patterns of five impulse waves and three corrective waves.

Developing economies with growing financial markets, higher yields, and elevated risk. Key currencies include ZAR, TRY, BRL, and MXN.

An engulfing pattern is a two-candle reversal where the second body completely covers the first, most reliable at key levels.

The total value of a trading account including the balance plus or minus any unrealized profits or losses.

European Securities and Markets Authority - EU-wide regulator setting rules for all member states.

The price of one currency expressed in terms of another.

Investment funds traded on stock exchanges that track an index, commodity, or basket of assets.

How your order actually fills: speed, price and reliability decide real costs.

An automated trading program on the MetaTrader platform that executes trades based on pre-programmed rules.

The last date on which an option or futures contract can be exercised or traded before it becomes void.

The deadline when options and futures live or die: rights end, obligations settle.

A moving average that gives more weight to recent prices, making it more responsive to new data than an SMA.

Everything the market can take from you right now: the true size of your risk.

Financial Conduct Authority - UK's top-tier financial regulator, globally respected.

The federal funds rate is the US benchmark interest rate set by the Fed, and the anchor for dollar pricing across all maturities.

The US central bank. Its rate decisions move every dollar pair, gold and global stocks.

Forex slang for the EUR/USD currency pair, the most traded pair in the world.

Fibonacci retracements map pullback levels at 23.6%, 38.2%, 50% and 61.8% of a move, where trends often pause or reverse.

The price and size your broker actually executed, which is what counts, not what you clicked.

Tradeable assets including currencies, stocks, bonds, commodities, options, and derivatives.

Swiss Financial Market Supervisory Authority - Switzerland's top-tier financial regulator.

Technology-driven innovation in financial services, including mobile trading apps, robo-advisors, and blockchain systems.

An exchange rate set by market supply and demand, the regime behind every major pair.

Financial Markets Authority - New Zealand's financial services regulator.

The FOMC is the Federal Reserve committee that sets US interest rates - the single most important calendar event for the dollar.

Opening the next expiry while the old one still runs: rolling without a gap.

The global decentralised market where currencies are traded.

The global market for trading currencies. The world's largest financial market.

Forex is the market for trading currencies, the largest financial market in the world with $9.6 trillion traded daily in 2025.

A contract to exchange currencies at a pre-agreed rate on a specific future date, used to hedge against currency risk.

A private deal to exchange later at a locked rate: hedging without an exchange.

The pips added to or subtracted from the spot rate to calculate the forward rate, derived from interest rate differentials.

The future date when a forward forex contract will settle and currencies will be exchanged.

Free margin is the equity not locked by open positions - the amount available to open new trades or absorb losses.

Financial Services Authority of Seychelles - Offshore regulator with minimal oversight.

Financial Services Commission of the British Virgin Islands - Offshore regulator.

Financial Services Commission of Mauritius - Offshore regulator in the Indian Ocean.

Financial Sector Conduct Authority - South Africa's financial markets regulator.

Trading the why: rates, data and central banks instead of chart patterns.

A funded account is trading capital provided by a prop firm after you pass its evaluation, run under the firm's rules.

A standardized exchange obligation to buy or sell later: leverage with an expiry date.

The ten most heavily traded and liquid currencies in the forex market.

An order type that remains active until it is filled or manually cancelled by the trader, with no automatic expiration.

Slang term for the USD/JPY currency pair, used by forex traders.

Grid trading places buy and sell orders at regular intervals, profiting from oscillation but exposed to runaway trends.

The total value of goods and services produced within a country during a specific period. A key economic indicator affecting currencies.

Hawkish describes a central bank leaning toward higher interest rates or tighter policy, which usually supports its currency.

Central-bank personalities: hawks hike, doves cut, markets price the flock.

A reversal chart pattern with three peaks where the middle peak (head) is higher than the two outer peaks (shoulders).

A position taken to offset potential losses from another position, reducing overall risk exposure.

Machines trading in microseconds: retail never races them, only routes around them.

Using the highest and lowest prices over a given period to determine trading range and potential breakout levels.

International Financial Services Commission of Belize - Offshore regulator with light oversight.

A non-binding price quote that shows an approximate market rate but cannot be traded on directly.

The rate at which prices for goods and services rise over time, eroding purchasing power and driving central bank policy.

The first sale of a company's shares to the public on a stock exchange.

The price of money over time: the single number behind most forex trends.

The difference in benchmark interest rates between two currencies, driving forward points, swap rates, and carry trades.

A charting method showing open, high, low, and close prices that reveals market sentiment and potential reversals.

Japan Financial Services Agency - Japan's strict financial regulator with very low leverage limits.

The JSE is Africa's largest stock exchange and the 19th largest in the world by market capitalisation, offering equities, bonds, and derivatives markets from Johannesburg, South Africa.

Forex slang for the New Zealand Dollar (NZD) or NZD/USD currency pair.

The bid side of a two-way price quote. Selling "on the left" means selling at the bid price.

Using borrowed capital to increase the potential return of an investment. Amplifies both gains and losses.

CFDs, futures, options and margin forex: full exposure, fraction upfront, losses beyond deposits possible.

A financial obligation or debt owed by an individual or entity.

A limit order executes only at your price or better. It guarantees price, not fill.

Liquidity is how easily an asset trades without moving price - the deepest liquidity lives in major forex pairs during overlapping sessions.

Pooled assets in a smart contract that enable trading on decentralised exchanges.

A liquidity provider is a bank or institution that quotes prices to brokers, which route your orders to them for fills.

Buying an asset with the expectation that its price will rise.

Forex slang for the Canadian Dollar (CAD) or USD/CAD currency pair.

A standardized trading unit. In forex, a standard lot is 100,000 units of the base currency.

A lot is the standard position size in forex: 100,000 units for a standard lot, 10,000 mini, 1,000 micro.

The minimum equity to keep positions alive: fall below and the venue starts closing.

The collateral required to open and maintain a leveraged trading position.

Margin is the collateral a broker holds to open a leveraged position, roughly 3.3% of notional at 30:1.

A broker's demand for additional funds when account equity falls below required margin levels.

Trading with borrowed size: deposits unlock positions many times larger, for better and worse.

Margin level is equity divided by used margin, and the number brokers use to decide when to margin-call or stop you out.

The total market value of a company or cryptocurrency, calculated by multiplying the current price by the number of shares or tokens in circulation.

A firm or individual that quotes both buy and sell prices to provide liquidity in financial markets.

A market order executes immediately at the best available price. It guarantees fill, not price.

The current price at which a currency pair can be bought or sold for immediate delivery (T+2 in forex).

Martingale doubles position size after every loss, betting on eventual recovery - the fastest way to ruin in trading.

Monetary Authority of Singapore - Singapore's central bank and top-tier financial regulator.

The date a financial contract or bond expires and must be settled.

A cryptocurrency created as a joke or based on internet memes, often with no utility but high speculation.

The most widely used retail trading platform, available as MT4 and MT5, supporting charting, indicators, and automated trading.

MetaTrader is the dominant retail trading platform family - MT4 the classic, MT5 the multi-asset successor - both supporting automated EAs.

Malta Financial Services Authority - EU regulator popular with fintech and gaming companies.

The average of the bid and ask prices, used as a reference point rather than an executable price.

The EU regulation governing investment services and financial markets across member states, setting standards for broker transparency and client protection.

Mio is the standard financial abbreviation for million, widely used in forex dealing rooms, interbank markets, and institutional trading.

March, June, September, December: the four months when futures and options contracts typically expire.

Central bank policy that adds money and lowers rates to stimulate the economy.

Central bank actions that manage money supply and interest rates to steer the economy.

The market for short-term, highly liquid debt used to park or borrow cash.

A smoothed line on a chart that calculates the average price over a set number of periods, filtering out short-term noise.

A momentum indicator showing the relationship between two EMAs, used to identify trend direction and strength.

NDD is an umbrella term for brokers that do not take the other side of trades, covering STP and ECN models.

The difference between long and short positions in a particular instrument or market.

News trading takes positions around scheduled data releases, where volatility is highest and the fastest moves happen.

National Futures Association - US self-regulatory organization for futures and forex.

Non-Fungible Token - a unique digital asset verified on a blockchain, representing ownership of a specific item or piece of content.

NFP is the US monthly jobs report, released on the first Friday and the single most market-moving data point for forex.

The price a seller is willing to accept, also called the ask.

The Organization of Petroleum Exporting Countries, which coordinates oil supply and prices.

A trade that has been entered and not yet closed.

Pay a premium for the right, never the obligation, to deal later at a set price.

A time window during which a forward contract can be settled at the holder's discretion, rather than on a single fixed date.

OTC means trading happens directly between parties rather than on a central exchange - forex is the largest OTC market.

A forex transaction for delivery on any date other than spot, not part of a swap.

Paper trading runs a strategy on live market data with virtual money, testing execution and rules without capital risk.

A payout is the profit withdrawal a funded trader receives from a prop firm, on a schedule set by its rules.

The PCE price index is the Federal Reserve's preferred inflation gauge, and the one its 2% target is officially measured against.

The smallest price movement in a currency pair. Typically the fourth decimal place (0.0001).

Pip value is the money a one-pip move is worth per position size, the number that converts price distance into risk.

A unit of price movement. In forex, often synonymous with a pip; in indices, the minimum price increment.

A fraudulent scheme that pays earlier investors with money from newer investors.

Position sizing calculates how much to trade so a worst-case loss matches your risk budget - the most important risk skill.

Position trading holds trades for weeks to months, riding long-term trends and ignoring short-term noise.

A market where contracts trade on the outcome of future events.

The amount an asset trades above its par or intrinsic value.

Notifications when price hits your level: automation for traders who sleep.

The net gain or loss on a trade or account, usually shown as P&L.

The profit split is the share of profits a funded trader keeps, typically 70-90% with prop firms.

A prop firm evaluates traders with paid challenges, then funds the successful ones with simulated capital and a profit split.

A survey-based indicator of economic health in manufacturing and services.

The right to sell at a set price: portfolio insurance and defined-risk shorting.

A monetary policy where a central bank buys assets to inject money into the economy, lower interest rates, and stimulate growth.

A displayed price showing the current bid and ask for a financial instrument.

The second currency in a currency pair, showing how much of it is needed to buy one unit of the base currency.

A sustained period of rising prices in a market or asset.

A momentum oscillator measuring the speed and magnitude of price changes on a 0-100 scale. Above 70 is overbought, below 30 is oversold.

A requote is a broker rejecting your requested price and offering a new one instead - a cost of dealing-desk execution.

Australia's central bank responsible for monetary policy, currency stability, and the Australian Dollar.

The central bank of New Zealand, a key driver of NZD pairs.

A price level where selling pressure tends to overcome buying pressure, preventing further price increases.

Individual, non-institutional traders who trade their own capital.

The ask/offer side of a two-way price quote. Buying "on the right" means buying at the ask price.

Risk-off describes markets where investors flee to safety, strengthening the dollar, yen and franc and pressuring riskier currencies.

Risk-on describes markets where investors chase growth assets, weakening havens and supporting high-yield and commodity currencies.

The risk-reward ratio compares what you risk to what you target, and it decides whether a strategy survives its losing streaks.

RSI is a momentum oscillator from 0-100 that flags overbought and oversold conditions, with divergence as its strongest signal.

Safe-haven currencies are the ones investors buy when risk turns off: the dollar, yen, franc and gold-linked flows.

Scalping is the fastest trading style: dozens of trades a day holding seconds to minutes for small, frequent profits.

Securities Commission of The Bahamas - Offshore regulator in the Caribbean.

Securities and Exchange Board of India - India's securities market regulator.

Securities and Exchange Commission - US regulator for securities markets.

Securities and Futures Commission - Hong Kong's top-tier financial regulator.

A cryptocurrency (also written as "shit coin") with no real value, utility, or development team. Often created for quick profits through hype and dump schemes.

Selling an asset with the expectation that its price will fall, allowing you to buy it back cheaper.

The arithmetic mean of prices over a set number of periods, where each data point carries equal weight.

Slippage is the difference between the price you expected and the price you got, common in fast markets and on stop orders.

Social trading lets you watch, discuss and automatically copy other traders, blending community with execution.

A transaction for immediate delivery, typically settling within two business days (T+2) in forex.

The difference between the bid and ask price. A key trading cost in forex and CFD markets.

The spread is the gap between bid and ask, and the immediate cost of every trade you open.

Spread betting is a UK and Irish tax-advantaged derivative format where you bet per point of price movement, never owning the asset.

An order to automatically close a position at a specified price to limit potential losses.

An order that triggers at your level then fills at market: the basis of stops and breakout entries.

A stop-limit triggers a limit order once price reaches the stop level, capping the fill price but risking no fill at all.

A stop-loss closes a position at a set price to cap losses. It becomes a market order once triggered.

STP brokers pass client orders directly to liquidity providers without a dealing desk, reducing requotes and conflicts.

A price level where buying pressure tends to overcome selling pressure, preventing further price declines.

St. Vincent and the Grenadines Financial Services Authority - Minimal offshore regulation.

Swap is the interest credited or charged for holding a forex position overnight, based on the rate difference between the two currencies.

Swap-free accounts charge no overnight interest, offered to comply with Islamic finance rules, usually with conditions.

Swing trading holds positions for days to weeks, capturing the middle of trends and avoiding intraday noise.

Switzerland's central bank, known for the 2015 EUR/CHF floor removal that caused historic market disruption.

Forex slang for the Swiss Franc (CHF) or USD/CHF currency pair.

An order to automatically close a position at a specified price to lock in profits.

A take-profit closes a position automatically at a set profit target, removing emotion from the exit.

Analyzing price charts and indicators to forecast future price movements based on historical patterns.

A short-term reversal against the prevailing trend, often after a sharp move.

An FX swap that rolls a position from tomorrow to the next business day.

The date a trade is executed, distinct from when it settles.

A trailing stop follows price as it moves in your favour, locking in profit while leaving room to breathe.

A US Treasury report measuring cross-border capital flows into and out of US financial assets.

A trendline connects swing points to map the current trend, acting as dynamic support or resistance.

A price quote showing both the bid and ask prices simultaneously, allowing immediate buy or sell execution.

The unemployment rate measures the share of the workforce without a job, and is read alongside NFP for the full jobs picture.

A trade executed at a price higher than the previous trade.

A market condition characterized by rising prices, with higher highs and higher lows over time.

The date on which a financial transaction settles and funds are actually exchanged.

A transaction that settles on the next business day (T+1), one day before standard spot settlement.

Vanuatu Financial Services Commission - Offshore regulator with minimal oversight.

A measure of how much and how quickly prices change, indicating market uncertainty and risk.

Volatility measures how much and how fast a price moves - opportunity for traders, and risk if size ignores it.

The VIX measures expected 30-day S&P 500 volatility and serves as the market's fear gauge, moving risk sentiment across forex.

The total number of shares, contracts, or lots traded during a given period.

A VPS runs your trading platform and EAs 24/7 on a data-center server, removing your computer, internet and power from the execution chain.

VWAP is the average price weighted by volume, used as an intraday fair-value anchor and institutional benchmark.

A wedge is a converging pattern of lower highs and lower lows (falling) or higher highs and higher lows (rising), breaking with trend or against it.

A rapid price movement in one direction followed by a sharp reversal, often triggering stop losses on both sides.

Win rate is the share of trades that profit - meaningful only when paired with average win and loss sizes.

Any live order waiting in the market: limits, stops and GTCs not yet filled or cancelled.

A currency pair that doesn't include the US dollar, calculated from two USD pairs.

The income return on an investment, typically expressed as an annual percentage based on cost or current value.

A market situation where one participant's gain equals another's loss, with total gains minus losses equaling zero.