Forex & Trading Glossary
Comprehensive glossary of forex, CFD, and trading terms. Learn key concepts like leverage, margin, pips, spreads, and more with clear definitions and examples.
A
Ask Price
The ask price is the lowest price a seller is willing to accept for a financial instrument. Also known as the …
→ATR (Average True Range)
ATR measures market volatility by calculating the average range of price candles over a specified period. …
→B
Balance
Account balance is the total cash in your trading account, excluding any open positions. It reflects deposits, …
→Bear Market
A bear market is a sustained period of declining prices, typically defined as a drop of 20% or more from …
→Bid Price
The bid price is the highest price a buyer is willing to pay for a financial instrument. It represents the …
→Bollinger Bands
Bollinger Bands consist of a middle SMA and two outer bands that measure volatility. They expand during high …
→Broker
A broker is a financial intermediary that facilitates trades between traders and the market. In forex, brokers …
→Bull Market
A bull market is a sustained period of rising prices, typically defined as an increase of 20% or more. …
→Buy Limit / Sell Limit
Pending orders to buy below or sell above the current price. Buy limit executes at a lower price; sell limit …
→C
Candlestick Pattern
Candlestick patterns are visual formations on price charts that indicate potential price reversals or …
→CFD (Contract for Difference)
A CFD is a derivative contract that lets traders speculate on price movements without owning the underlying …
→Chart Pattern
Chart patterns are recognizable formations on price charts that suggest future price direction. They include …
→Commission
Commission is a fee charged by brokers for executing trades. It can be a flat rate per lot, a percentage of …
→Currency Pair
A currency pair quotes two currencies against each other in forex trading. The first is the base currency, the …
→D
Day Trading
Day trading is buying and selling financial instruments within the same trading day. All positions are closed …
→Demo Account
A demo account is a practice trading account with virtual money. It replicates real market conditions, …
→Drawdown
Drawdown measures the decline from peak to trough in a trading account. It indicates the maximum loss a trader …
→E
ECN Broker
An ECN broker routes trades directly to a network of liquidity providers, offering tight spreads, transparent …
→Economic Calendar
An economic calendar lists scheduled economic events and data releases that can impact financial markets. …
→Equity
Equity is the current value of your trading account including unrealized profits and losses from open …
→F
Fibonacci Retracement
Fibonacci retracement uses horizontal lines to indicate areas of support or resistance at key Fibonacci levels …
→Forex (Foreign Exchange)
Forex is the global decentralized market for trading currencies. It is the largest financial market in the …
→Fundamental Analysis
Fundamental analysis evaluates currencies and assets by examining economic indicators, central bank policies, …
→G
Gap
A gap is a price level where no trading occurred, creating a visible jump on a chart. Common at market open or …
→Good Till Cancelled (GTC)
GTC is an order duration that keeps a pending order active until it is filled or manually cancelled by the …
→H
Hedging
Hedging is a risk management strategy that opens an opposing position to offset potential losses from an …
→High Frequency Trading (HFT)
HFT uses powerful computers to execute thousands of trades per second, exploiting tiny price differences. …
→I
Inflation
Inflation is the rate at which the general price level of goods and services rises, eroding purchasing power. …
→Interest Rate
Interest rates set by central banks are the most powerful driver of currency values. Rate changes affect …
→L
Leverage
Leverage allows traders to control large positions with small capital. Expressed as a ratio (e.g., 1:100), it …
→Limit Order
A limit order is a pending order to buy or sell at a specified price or better. It ensures price precision but …
→Liquidity
Liquidity describes how easily an asset can be bought or sold without affecting its price. High liquidity …
→Long Position
A long position means buying an asset with the expectation that its price will rise. Profits increase as the …
→Lot
A lot is the standard unit of measurement in forex trading. One standard lot equals 100,000 units of the base …
→M
MACD (Moving Average Convergence Divergence)
MACD is a trend-following momentum indicator that shows the relationship between two moving averages. It …
→Margin
Margin is the collateral required to open and maintain a leveraged trading position. It acts as a good faith …
→Margin Call
A margin call occurs when your account equity falls below the broker's margin requirement, prompting a warning …
→Market Order
A market order is an instruction to buy or sell immediately at the best available current price. It guarantees …
→Moving Average
A moving average smooths price data to identify trends. The most common types are Simple Moving Average (SMA) …
→O
Open Position
An open position is an active trade that has been executed but not yet closed. It carries unrealized profit or …
→Order Book
An order book displays all pending buy and sell orders for an asset at various price levels, showing market …
→P
Pip
A pip is the smallest standard unit of price change in forex trading. For most pairs, it equals 0.0001 (one …
→Price Action
Price action trading focuses on raw price movement without indicators. Traders analyze candlestick patterns, …
→Profit and Loss (P&L)
P&L measures the financial gain or loss from trading activity. Can be realized (closed trades) or unrealized …
→R
Resistance
Resistance is a price level where selling pressure is strong enough to prevent the price from rising further. …
→Risk Management
Risk management is the process of identifying, analyzing, and controlling trading risks. It includes position …
→Rollover / Swap
Rollover or swap is the interest earned or paid for holding a forex position overnight. It is based on the …
→RSI (Relative Strength Index)
RSI is a momentum oscillator that measures the speed and change of price movements on a scale of 0 to 100. …
→S
Short Position
A short position means selling an asset first, then buying it back later. Traders profit when the price falls. …
→Slippage
Slippage is the difference between the expected price of a trade and the price at which it actually executes. …
→Spread
The spread is the difference between the bid and ask price. It represents the cost of trading and is how most …
→Stop Loss
A stop loss is a predefined order that automatically closes a trade at a specified price to limit losses. It …
→Support
Support is a price level where buying pressure is strong enough to prevent the price from falling further. It …
→Swap
Swap is the interest differential between two currencies in a pair, charged or credited when a position is …
→T
Take Profit
Take profit is a pending order that automatically closes a trade when the price reaches a specified profit …
→Technical Analysis
Technical analysis studies price charts and statistical indicators to forecast future price movements. Based …
→Trailing Stop
A trailing stop automatically adjusts the stop loss level as the price moves in your favor, locking in profits …
→V
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