Jump to Section:
| A | B | C | D | E |
|---|---|---|---|---|
| F | G | H | I | J |
| K | L | M | N | O |
| P | Q | R | S | T |
| U | V | W | Y | Z |
A
| Account Balance | The amount of money in a trading account, not including any open trades. |
|---|---|
| Account Currency | The currency in which a trader's account is denominated, such as USD or EUR. |
| Accumulation | A phase in the market where investors are actively buying assets, causing a gradual price increase. |
| ADR (Average Daily Range) | The average range between the high and low of a currency pair over a specific period, typically one day. |
| Agio | A fee or premium paid for exchanging one currency for another. |
| All-or-none (AON) | An order condition where the entire order must be filled, or it will not be executed. |
| Appreciation | An increase in the value of a currency relative to another currency. |
| Arbitrage | The practice of taking advantage of a price difference between two or more markets, buying low in one and selling high in another. |
| Ask Price | The price at which a broker or dealer is willing to sell a currency pair. |
B
| Base Currency | The first currency listed in a currency pair, against which the value of the other currency is measured. The base currency can also reference the currency that the trader's account settles in. For example, a US trader likely has an account with a USD base currency. |
|---|---|
| Bid Price | The price at which a broker or dealer will buy a currency pair. |
| Bid-Ask Spread | The difference between the bid price and the ask price of a currency pair. |
| Broker | An individual or firm that acts as an intermediary between buyers and sellers in the forex market. |
| Bear Market | A market condition where prices are falling or are expected to fall, typically associated with pessimism among investors. |
| Bull Market | A market condition where prices are rising or are expected to rise, typically associated with optimism among investors. |
| Bar Chart | A type of chart used in technical analysis that displays the opening, closing, high, and low prices of a currency pair over a specific period. |
C
| Candlestick Chart | A chart that displays the high, low, opening, and closing prices of a currency over a specific period. |
| Carry Trade | A strategy in which a trader borrows a currency with a low interest rate to fund the purchase of a currency with a higher interest rate. |
| CFD (Contract for Difference) | A contract that allows traders to speculate on price movements without owning the underlying asset. |
| Cross Currency Pair | A currency pair that does not involve the U.S. dollar, such as EUR/GBP. |
| Currency Pair | The quotation of two different currencies, with the value of one currency quoted against the other. |
D
| Day Trading | Buying and selling financial instruments within the same trading day. |
| Drawdown | A measure of the decline in the value of a trader's capital after a series of losing trades. |
E
| Economic Indicator | A statistical measure that provides insight into the economic performance of a country, such as GDP, inflation rate, or unemployment rate. |
| Entry Order | A pending order set to enter the market at a specific price level. It can be a buy stop, sell stop, buy limit, or sell limit order. |
| Equity | The total value of a trader’s account, including the initial deposit and any unrealized profits or losses from open positions. |
| Exchange Rate | The rate at which one currency can be exchanged for another. |
| Execution | The process of completing a buy or sell order in the forex market. |
F
| Foreign Exchange (Forex) | The global market where currencies are traded 24/5. |
| Forward Contract | A customized contract between two parties to exchange currencies at a future date and agreed-upon price. |
G
| Global Market | The worldwide market for trading financial assets. |
| Going Long | Buying a currency pair in anticipation that its value will increase. |
| Going Short | Selling a currency pair in anticipation that its value will decrease. |
| Gross Domestic Product (GDP) | The total market value of all final goods and services produced within a country in a given time period. |
H
| Hedging | A strategy used to reduce risk by taking opposite positions in correlated assets. |
| High-Frequency Trading (HFT) | A form of algorithmic trading with rapid order execution. |
I
| Inflation | The rate at which the general level of prices for goods and services rises, leading to a decrease in purchasing power. |
| Interest Rate Differential | The difference in interest rates between two currencies in a pair. |
| Intraday | Trading activity occurring within the same trading day. |
| Investment | The action or process of investing money for profit. |
| Isolated Margin | A type of margin mode in which a trader's collateral is used only for a specific trade, limiting potential losses to that trade. |
J
| Joint Account | A trading account shared by two or more individuals, where all account holders have equal access and responsibility. |
| JPY | The official currency code for the Japanese Yen, commonly traded in Forex. |
| Just-In-Time Hedging | A strategy where traders or businesses hedge currency risks only when they become imminent or unavoidable, minimizing unnecessary costs. |
K
| Key Level | A significant price level in the market, often identified through technical analysis, where strong support or resistance is expected. |
| Kiwi | A colloquial term for the New Zealand Dollar (NZD), often used by traders in the forex market. |
L
| Leverage | A mechanism allowing traders to control large positions with a small amount of capital. |
| Limit Order | An order to buy or sell a currency pair at a specific price or better. |
| Liquidity | The ease with which an asset can be bought or sold without affecting its price. |
| Long Position | A buy position in which the trader expects the asset price to increase. |
| Lot Size | The standardized trading size in Forex, usually defined as 100,000 units of the base currency for a standard lot. |
| Loss Limit | The maximum allowable loss for a trade or set of trades. |
M
| Margin | The amount of money required to open and maintain a leveraged trading position. |
| Market Order | An order to buy or sell a currency pair at the current market price. |
| MetaTrader 4/5 (MT4/MT5) | Popular forex trading platforms used by traders for analysis and execution of trades. |
N
| Net Exposure | The difference between a trader’s long and short positions in the forex market. It represents the overall market risk. |
| Net Position | The difference between total open long and short positions for a currency pair. |
O
| Open Position | A trade that has been executed but not yet closed. |
| Order | An instruction to execute a trade at a specific price or market condition. |
P
| Pip | The smallest price movement in a Forex quote, usually 0.0001 for most currency pairs. |
| Position | The amount of a currency held by a trader, either long or short. |
| Profit and Loss (P&L) | The amount of profit or loss a trader has made on their trades. |
Q
| Quote Currency | The second currency in a currency pair. For example, in EUR/USD, USD is the quote currency. |
R
| Realized Profit/Loss | The profit or loss from a closed trade. |
| Resistance Level | A price level where selling pressure may prevent further price increases. |
| Risk Management | Strategies used to minimize financial loss in trading. |
| Rollover | The process of extending the settlement date of an open position in forex trading, often involving interest payments. |
| Reversal | A change in the direction of a currency pair’s price trend. |
S
| Scalping | A trading strategy involving quick, small trades to profit from minor price changes. |
| Short Position | A sell position in which the trader expects the asset price to decrease. |
| Spread | The difference between the bid and ask prices of a currency pair. |
| Support | A price level at which a currency pair has historically had difficulty falling below. |
| Stop-Loss Order | An order to close a trade when the price reaches a specified level to limit losses. |
| Slippage | The difference between the expected price of a trade and the actual price at which it is executed. |
T
| Take-Profit Order | An order to close a trade at a specified price to lock in profit. |
| Technical Analysis | The analysis of price data, patterns, and indicators to forecast future price movements. |
| Trade Execution | The process of carrying out a trade order in the forex market. |
| Trading Platform | A software interface that allows traders to execute trades, manage accounts, and analyze markets. |
| Trend | The general direction in which the price of an asset is moving over a period of time. |
| Trendline | A line drawn on a chart to indicate the direction and speed of a price trend. |
U
| Unrealized Profit/Loss | The profit or loss on open trades that has not yet been closed. |
| USD | The official currency code for the U.S. Dollar, the most traded currency in Forex. |
| Unhedged Position | A trade that does not have a corresponding position to counteract the risk. |
V
| Volatility | The degree of variation in a currency pair's price over time. |
| Volume | The total number of transactions executed in the market within a specific period. |
| Vulnerability | The susceptibility of an asset or market to sudden price movements or shocks. |
W
| Weak Currency | A currency whose value is lower relative to other currencies. |
| Whipsaw | A sharp price movement in one direction followed by a sudden reversal. |
| Wedge Pattern | A chart pattern that indicates a potential reversal or continuation of a trend. |
Y
| Yard | A billion units. |
| Yield | The return on an investment or trade, often influenced by interest rates in Forex. |
Z
| Zero-Sum Game | A situation in trading where one trader's profit or loss is exactly balanced by the losses or profits of other traders. |
| Zig-Zag Indicator | A technical analysis tool used to identify trends and reversals by removing small price movements. |