Comprehensive dictionary of forex trading terms. Search and learn all the jargon used in currency trading.
Found 67 terms
The price at which you can buy a currency pair. Also called the 'offer' price.
The price at which you can sell a currency pair.
The difference between the bid and ask price. This is how brokers make money.
Percentage In Point - the smallest price movement in forex. Usually 0.0001 for most pairs.
Standard unit of currency traded. Standard lot = 100,000 units of base currency.
Borrowed capital to increase trading position size. Example: 1:100 means $1 controls $100.
Collateral required to open and maintain a leveraged position.
Broker's demand for additional funds when account equity falls below margin requirement.
Buying a currency pair, expecting it to rise in value.
Selling a currency pair, expecting it to fall in value.
The first currency in a pair. In EUR/USD, EUR is the base currency.
The second currency in a pair. In EUR/USD, USD is the quote currency.
Currency pairs that include USD and are most liquid (EUR/USD, GBP/USD, USD/JPY).
Currency pairs that don't include USD (EUR/GBP, EUR/JPY).
Pairs with one major currency and one from emerging economy (USD/ZAR, USD/TRY).
Order to automatically close a position at a specific price to limit losses.
Order to automatically close a position at a specific price to lock in profits.
Order to buy or sell immediately at current market price.
Order to buy or sell at a specific price or better.
Order placed to execute when price reaches a specified level.
Pending order to buy at a price below current market price.
Pending order to sell at a price above current market price.
Pending order to buy at a price above current market price (breakout order).
Pending order to sell at a price below current market price (breakdown order).
Difference between expected price and actual execution price.
Ease of buying/selling without affecting price. High liquidity = tight spreads.
Measure of price fluctuations. High volatility = larger price swings.
General direction of price movement. Can be uptrend, downtrend, or sideways.
Price level where buying pressure is strong enough to prevent further decline.
Price level where selling pressure is strong enough to prevent further rise.
When price moves beyond a support or resistance level.
Chart element showing open, high, low, and close prices for a time period.
Market sentiment expecting prices to rise.
Market sentiment expecting prices to fall.
Strategy of buying high-interest currency and selling low-interest currency.
Institution that manages a country's monetary policy (Fed, ECB, BoE).
Cost of borrowing money. Higher rates attract foreign investment.
Gross Domestic Product - total economic output of a country.
Consumer Price Index - measures inflation by tracking price changes.
Non-Farm Payrolls - US employment data released monthly, highly influential.
Federal Open Market Committee - sets US interest rates.
European Central Bank - manages monetary policy for Eurozone.
Bank of England - UK's central bank.
Bank of Japan - Japan's central bank.
Trading strategy making many quick trades to capture small price movements.
Opening and closing positions within the same trading day.
Holding positions for days to weeks to capture medium-term moves.
Long-term trading holding positions for weeks to months.
Comparison of potential profit to potential loss. Example: 2:1 means $2 profit for $1 risk.
Peak-to-trough decline in account value during losing period.
Current account value including open positions' unrealized P&L.
Total funds in account excluding unrealized P&L from open positions.
Available margin for opening new positions (Equity - Margin Used).
Ratio of equity to margin used. Lower = higher risk of margin call.
Automated trading program that executes trades based on algorithms.
Testing trading strategy on historical data to evaluate performance.
Practice account with virtual money to learn trading without risk.
Real trading account with actual money.
Volume of currency traded. Standard = 1.0, Mini = 0.1, Micro = 0.01.
Smallest price change. For most pairs = 0.00001 (5th decimal).
Interest paid or earned for holding positions overnight.
Process of extending settlement date for open positions (involves swap).
Price jump between closing and opening prices, common after weekends.
Relationship between two currency pairs moving together or opposite.
When price and indicator move in opposite directions, potential reversal signal.
Condition when price has risen too much, potential reversal down.
Condition when price has fallen too much, potential reversal up.
Pip, Lot, Spread, Bid, Ask, Long, Short
Market Order, Limit Order, Stop Loss, Take Profit
Leverage, Margin, Drawdown, Risk/Reward
Support, Resistance, Trend, Breakout, Volatility