Skip to content

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.