Glossary
Order Book
An order book displays all pending buy and sell orders for an asset at various price levels, showing market depth and supply/demand.
Pip
A pip is the smallest standard unit of price change in forex trading. For most pairs, it equals 0.0001 (one ten-thousandth). Essential for measuring profit and loss.
Price Action
Price action trading focuses on raw price movement without indicators. Traders analyze candlestick patterns, support/resistance, and chart formations.
Profit and Loss (P&L)
P&L measures the financial gain or loss from trading activity. Can be realized (closed trades) or unrealized (open positions).
Resistance
Resistance is a price level where selling pressure is strong enough to prevent the price from rising further. It acts as a ceiling on price movement.
Risk Management
Risk management is the process of identifying, analyzing, and controlling trading risks. It includes position sizing, stop losses, and portfolio diversification.
Rollover / Swap
Rollover or swap is the interest earned or paid for holding a forex position overnight. It is based on the interest rate differential between the two currencies.
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. Used to identify overbought and oversold conditions.
Short Position
A short position means selling an asset first, then buying it back later. Traders profit when the price falls. Also called shorting or going short.
Slippage
Slippage is the difference between the expected price of a trade and the price at which it actually executes. Common during high volatility or low liquidity.