Forex Glossary

336 terms across forex, brokers, regulation, platforms and orders, technical and fundamental analysis, risk and money, CFDs and markets, and prop trading. Each term has its own page with related terms and the lessons that use it.

336 terms

A

A-book Brokers: Client trades the broker hedges in the market, earning only the spread or commission.
Account currency Brokers: The currency an account balance is held in. Holding it in the currency you fund with avoids conversion fees.
Add-on Prop trading: A paid extra on a challenge, such as a higher profit split, weekend holding or news trading permission.
Asian session Forex: The Sydney and Tokyo sessions together, from about 22:00 to 09:00 UTC. Quieter for European pairs, busier for yen, AUD and NZD.
ASIC Regulation: The Australian Securities and Investments Commission. Requires segregation and negative balance protection and caps retail leverage at 1:30; no statutory compensation scheme.
Ask Forex: The price at which the broker will sell the base currency to you, so the price at which you buy. Also called the offer. Always above the bid.
Asymmetric slippage Platforms and orders: Slippage that only ever goes against the client. Prohibited by strong regulators.
Average hourly earnings Fundamental analysis: US wage growth, released with payrolls. Read as an inflation signal.
Average spread Brokers: A broker's spread averaged over a period, the useful figure for comparison. Spreads from, the minimum, is a marketing number.
Average true range (ATR) Technical analysis: The average size of each period's range over 14 periods, including gaps. The unit of noise and the basis for stop distances.
Average win and average loss Risk and money: The mean profit of winning trades and mean loss of losing trades, best measured in multiples of the amount risked.
Averaging down Risk and money: Adding to a losing position to lower its average price. Increases exposure and margin and is a common route to a stop-out.

B

B-book Brokers: Client trades the broker keeps on its own books, so client losses are the broker's gains. Legal and common; regulation is what keeps it fair.
Backtesting Risk and money: Applying a strategy's rules to historical prices to see how it would have performed.
Balance Risk and money: The money in an account with all positions closed, after realised profit and loss and swaps.
Bank of England Fundamental analysis: The UK central bank, whose Monetary Policy Committee publishes its vote split with each decision.
Bank of Japan Fundamental analysis: Japan's central bank, known for decades of ultra-low rates and for intervening, with the Ministry of Finance, to support the yen.
Bar chart Technical analysis: A chart showing each period as a vertical line from low to high with ticks for the open and close.
Base currency Forex: The first currency in a pair, always one unit. In EUR/USD the base is the euro; buying the pair means buying euros.
Best execution Brokers: A regulatory duty to fill client orders on the best available terms. Required by the FCA and EU regulators; absent at most offshore ones.
Bid Forex: The price at which the broker will buy the base currency from you, so the price at which you sell. Always below the ask.
Bollinger Bands Technical analysis: A moving average with bands two standard deviations above and below, which widen with volatility. A squeeze often precedes a large move.
Bollinger squeeze Technical analysis: Bollinger Bands narrowing to their tightest in months, indicating low volatility that often precedes a breakout.
Bond yield Fundamental analysis: The return on a government bond. Two-year yields track expected policy rates; ten-year yields reflect growth and inflation expectations.
Bonus Brokers: Trading credit offered by a broker on deposit or registration, always with volume conditions on withdrawal. Banned for retail clients by the FCA, ESMA and ASIC.
Breakeven stop Platforms and orders: A stop loss moved to the entry price once a trade has moved a set distance in your favour, so the worst outcome is no loss.
Breakout Technical analysis: A move that takes price out of a range or through a level. Believable on a close beyond the level with follow-through and a retest.

C

Candlestick Technical analysis: A chart element showing a period's open, high, low and close, with a body between open and close and wicks to the extremes.
Carry trade Forex: Buying a high-interest currency against a low-interest one to earn the rate differential daily. Profitable in calm markets and prone to violent unwinds in scares.
Cent account Brokers: An account denominated in cents so that positions are a hundredth of their usual size. Used to trade real money at minimal risk.
Central bank Fundamental analysis: The institution that issues a currency and sets its interest rate: the Federal Reserve, ECB, Bank of England, Bank of Japan and others.
Central bank minutes Fundamental analysis: The record of a policy meeting, released a few weeks later, showing the range of views on the committee.
CFD (contract for difference) CFDs and markets: A contract to exchange the difference between an instrument's opening and closing price, with no ownership of the underlying. How most brokers outside the US offer forex, indices, commodities, shares and crypto.
Challenge Prop trading: Another name for a prop firm evaluation, usually the first phase of a two-step model.
Challenge fee Prop trading: The price of an evaluation attempt, scaling with account size and type. Usually not refunded on failure; often refunded with the first payout.
Chargeback Brokers: A reversal of a card payment requested through your bank, one of the few remedies against a broker that refuses withdrawals. Time limits apply.
Chart pattern Technical analysis: A recognisable shape formed by a series of swings, such as a triangle, flag, double top or head and shoulders.
Chart template Platforms and orders: A saved chart layout of indicators and settings that can be applied to any instrument, so every chart looks the same.
Client agreement Regulation: The contract between you and the broker's entity. It states the execution model, client money terms, negative balance policy, fees and trading restrictions.
Client money Regulation: Money a broker holds on behalf of clients. Under strong regulation it must be segregated and reconciled.
Client money segregation Regulation: Holding client deposits in trust accounts separate from the broker's own money, so they are returned to clients if the broker fails. Required by tier-one regulators.
Clone firm Brokers: A fake broker that copies the name, licence number and address of a genuine licensed firm onto its own website. The regulator's register shows the real firm's website; a mismatch is the tell.
Commission Brokers: A fixed fee per lot charged on raw-spread or ECN accounts, typically 3 to 3.5 dollars per side per standard lot.
Commodity CFD CFDs and markets: A CFD on a commodity such as gold, oil or wheat. Gold is the most traded and has its own pip and contract conventions.
Compensation scheme Regulation: A fund that pays clients of a failed firm up to a limit. The UK's FSCS covers 85,000 pounds; Cyprus's ICF covers 20,000 euros. Not available under most regulators.
Confirmation Technical analysis: Waiting for the market to begin doing what you expect, such as a close back above a level, before entering.
Confluence Technical analysis: Several independent kinds of evidence pointing to the same level or direction, such as structure, a moving average and a retracement level.
Consensus forecast Fundamental analysis: The average of economists' estimates for a data release, which the market prices in advance.
Consistency rule Prop trading: A cap on the share of total profit any one day or trade may contribute, commonly 30 to 50 percent, delaying a pass or payout until met.
Consumer confidence Fundamental analysis: Survey measures of how households feel about the economy and their finances, which lead spending.
Contract size Forex: The number of units one lot represents for an instrument, stated in the symbol specification. 100,000 for most forex pairs; broker-specific for gold, indices and shares.
Copy trading Brokers: Automatically replicating another trader's positions in your own account, through a broker's service or a platform such as ZuluTrade or Myfxbook AutoTrade.
Core inflation Fundamental analysis: Inflation excluding food and energy, the measure central banks weight most because it shows the persistent component.
Correlation Risk and money: The tendency of two instruments to move together. Positions in correlated pairs are one risk taken several times.
Counterparty Brokers: The other party to a contract. In retail forex, your counterparty is your broker, which may or may not hedge your trade.
Counterparty risk Prop trading: The risk that the other party to a contract does not perform: for a prop trader, that the firm changes terms or does not pay.
CPI (consumer price index) Fundamental analysis: The main measure of consumer inflation, released monthly, read as headline, core and month-on-month against the consensus.
Cross pair Forex: Any currency pair without the US dollar. Priced by combining two dollar pairs; GBP/JPY is GBP/USD multiplied by USD/JPY.
Crossover Technical analysis: One moving average crossing another, or the MACD line crossing its signal line, read as a change in trend or momentum. Lags, and whipsaws in ranges.
Crypto CFD CFDs and markets: A CFD on a cryptocurrency price. Leverage is capped at 1:2 for retail clients under ESMA and FCA rules, and CFD crypto is banned for UK retail clients.
cTrader Platforms and orders: Spotware's trading platform, an alternative to MetaTrader with a cleaner interface, depth of market and C# automation through cTrader Automate.
Currency conversion fee Brokers: The cost of converting deposits, withdrawals or trade results between currencies when the account currency differs from the money's.
Currency pair Forex: Two currencies quoted against each other, such as EUR/USD. The price is how much of the second currency one unit of the first is worth.
Custody Brokers: The holding of client money by the broker. Where and how it is held is a regulatory matter; see segregation.
CySEC Regulation: The Cyprus Securities and Exchange Commission, which licenses investment firms under EU rules and passports them across the EEA. Backed by the Investor Compensation Fund.

D

Daily drawdown limit Prop trading: The most an account may lose in one day, usually 4 or 5 percent, measured at most firms on equity from the day's starting balance.
Daily loss limit Risk and money: The most an account may lose in one day before trading stops, self-imposed or, at a prop firm, enforced.
Day trading Risk and money: Holding trades for minutes to hours and closing before the session ends.
Dealing desk Brokers: The part of a market-making broker that manages client positions and decides which to hedge. A no-dealing-desk broker routes orders straight to liquidity providers.
Demo account Brokers: A practice account with virtual money at live prices. Teaches the platform and a method; flatters fills and removes the emotion of real losses.
Depth of market Platforms and orders: The ladder of bids and asks at prices around the current one, with the volume available at each. Shown by ECN brokers and cTrader.
Discipline Risk and money: Following the plan when it feels wrong. Built by design, small sizes, preset orders and routine, rather than willpower.
Divergence Technical analysis: Price making a new high or low while a momentum indicator does not, warning that the move is losing force.
Diversification CFDs and markets: Spreading risk across instruments that do not move together. Correlated forex positions are not diversification.
Doji Technical analysis: A candle with a very small body and wicks on both sides, showing a period that ended near where it began.
Dot plot Fundamental analysis: The Federal Reserve's quarterly chart of where each committee member expects rates to be, a form of forward guidance.
Double top Technical analysis: Two swing highs at the same level, showing resistance has held twice and the trend is in doubt. A double bottom is the mirror.
Dovish Fundamental analysis: Language or policy leaning towards lower rates or looser conditions. Usually weakens the currency.
Drawdown Risk and money: The decline from an account's equity peak to a subsequent low, as a percentage of the peak.
Dual mandate Fundamental analysis: The Federal Reserve's twin goals of price stability and maximum employment, which is why US jobs data move the dollar.

E

Easing Fundamental analysis: Cutting interest rates or adding stimulus to support growth. Usually weakens the currency.
ECN (electronic communication network) Brokers: A broker model that matches orders in a shared pool of quotes from banks, brokers and clients, charging a commission on a raw spread.
Economic calendar Fundamental analysis: A schedule of data releases and events with time, currency, importance, previous, forecast and actual figures.
Economic cycle Fundamental analysis: The sequence of expansion, peak, contraction and recovery through which economies move, shaping policy and currencies.
Edge Risk and money: A positive expectancy applied consistently; the reason a strategy makes money on average.
Effective leverage Risk and money: Total exposure divided by equity: the leverage an account is actually using, as opposed to the maximum offered.
Engulfing candle Technical analysis: A candle whose body covers the previous candle's body, showing a shift in momentum.
Entry rule Risk and money: The precise trigger that turns a setup into a trade.
Equity Risk and money: Balance plus the running profit or loss of open positions. What a prop firm's drawdown rules usually measure.
Equity curve Risk and money: A plot of account equity after each trade, from which drawdown depth and duration are read.
ESMA Regulation: The European Securities and Markets Authority, whose 2018 measures set the 1:30 retail leverage cap, banned bonuses and required negative balance protection across the EU.
European Central Bank Fundamental analysis: The central bank of the eurozone, with a sole mandate of price stability across its member economies.
Evaluation Prop trading: The paid test a prop firm sets: reach a profit target on a simulated account without breaching the loss limits. Also called a challenge.
Exchange rate Forex: The price of one currency in terms of another, which is what a currency pair's quote shows.
Execution Platforms and orders: The process of filling an order: routing, matching and confirming the price. Execution quality is how often and how far fills differ from quotes.
Execution speed Platforms and orders: The time a broker takes to fill an order, usually quoted in milliseconds.
Exit rule Risk and money: The rule that ends a trade: stop, target, trailing, time or partial.
Exotic pair Forex: A major currency paired with a thinly traded one, such as USD/TRY or USD/ZAR. Wide spreads, large swaps and sudden moves.
Expectancy Risk and money: The average result of a trade: win rate times average win minus loss rate times average loss. The number that says whether a strategy makes money.
Expert advisor (EA) Brokers: An automated trading program that runs inside MetaTrader and can analyse charts and place trades on its own.
Exponential moving average (EMA) Technical analysis: A moving average that weights recent prices more, so it reacts faster than a simple average.
Exposure Risk and money: The total notional value of open positions, which is what a market move acts on.

F

False breakout Technical analysis: A move beyond a level that fails to hold and returns inside the range, trapping breakout traders.
FCA Regulation: The Financial Conduct Authority, the UK regulator. Requires segregation, negative balance protection and FSCS membership; caps retail leverage at 1:30.
Federal Reserve Fundamental analysis: The US central bank, with a dual mandate of stable prices and maximum employment. Its decisions move every currency pair.
Fee refund Prop trading: The return of the evaluation fee, at many firms paid with the first funded payout.
Fibonacci retracement Technical analysis: Levels at 38.2, 50 and 61.8 percent of a price swing, marked as places a pullback might stall. Candidates, confirmed by structure.
Filter Risk and money: A rule that keeps a strategy out of conditions it is not built for, such as ranges, thin sessions or news windows.
Fixed fractional risk Risk and money: Risking a fixed percentage of current equity on every trade, so that losses shrink the risk and gains grow it.
Flag Technical analysis: A small counter-trend channel after a sharp move, usually a pause before the move resumes.
FOMO Risk and money: The fear of missing out: chasing a move that has already happened or trading outside the plan because the market is moving.
Forex Forex: The foreign exchange market, where one currency is exchanged for another. It is the largest financial market in the world and trades over the counter around the clock on weekdays.
Forex broker Brokers: A company that gives retail traders access to the currency market: platform, prices, leverage, custody of deposits and settlement of profit and loss.
Forward guidance Fundamental analysis: A central bank's communication about its future policy, which moves markets as much as decisions do.
Forward testing Risk and money: Applying a strategy's rules to live prices on a demo or small account for a fixed sample before scaling up.
Free margin Risk and money: Equity minus used margin: what remains to open new positions or absorb losses.
FSCS Regulation: The UK Financial Services Compensation Scheme, which pays up to 85,000 pounds per person per firm when an FCA-regulated firm fails.
Fundamental analysis Fundamental analysis: The study of the economic forces that decide a currency's value: interest rates, growth, inflation, employment, flows and politics.
Funded account Prop trading: The account a prop firm gives a trader who passes its evaluation. Usually simulated; the firm pays a share of its profit.
Futures CFDs and markets: Exchange-traded contracts to buy or sell an asset at a set date. The market futures prop firms trade; distinct from CFDs, which are over the counter.

G

Gap Forex: A jump in price between two consecutive quotes with no trading at the prices between. Common at the Monday open and around major news. Stops inside a gap fill at the next available price.
GDP (gross domestic product) Fundamental analysis: The total output of an economy, published quarterly with revisions. Confirms with a lag; moves markets on surprise.
Gold (XAU/USD) CFDs and markets: Gold priced in dollars, traded as a CFD at most brokers. Tends to move inversely to real yields and the dollar, and rises in scares.
Good till cancelled (GTC) Platforms and orders: An expiry setting under which a pending order stays active until you cancel it.
Gross profit and gross loss Risk and money: The sum of all winning trades and the sum of all losing trades over a period, before netting.
Guaranteed stop Platforms and orders: A stop loss the broker promises to fill at its exact price regardless of gaps, for a premium. Worth it over weekends and major events.

H

Hammer Technical analysis: A candle with a small body near the top and a long lower wick, after a decline, suggesting sellers were rejected.
Hawkish Fundamental analysis: Language or policy leaning towards higher rates or tighter conditions. Usually strengthens the currency.
Head and shoulders Technical analysis: A reversal pattern of a peak between two lower peaks, confirmed when price breaks the neckline through the troughs.
Hedging Forex: Taking a position to offset an existing risk, such as locking in an exchange rate for a future payment. Also, at a broker, offsetting client trades with a liquidity provider.
Hedging mode Platforms and orders: A platform setting that allows opposite positions in the same instrument to coexist. Netting mode combines them into one.
High-impact news Fundamental analysis: Releases and events rated most likely to move prices: central bank decisions, inflation and employment data. Prop firms define news windows by them.
Hybrid broker model Brokers: A broker that internalises some trades and routes others, deciding by client or by trade. Most retail brokers are hybrids.

I

Inactivity fee Brokers: A monthly charge some brokers apply to accounts with no trades for a set period, often three to twelve months.
Inactivity rule Prop trading: A rule closing a funded account that goes unused for a set period, often 30 days.
Index CFD CFDs and markets: A CFD on a stock market index such as the S&P 500 or DAX, priced per point with a broker-specific contract size.
Indicator Technical analysis: A calculation on past prices drawn on or below the chart, such as a moving average or RSI. Useful for measuring and filtering; unable to predict.
Inflation Fundamental analysis: The rate at which prices rise. Central banks target about 2 percent; above it they tighten, below it they ease.
Inflation expectations Fundamental analysis: What households, businesses and markets expect inflation to be. Watched by central banks to judge whether inflation is becoming entrenched.
Inflation target Fundamental analysis: The inflation rate a central bank aims for, about 2 percent at the major banks.
Insolvency Regulation: A broker's inability to pay its debts. Segregated client money is outside the insolvency; unsegregated money joins the queue of creditors.
Instant execution Platforms and orders: Filling an order at the quoted price or not at all. If the price has moved the broker sends a requote.
Instant funding Prop trading: A prop firm model that skips the evaluation for a higher fee, with tighter drawdown and a reduced split until a profit threshold.
Interbank market Forex: The network of large banks that trade currencies directly with each other and whose quotes set the prices everyone else sees.
Interest rate Fundamental analysis: The cost of borrowing money. Higher rates draw capital into a currency and strengthen it.
Interest rate differential Fundamental analysis: The gap between two currencies' interest rates. Its expected path is the strongest driver of their exchange rate.
Intervention Fundamental analysis: A central bank buying or selling its own currency to influence its value. Japan and Switzerland do it; most major banks do not.
Investor Compensation Fund Regulation: Cyprus's compensation scheme for clients of CySEC-regulated firms, paying up to 20,000 euros per person.

J

Jobless claims Fundamental analysis: The weekly count of new US unemployment benefit applications, tracking layoffs in near real time.

L

Lag Technical analysis: The delay between a price change and an indicator's response, inherent in any calculation on past prices.
Latency Platforms and orders: The delay between sending an order and its arrival at the broker's server. Matters to scalpers and automated strategies.
Legal entity Regulation: The specific licensed company you contract with when opening an account. A broker brand is usually several entities under different regulators, each with different protections.
Leverage Risk and money: The ability to control a position larger than your deposit. At 1:30 a 1,000-dollar margin controls 30,000. Multiplies both profit and loss.
Leverage cap Regulation: The maximum leverage a regulator allows brokers to offer retail clients: 1:30 on majors under FCA, ESMA and ASIC rules, 1:50 in the US, 1:25 in Japan.
Licence Regulation: A regulator's authorisation for a specific legal entity to offer specific services. Its number should be verified on the regulator's own register.
Limit order Platforms and orders: An order that waits to buy below the current price or sell above it, filling only at that price or better. Used for pullback entries and take profits.
Line chart Technical analysis: A chart joining closing prices, hiding the range within each period.
Liquidity Forex: How easily an instrument can be bought or sold at the current price. Deep liquidity means tight spreads and reliable fills; thin liquidity means the opposite.
Liquidity provider Forex: A bank, non-bank market maker or prime broker that quotes prices to a broker and takes the other side of hedged trades.
Live account Brokers: An account funded with real money.
London session Forex: Roughly 08:00 to 17:00 UTC in winter. The busiest session, where many trends begin.
Long Forex: A position that profits if the price rises. Going long a pair means buying the base currency.
Losing streak Risk and money: A run of consecutive losing trades. Normal at any win rate; a 40 percent strategy should expect nine or ten in a row in a hundred trades.
Loss aversion Risk and money: Feeling a loss about twice as strongly as an equal gain, which produces small wins and large losses. Preset stops and targets counter it.
Lot Forex: The unit of trade size. A standard lot is 100,000 units of the base currency, a mini lot 10,000, a micro lot 1,000.

M

MACD Technical analysis: Moving average convergence divergence: the difference between the 12 and 26-period EMAs, with a 9-period signal line and a histogram of the gap.
MACD histogram Technical analysis: Bars showing the gap between the MACD line and its signal line; growing bars mean accelerating momentum.
Macroeconomics Fundamental analysis: The study of whole economies: growth, inflation, employment and policy. The substance of forex fundamentals.
Major pair Forex: One of the seven most traded pairs, each containing the US dollar: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD and NZD/USD. They carry the tightest spreads.
Margin Risk and money: The deposit a broker holds against an open position, equal to the notional value divided by the leverage.
Margin call Risk and money: The broker's warning that margin level has fallen to its threshold, after which no new positions can be opened.
Margin level Risk and money: Equity divided by used margin, as a percentage. Brokers issue a margin call at around 100 percent and stop out at around 50.
Margin requirement Risk and money: The percentage of a position's value that must be deposited as margin: one divided by the leverage, so 3.33 percent at 1:30.
Market execution Platforms and orders: Filling an order at the best price available when it arrives, which may differ from the quoted price. No requotes; slippage instead.
Market maker Brokers: A broker that quotes its own prices and takes the other side of client trades from its own book, earning the spread and unhedged client losses.
Market order Platforms and orders: An order to buy or sell immediately at the best available price. Certain to fill; the price may slip.
Market participants Forex: Central banks, commercial banks, funds, corporations and retail traders: the groups whose dealing makes up the forex market.
Market structure Technical analysis: The pattern of swing highs and lows on a chart, from which trend and range are read.
Maximum deviation Platforms and orders: A setting on a market order that rejects the fill if it would be worse than a set number of pips from the quoted price.
Maximum drawdown Risk and money: The largest peak-to-trough decline over a period. In prop trading, the overall loss limit that closes an account.
MetaTrader 4 (MT4) Platforms and orders: MetaQuotes' 2005 trading platform, still the most widely offered by forex brokers, with a vast library of expert advisors written in MQL4.
MetaTrader 5 (MT5) Platforms and orders: MetaQuotes' successor to MT4, with more timeframes and order types, depth of market, a built-in calendar and a faster strategy tester. The platform MetaQuotes develops.
Micro lot Forex: 1,000 units of the base currency, entered as 0.01. One pip on a USD-quoted pair is worth 10 cents. The usual size for a first live account.
Mini lot Forex: 10,000 units of the base currency, entered as 0.10. One pip on a USD-quoted pair is worth 1 dollar.
Minimum deposit Brokers: The smallest amount a broker will open an account with. The sensible deposit is the one that lets you size positions at one percent risk with realistic stops.
Minimum trading days Prop trading: The number of separate days on which trades must be placed before a phase can be passed, to prevent one-trade passes.
Minor pair Forex: A cross between two major currencies that does not include the US dollar, such as EUR/GBP or EUR/JPY.
Momentum Technical analysis: The speed and size of recent price movement, measured by indicators such as RSI and MACD.
Monetary policy Fundamental analysis: How a central bank manages the cost and supply of money, chiefly by setting the policy interest rate.
Moving average Technical analysis: The average closing price over a set number of periods, redrawn each bar. Shows direction and acts as a dynamic level.

N

Negative balance protection Regulation: A guarantee that an account cannot go below zero; the broker absorbs losses beyond the deposit. Mandatory for retail clients under FCA, ESMA and ASIC rules.
New York session Forex: Roughly 13:00 to 22:00 UTC in winter. Busy during the London overlap and home to US data releases.
News trading rule Prop trading: A ban on opening, closing or holding positions in a window around high-impact releases, typically a few minutes either side, on the firm's clock.
No dealing desk Brokers: A broker model, STP or ECN, in which client orders are passed to external liquidity rather than held by the broker.
Noise Forex: Random short-term price movement that carries no directional information. The lower the timeframe, the larger the share of noise.
Nonfarm payrolls Fundamental analysis: The US monthly jobs report, released on the first Friday of the month: jobs added, unemployment rate and average hourly earnings. The most market-moving scheduled release.
Notional value Risk and money: The full value of a position, position size times price, on which profit and loss are calculated regardless of the margin put up.

O

Offshore regulation Regulation: A licence from a small jurisdiction such as the Seychelles, Mauritius, Vanuatu or Belize, cheap to obtain and lightly supervised. Permits high leverage and bonuses; provides little protection.
OHLC Technical analysis: Open, high, low and close: the four prices a bar or candle records for its period.
Oil CFDs and markets: Crude oil, traded as Brent or WTI CFDs. Drives the Canadian dollar and Norwegian krone and weighs on the yen and rupee.
One-click trading Platforms and orders: A platform setting that places market orders from the chart without an order ticket. Fast, and a source of accidental trades.
One-step challenge Prop trading: An evaluation with a single phase, usually paired with a tighter or trailing drawdown to keep the filter strict.
Order book Platforms and orders: The full list of resting buy and sell orders in a market. Depth of market is its display.
Order ticket Platforms and orders: The form used to place a trade: instrument, direction, volume, order type, price, stop loss and take profit.
Out-of-sample testing Risk and money: Testing a strategy on data it was not built or tuned on, to detect overfitting.
Over the counter (OTC) CFDs and markets: Trading directly between parties rather than on an exchange. Forex and CFDs are OTC markets.
Overbought Technical analysis: An RSI reading above 70, meaning the market has risen unusually fast. Useful in ranges, misleading in trends.
Overconfidence Risk and money: Reading a winning streak as proof of skill and increasing size or loosening rules as a result.
Overfitting Technical analysis: Tuning a strategy or indicator until it fits past data, capturing that period's noise so that it fails on new data.
Oversold Technical analysis: An RSI reading below 30, meaning the market has fallen unusually fast.

P

Partial close Platforms and orders: Closing part of an open position while leaving the rest running.
Payout Prop trading: The transfer of a trader's profit share from the firm, on a schedule and after review. The only point at which prop trading profit becomes real money.
Payout cap Prop trading: A limit on how much can be withdrawn from a funded account in one period.
PCE (personal consumption expenditures) Fundamental analysis: The Federal Reserve's official inflation target measure, released after CPI.
Pending order Platforms and orders: A limit or stop order waiting for its price. Carries no market risk until filled; give it an expiry and review it each session.
Pine Script Platforms and orders: TradingView's language for writing indicators and strategies.
Pip Forex: The standard unit of price movement: the fourth decimal place on most pairs and the second on yen pairs. From 1.1000 to 1.1001 is one pip.
Pip value Forex: The money one pip of movement is worth on a given position, in your account currency. Position size times pip size, converted where the quote currency differs from the account currency.
Pipette Forex: One tenth of a pip, shown as a fifth decimal on most pairs. Used to quote spreads more finely.
Pivot point Technical analysis: A level calculated from the previous period's high, low and close, with supports and resistances derived from it. Widely watched intraday.
PMI (purchasing managers' index) Fundamental analysis: A monthly business survey scored around 50: above is expansion, below is contraction. Flash PMIs are the most timely broad indicator.
Policy rate Fundamental analysis: The benchmark short-term interest rate a central bank sets, such as the federal funds rate or Bank Rate.
Position sizing Risk and money: Choosing the lot size so that the distance to the stop loss risks a set share of the account: risk amount divided by stop pips divided by pip value per lot.
Position trading Risk and money: Holding trades for weeks to months on a fundamental view.
PPI (producer price index) Fundamental analysis: Inflation at the producer level, a leading indicator of consumer prices.
Priced in Fundamental analysis: Already reflected in the price. An expected event moves the market little on the day because the move happened as the expectation formed.
Prime broker Brokers: A large bank or firm that gives brokers access to interbank liquidity. Prime-of-prime firms extend that access to smaller brokers.
Process goal Risk and money: A goal about actions within your control, such as taking every valid setup, rather than about money.
Professional client Brokers: A status under FCA and EU rules that unlocks higher leverage in exchange for giving up retail protections such as negative balance protection.
Profit factor Risk and money: Gross profit divided by gross loss over a period. Above 1 is profitable; 1.5 or more after costs is robust.
Profit split Prop trading: The share of funded-account profit the trader keeps, typically 80 percent rising to 90 or more.
Profit target Prop trading: The percentage gain required to pass a phase, typically 8 to 10 percent then 5 percent. Its ratio to the maximum loss measures difficulty.
Prop firm Prop trading: A proprietary trading firm. Online, a company that sells evaluations and pays a profit split to traders who pass and trade its simulated accounts.
Proprietary platform Platforms and orders: A trading platform built by the broker itself rather than licensed from MetaQuotes or Spotware. Often well integrated; not portable to other brokers.
Pullback Technical analysis: A temporary move against the trend before it resumes. Where trend traders look to enter.
Purchasing power parity Fundamental analysis: The idea that exchange rates should in the long run equalise the price of goods between countries, so high-inflation currencies weaken over years.

Q

Quantitative easing (QE) Fundamental analysis: A central bank buying bonds to push longer-term rates down. Usually weakens the currency; quantitative tightening is the reverse.
Quote Forex: A two-way price, bid and ask, offered for an instrument at a moment in time.
Quote currency Forex: The second currency in a pair, in which the price is expressed. In EUR/USD the quote currency is the dollar and the price is dollars per euro.

R

R-multiple Risk and money: A trade's result as a multiple of the amount risked: a trade risking 100 dollars that makes 250 is a 2.5R win.
Range Technical analysis: A period in which price moves sideways between a ceiling and a floor touched several times.
Raw spread Brokers: The market spread passed through by a broker without mark-up, often near zero in the majors, on an account that charges a commission instead.
Real interest rate Fundamental analysis: The nominal rate minus inflation. Capital chases real returns, so real rate differentials explain currency moves better than nominal ones.
Recession Fundamental analysis: Commonly defined as two consecutive quarters of falling GDP. Brings rate cuts and usually a weaker currency.
Recovery Risk and money: The gain needed to return to a previous equity peak: loss divided by one minus loss, so a 20 percent loss needs a 25 percent gain.
Recovery scam Brokers: A follow-up fraud in which someone offers to recover money lost to a scam broker for an upfront fee, usually run by the same people.
Regulation Regulation: Licensing and supervision of a broker by a financial authority that sets rules on client money, execution, marketing and capital, and can enforce them.
Regulator Regulation: The financial authority that licenses and supervises brokers in a jurisdiction, such as the FCA, ASIC or CySEC.
Regulatory register Regulation: A regulator's public list of licensed firms, showing name, licence number, status, permitted activities and website. The only reliable way to verify a licence.
Required margin Risk and money: The margin a single position needs.
Requote Platforms and orders: A broker's refusal to fill at the clicked price, with an offer of a new price. A feature of instant execution.
Reset Prop trading: Restarting a failed evaluation at a discounted price.
Resistance Technical analysis: A price zone where rallies have stalled before, because sellers appear.
Retail sales Fundamental analysis: Monthly consumer spending. Volatile month to month; the trend matters more than any one print.
Retail trader Forex: An individual trading their own money through a broker, usually on margin. The smallest group by volume and the largest by number.
Retest Technical analysis: Price returning to a broken level from the other side and holding, confirming the breakout and the level's role reversal.
Revenge trading Risk and money: Trading to recover a loss rather than to follow a setup, usually larger and sooner than the plan allows.
Review Risk and money: The scheduled reading of the journal, daily, weekly, monthly and quarterly, with fixed questions.
Risk currency Forex: A currency that rises with global risk appetite and falls without it, such as the Australian and New Zealand dollars.
Risk management Risk and money: The set of rules that limit what any trade, day, week or drawdown can cost: position sizing, stops, loss limits and correlation control.
Risk per trade Risk and money: The share of the account risked if a trade hits its stop. One percent is the conventional figure; two is the ceiling.
Risk-to-reward ratio Risk and money: The distance to the target divided by the distance to the stop. At 1:2 you risk one unit to make two, and need a win rate above 33 percent to profit before costs.
Role reversal Technical analysis: Broken resistance acting as support on the next pullback, or broken support acting as resistance.
Rollover Forex: The nightly process by which a broker closes and reopens an open position for the next day, applying the swap.
Round number Technical analysis: A price such as 1.1000 or 150.00 that attracts orders and often acts as a level.
Round-trip cost Brokers: The total cost of opening and closing a trade: the spread plus commission on both sides, expressed in pips or money per lot.
RSI (relative strength index) Technical analysis: A momentum indicator on a 0 to 100 scale comparing recent gains with recent losses. Above 70 is called overbought, below 30 oversold; divergence is its most useful reading.

S

Safe-haven currency Forex: A currency that strengthens when markets are nervous: the US dollar, the Japanese yen and the Swiss franc.
Sample size Risk and money: The number of trades a result is based on. Fifty to a hundred is the minimum before results begin to separate skill from luck.
Scaling plan Prop trading: A schedule under which a firm increases a funded account's balance, often 25 percent every few months of profit, up to a cap.
Scaling up Risk and money: Increasing position size after the record justifies it, slowly and by the plan, never in the week after a big win.
Scalping Risk and money: Holding trades for seconds to minutes for small gains. The style most sensitive to spreads and hardest to make pay.
Session overlap Forex: The hours when two sessions are open at once. London and New York overlap for about four hours in the afternoon UTC, the most liquid period of the day.
Setup Risk and money: The conditions a strategy requires to be present before an entry is considered.
Share CFD CFDs and markets: A CFD on an individual company's shares, allowing leveraged long and short positions without owning the stock.
Short Forex: A position that profits if the price falls. Going short a pair means selling the base currency.
Signal line Technical analysis: The 9-period EMA of the MACD line; crossovers between the two are MACD's main signal.
Simulated account Prop trading: An account trading at real prices with no real money in the market. What most prop firm evaluations and funded accounts are.
Slippage Platforms and orders: The difference between the expected and actual fill price, caused by movement during transmission or thin liquidity. Normal in both directions; one-sided slippage is a warning sign.
Speculation Forex: Trading to profit from an expected price move rather than to make a payment or hedge an exposure. Retail forex trading is speculation.
Spot forex Forex: A trade to exchange currencies at the current price, settled two business days later. Retail brokers roll spot positions over nightly so they stay open.
Spread Forex: The difference between the bid and the ask, measured in pips. It is the first cost of every trade and the main income of spread-only brokers.
Standard account Brokers: An account priced with a marked-up spread and no commission. Simple and usually best for small or occasional trading.
Standard lot Forex: 100,000 units of the base currency, entered as 1.00 on most platforms. One pip on a USD-quoted pair is worth 10 dollars.
Static drawdown Prop trading: A maximum loss limit measured from the starting balance that never moves. Profit builds a cushion.
Stop loss Platforms and orders: An order attached to a position that closes it at a set price if the market moves against you. Fills as a market order, so it can slip in a fast market or gap.
Stop order Platforms and orders: An order that waits to buy above the current price or sell below it, becoming a market order when triggered. Used for breakout entries and stop losses.
Stop-out Risk and money: The automatic closing of positions by the broker when margin level falls below its stop-out threshold, largest loser first.
STP (straight-through processing) Brokers: A broker model that routes client orders directly to liquidity providers, earning a mark-up on the spread rather than taking the other side.
Support Technical analysis: A price zone where declines have stopped and reversed before, because buyers defend it.
Surprise Fundamental analysis: The difference between a released figure and the consensus forecast, which is what the price reacts to.
Swap Forex: The overnight interest charged or credited on an open position, reflecting the interest-rate difference between the two currencies plus any broker mark-up. Usually tripled on Wednesdays.
Swap-free (Islamic) account Brokers: An account that charges and pays no overnight interest, offered for clients whose faith forbids it. Usually replaced by a fixed fee after a grace period.
Swing high Technical analysis: A peak with lower highs on either side. Marks resistance and defines trend structure.
Swing low Technical analysis: A trough with higher lows on either side. Marks support and defines trend structure.
Swing trading Risk and money: Holding trades for days to weeks on four-hour and daily charts. The sensible starting style for most beginners.
Swiss National Bank Fundamental analysis: Switzerland's central bank, which meets quarterly and has a history of intervening to weaken the franc, including the 2015 floor removal.
Symbol specification Platforms and orders: The platform's record for an instrument: contract size, pip size, margin percentage, swap rates, trading hours and minimum trade size.

T

Take profit Platforms and orders: An order attached to a position that closes it at a set price if the market moves in your favour. Fills as a limit order, at its price or better.
Tier-one regulator Regulation: A regulator whose licence requires segregated client money, negative balance protection and a compensation scheme or its equivalent: the FCA, ASIC, CySEC and other EU regulators, MAS, JFSA and similar.
Tier-three regulator Regulation: A registration that permits a broker to operate without doing much to protect the client, typical of small offshore centres.
Tightening Fundamental analysis: Raising interest rates or withdrawing stimulus to cool demand and inflation. Usually strengthens the currency until the end of the cycle is priced.
Time limit Prop trading: A maximum period for completing a phase. Many firms have removed it.
Timeframe Platforms and orders: The period each bar or candle on a chart represents, from one minute to one month. Sets the holding period and the noise level.
Trade checklist Technical analysis: A written list of conditions a trade must meet before it is taken: trend, level, signal, volatility, risk and timing.
Trading journal Risk and money: A record of every trade with its setup, execution, state of mind and result, from which performance is measured and discipline checked.
Trading plan Risk and money: The document that governs the business of trading: goals, capital, strategy, schedule, risk, routine, contingencies and review.
Trading psychology Risk and money: The emotions and biases that override plans, fear, greed, FOMO, revenge, overconfidence and loss aversion, and the rules that counter them.
Trading routine Risk and money: The fixed sequence of preparation, trading and journalling around each session, designed to remove decisions from the worst moments.
Trading session Forex: The hours during which a major financial centre dominates trading: Sydney, Tokyo, London and New York. Session times shift with daylight saving.
Trading strategy Risk and money: A fixed set of rules covering market, condition, setup, entry, stop, exit, risk and filters, so that every trade is the same decision.
TradingView Platforms and orders: The most used charting platform in retail trading, with a free plan and broker integration that lets you trade from the chart at supporting brokers.
Trailing drawdown Prop trading: A maximum loss limit that follows the account's highest balance or equity upwards, so profit raises the floor. Much harder than static.
Trailing stop Platforms and orders: A stop loss that follows the price at a set distance as the trade moves in your favour and never moves back. On MetaTrader desktop it runs only while the terminal is open.
Transparency Prop trading: How openly a firm states its legal entity, people, terms and payout record. A prop firm's transparency stands in for regulation.
Trend Technical analysis: A sequence of swings in one direction. An uptrend makes higher highs and higher lows; a downtrend the reverse.
Triangle Technical analysis: A pattern of converging highs and lows showing compression before a breakout. Ascending, descending or symmetrical.
Two-factor authentication Platforms and orders: A second login check, such as a code from an app, that protects a trading account against a stolen password. Enable it wherever offered.
Two-step challenge Prop trading: An evaluation with two phases, typically a 10 percent target then 5 percent, before funding. Cheaper with looser limits than one-step.

U

Unemployment rate Fundamental analysis: The share of the labour force without work. A rise is dovish for the currency.
Used leverage Risk and money: Another name for effective leverage: exposure over equity.
Used margin Risk and money: The total required margin of all open positions.

V

Variance Risk and money: The natural spread of results around a strategy's average, which produces winning and losing streaks that say nothing about the next trade.
Volatility Forex: How much and how fast a price moves. Measured by indicators such as the average true range; higher volatility means wider stops and larger swings.
Volume (order size) Platforms and orders: The size of an order in lots on the order ticket. A misplaced decimal here is the most expensive typo in trading.
VPS (virtual private server) Platforms and orders: A remote computer that runs a trading platform around the clock, used for expert advisors and low-latency execution.

W

Wage growth Fundamental analysis: The rate at which pay is rising, which feeds services inflation and central bank decisions.
Wage-price spiral Fundamental analysis: A loop in which higher prices drive higher wages, which drive higher prices. Central banks raise rates partly to prevent it.
Warning list Regulation: A regulator's published list of unauthorised firms, clones and scams. Worth searching before any deposit.
Watchlist Platforms and orders: The list of instruments a platform shows prices for. Called Market Watch in MetaTrader. Keep it to the pairs you trade.
Web platform Platforms and orders: A browser-based version of a trading platform, needing no installation and usually omitting automation.
Weekend holding Prop trading: Keeping positions open over the Friday close. Forbidden or restricted to swing accounts at many prop firms because of gap risk.
Weekend risk Forex: The risk of a price gap between Friday's close and Monday's open, which no stop loss can protect against.
Wick Technical analysis: The thin line above or below a candle's body, reaching the period's high or low. A long wick shows rejection of those prices.
Win rate Risk and money: The share of trades that make money. Meaningless without average win and loss.

Y

Yield spread Fundamental analysis: The difference between two countries' bond yields, which often leads their currency pair.