Trading Glossary

The foreign exchange market, where currencies are exchanged against each other.

Two currencies quoted together, such as EUR/USD or GBP/JPY. The first currency is the base currency and the second is the quote currency.

The first currency in a pair. In GBP/USD, GBP is the base currency.

The second currency in a pair. In GBP/USD, USD is the quote currency.

A common unit of price movement in FX. For many pairs, one pip is 0.0001. For many JPY pairs, one pip is 0.01.

A general price movement unit. Some platforms and instruments use points instead of pips.

The difference between the buy price and the sell price. Spread is a real trading cost and can widen during news or low liquidity.

The price at which a market can usually be sold.

The price at which a market can usually be bought.

A position that benefits if price rises.

A position that benefits if price falls.

The size of a trading position. Larger lot size means larger profit or loss for each price movement.

Using borrowed exposure to control a larger market position than the account balance alone would allow. Leverage increases potential losses as well as gains.

Money set aside by the broker to support an open leveraged trade. Margin is not the same as maximum risk.

The amount of account equity currently being held to support open positions.

The amount still available after open positions and margin requirements are considered.

The account value after open trade profit or loss is included.

The account value before open trade profit or loss is included.

A warning or event that occurs when account equity falls below required margin levels.

When a broker automatically closes positions because the account no longer meets margin requirements.

An order or planned exit level designed to limit loss if the market moves against the trade.

A planned exit level where profit may be taken if price reaches the target.

The amount of account capital that may be lost if a trade reaches its stop loss.

The potential reward compared with the planned risk. For example, 2:1 means the target is twice the risk distance.

A decline from an account or strategy peak to a lower value.

When the final execution price is different from the expected price, often during fast markets or low liquidity.

The way price forms highs, lows, ranges, trends, pullbacks and turning points.

A local high where price pushes up and then turns down.

A local low where price pushes down and then turns up.

A new high above the previous swing high, often seen in bullish structure.

A pullback low that holds above the previous swing low, often seen in bullish structure.

A new low below the previous swing low, often seen in bearish structure.

A rally high that fails below the previous swing high, often seen in bearish structure.

A market moving directionally through a sequence of higher highs and higher lows, or lower lows and lower highs.

A sideways market where price rotates between support and resistance.

A temporary move against the current trend or direction.

When price breaks an important previous high or low, suggesting continuation or a possible change in behaviour.

An early clue that the market may be changing behaviour, such as a trend losing its previous rhythm.

The point where a trade idea is no longer valid.

The size and speed of price movement.

Average True Range. A volatility measure that shows how much price has moved over recent candles.

A move that has already travelled far away from value, often making late entries riskier.

A period where candles become smaller and price moves in a tighter range.

A period where price movement increases and candles become larger.

The strength and speed of recent price movement.

When price movement begins to lose strength after a move.

Strong movement that appears after price has already moved far from value.

Exponential Moving Average. A moving average that gives more weight to recent price data.

Relative Strength Index. A momentum indicator used to judge strength, weakness and possible stretched conditions.

Moving Average Convergence Divergence. A momentum indicator used to study trend pressure and changes in momentum.

A volatility band indicator placed around a moving average. Price near the outer bands may suggest stretched conditions, depending on context.

When price moves beyond a previous level, range edge, high, low or structure area.

A bearish breakout where price moves below support or a previous low.

When price breaks a level but fails to continue and returns back inside the previous structure.

When price returns to a broken level to check whether it now acts as support or resistance.

The availability of buyers and sellers in a market.

When price moves beyond an obvious high or low, triggers orders, and then rejects back.

Liquidity often located above obvious highs where buy stops may sit.

Liquidity often located below obvious lows where sell stops may sit.

An area where many stop orders may be located around an obvious level.

An area where buying interest may appear or where price has previously reacted higher.

An area where selling interest may appear or where price has previously reacted lower.

Continuation after an initial breakout or move.

Big-picture economic forces such as inflation, interest rates, employment, growth, central banks and risk sentiment.

A schedule of important economic events, data releases, speeches and holidays.

Consumer Price Index. A common measure of inflation.

Nonfarm Payrolls. A major US employment report watched closely by FX markets.

An institution responsible for monetary policy, such as the Federal Reserve, Bank of England, ECB or Bank of Japan.

The cost of borrowing money or return on lending money. Interest-rate expectations strongly affect FX.

Central-bank language that suggests tighter policy or higher rates may be more likely.

Central-bank language that suggests easier policy or lower rates may be more likely.

A debt instrument issued by a government or company to borrow money from investors.

The return investors receive from holding a bond, expressed as a percentage.

The difference between yields from two countries, maturities or bonds.

A chart showing bond yields across different maturities.

A yield adjusted for inflation expectations.

The market's appetite for risk. Risk-on means traders are more willing to take risk; risk-off means traders are more defensive.

A strategy involving borrowing in a lower-yielding currency and buying a higher-yielding currency. It can unwind quickly during stress.

A dashboard state meaning the market may be worth watching, but the setup is not ready.

A dashboard state meaning several conditions are improving, but confirmation and risk still matter.

A dashboard state meaning conditions appear strongly aligned, while uncertainty and risk still remain.

A warning that the direction may have been right but the entry is now late or stretched.

A condition where the setup is not suitable enough for a responsible idea.

A more sensible price location where a trade idea may be easier to plan compared with chasing after movement.

Evidence that supports a trade idea after price reaches a level or zone.

A summary of aligned conditions. It is context only and not a true probability or trade instruction.

The current directional force in the market. Pressure is not the same as trade permission.

The full combination of structure, value, momentum, volatility, session, news, risk and confirmation being acceptable.

The dashboard is being reviewed for stability, clarity, tracking and responsible presentation before wider release.

Information that helps organise thinking but does not replace personal responsibility or risk management.

Fear of missing out. Entering because the trader is scared the market will move without them.

Taking trades to win back losses quickly instead of waiting for a proper setup.

Taking too many trades or forcing trades when conditions are poor.

Following the plan even when emotions, wins or losses create pressure.

A record of trade reasons, risk, emotions, screenshots, outcomes and lessons.

The repeatable decision-making method a trader follows before, during and after trades.

A decision that goes against the trader's planned process.

A scheduled review of trades, mistakes, setup quality and lessons from the week.