The forex glossary

The lowest price a seller is willing to accept. Your buy orders fill at the ask.

A volatility measure - average pip range of the last N candles. 14-period is the standard.

The highest price a buyer is willing to pay. Your sell orders fill at the bid.

A flat per-lot fee on ECN accounts. In exchange for near-zero spreads.

A broker loan letting you control a position larger than your deposit. Ratios like 1:30, 1:500.

How easily you can enter/exit without moving price. Deep = tight spreads and fast fills. Thin = slippage and gaps.

An area of clustered stop orders. EQH, EQL, prior highs/lows, round numbers - all pools price tends to seek.

A standardised position size. 1 standard lot = 100,000 units of the base currency.

The collateral your broker sets aside for an open position.

A broker warning that your equity is approaching the forced-liquidation threshold.

Another name for swap/rollover. Cost of carrying a leveraged position past daily rollover.

The smallest standard price move for a currency pair. For most pairs: 0.0001. For JPY pairs: 0.01.

The difference between the bid (sell) price and ask (buy) price. Your entry cost on every trade.

Automatic closure of open positions when margin level falls below the broker's minimum.

Interest charged or credited for holding a position overnight. Based on rate differentials.

The speed and range of price movement. High = big swings; low = slow grind.

Bid = highest price a buyer will pay. Ask = lowest price a seller will accept. Gap between them is the spread.

Moving stop loss to entry price after a trade moves in your favour. Eliminates risk.

An order to buy at or below a specified price, or sell at or above it. Fills only if the market reaches your level.

Buying a pair, expecting the base currency to rise against the quote.

An order to buy or sell immediately at the best available price.

Selling a pair (that you don't own) to buy it back lower.

A pre-placed order that closes a position when price moves against you. Your max loss per trade.

The gap between the price you expected and the price you actually filled at.

The rule that your stop loss must always sit beyond protected structure, not at it.

An order that becomes a market order once price crosses a trigger level. Used for breakouts and stop losses.

An order that closes a position at a pre-set profit level.

A stop that moves in your favour as price moves, locking in profit as the trade runs.

Price moving decisively through a prior high, low, or consolidation edge.

The rectangular part of a candle - the range between open and close.

A single-period price bar showing open, high, low, close (OHLC).

Most common: candlestick (OHLC), line (close only), bar (OHLC). Heikin-Ashi smooths for trend clarity.

Shorthand for Daily (D1), Weekly (W1), and Monthly (MN1) timeframes.

Intraday shorthand for the current day's high and low as they form.

A candle where open and close are nearly equal - tiny body, possibly long wicks.

A candle whose body fully covers the prior candle's body. Bullish or bearish by direction.

When a session opens above or below its previous close, leaving an unfilled area on the chart.

The structural pattern of an uptrend: each peak higher, each trough higher.

The highest and lowest price a pair hits during the current trading day.

Timeframes above 1H in our system - used for bias and targets, NEVER for entries.

A candle with a small body and roughly equal wicks both sides. Market hasn't picked a direction.

The structural pattern of a downtrend: each peak lower, each trough lower.

1M / 3M / 5M - the lower-timeframe entry class.

15M / 30M / 1H - the middle-timeframe entry class.

Yesterday's high and low. Reference levels for today's setups.

A candle with a long wick one side, small body at the opposite end. Reversal signal when it fails a level.

A counter-trend move inside a larger trend. The rest before the next leg.

Price moving sideways between a ceiling and a floor, with no clear trend.

Duration each candle represents. Common: 1m, 3m, 5m, 15m, 30m, 1h, 4h, daily, weekly, monthly.

A persistent directional move. Up = HH + HL. Down = LH + LL.

The thin line above/below a candle body, showing the high/low tested before the close.

Only re-enter a trade that was moved to BE if a NEW entry model forms on the original level.

Peak-to-trough percentage decline in account equity. The most honest measure of strategy risk.

Average R per trade: (win rate x avg win R) - (loss rate x avg loss R). Positive expectancy is the whole game.

Self-imposed or broker-imposed cap. Hit it, stop trading for the day. Our cap: 3 trades max per day.

The lot size of a trade, calculated from % risk and stop distance - NOT picked by vibes.

A trade's result as a multiple of initial risk. +1R = won what you risked; -1R = full stop.

Fraction of account risked per trade. Our rule: 1% on personal accounts, 0.3% on funded.

Ratio of stop distance (risk) to target distance (reward). Our minimum is 1.7RR. Non-negotiable.

Percentage of trades that close profitable. Meaningless without RR context.

Trading done after the regular stock-market close. Primarily an equities concept.

Busiest forex session. 08:00-17:00 London time. Deepest liquidity, cleanest breakouts.

The window when London and NY are both open. 8am-noon ET. Highest-liquidity window in forex.

Second-biggest forex session. 08:00-17:00 ET. Major US data and policy releases.

Stocks: trading session before regular market hours. Forex: term is often used loosely for 'analysis done before your trading window'.

17:00 New York time. Swap charged, spreads widen, liquidity thins for 15-30 minutes.

First forex session of the day. ~22:00 GMT - 07:00 GMT. Lowest volume of the majors.

Asian trading hub. ~00:00 GMT - 09:00 GMT. Good volume for AUDUSD (tight Australia-Asia ties) and JPY pairs.

In EURUSD: EUR is base, USD is quote. Price = how much quote to buy 1 unit of base.

Buying a high-yield currency and selling a low-yield one to collect the interest differential.

How two pairs move relative to each other. +1 = in sync. -1 = inverse.

Pairs between major currencies excluding USD. EURJPY, GBPAUD, AUDCAD.

Weighted basket measuring USD strength vs six major currencies. Heavily weighted to EUR.

Major vs emerging-market currency. USDZAR, USDMXN, USDTRY. AVOID.

USD-paired currency pairs with a major currency. EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, NZDUSD.

Institution that sets a country's monetary policy. Fed (US), ECB (Euro), BoE (UK), BoJ (Japan), RBA (Australia).

Monthly inflation measure. High CPI = central banks hike rates. Massive forex mover.

Schedule of all upcoming economic releases, with expected impact and consensus forecasts.

US Federal Reserve policy meeting. 8x per year. Sets US interest rates.

Analysing economic and geopolitical factors - rate decisions, inflation, geopolitics - to forecast price.

Gross Domestic Product - total value of goods/services produced. Quarterly release. Slower-moving than CPI/NFP.

Hawkish = leaning toward hikes (currency-positive). Dovish = leaning toward cuts (currency-negative).

The rate central banks charge commercial banks. Higher = stronger currency (usually).

The first candle printing during/after high-impact news. Wicks both sides, picks a direction.

No setups: 2 hours before + during red-folder news. 1 hour after = back to normal. Already in a trade: close 30 min BEFORE news regardless of P&L.

US monthly employment release. First Friday of each month, 8:30am ET. One of the most volatile forex events.

Analysing historical price action - charts, structure, indicators - to predict future movement.

The firm giving you market access. Quality ranges from excellent to outright scam.

Fake-money account to practice. Matches live spreads but not live emotional stakes.

Electronic Communication Network - your order hits the interbank market directly. Tight spreads + commission.

Firm-funded account. You trade their capital, split profits, strict risk rules.

A broker that takes the opposite side of your trade. Profits when you lose.

The dominant retail forex execution platform. Direct broker integration, built-in charting, expert advisors.

Government oversight body. Tier-1: ASIC (AU), FCA (UK), CySEC (Cyprus), NFA (US).

Straight-Through Processing - order passed to a liquidity provider, not matched internally.

Industry-standard charting platform. Free tier works; paid unlocks more timeframes and indicators.

Seeking information that supports your view, ignoring what contradicts it.

Following your rules whether you feel like it or not. The one skill that separates profitable traders from everyone else.

The ability to treat each trade as one row in a spreadsheet, not a personal verdict.

Jumping into a trade because price is already running and you don't want to miss more. Nearly always the wrong decision.

Seeing a valid setup and failing to pull the trigger. Often followed by chasing when the move runs without you.

The feeling after a winning streak that you can't miss. The prelude to account-altering losses.

Taking too many trades, often low-quality, driven by boredom or the need to feel busy.

Taking a trade immediately after a loss to 'win back' what you just lost. Always loses more.

Recording every trade with entry reason, rule adherence, outcome, emotional state, lesson.

Written document defining what you trade, when, how, and what invalidates a setup.

The highest and lowest price a stock has traded at in the last 52 weeks.

A company's quarterly or annual release of financial results.

A fund comprised of a basket of equities (or other assets) that trades like a single stock.

A document filed with the SEC regarding company updates. 10-K (annual), 10-Q (quarterly), 8-K (material events).

The number of shares available for public trading - excludes insider and institutional locked-up shares.

A stock that's difficult to short - often because supply is tight or the stock is heavily shorted already.

A stock with few publicly-tradeable shares. Small orders move price dramatically.

Total dollar value of a company: share price x outstanding shares.

Total shares a company has issued - includes float plus insider and institutional shares.

Running total of a portfolio's gains and losses for a given period.

US SEC rule: if you have under $25,000 in a margin account, you're limited to 3 day trades per rolling 5 business days.

A company announcement issued outside earnings. Can include partnerships, FDA approvals, executive changes.

When a stock crosses from being down on the day to up (R2G) or the reverse (G2R).

A trade taking advantage of very small price changes. Typically seconds to minutes.