The Trader's Dictionary

The price at which the market is willing to sell an instrument — the price you buy at.

The first currency in a currency pair, against which the quote currency is valued. In EUR/USD, the euro is the base currency.

A market characterised by sustained falling prices and pessimistic sentiment.

The price at which the market is willing to buy an instrument — the price you sell at.

Volatility bands plotted at standard deviations above and below a moving average, widening and narrowing with volatility.

A price move beyond a defined support or resistance level, often accompanied by increased volume and volatility.

A market characterised by sustained rising prices and optimistic sentiment.

A chart element showing open, high, low and close for a period, with a body and wicks that visualize price action.

A strategy of borrowing in a low-yield currency to invest in a higher-yield one, profiting from the rate differential.

The exchange rate between two currencies calculated via a common third currency, usually the US dollar.

Two currencies quoted against each other, where you simultaneously buy one and sell the other.

The decline in account equity from a peak to a subsequent trough, expressed in currency or percent.

A pair combining a major currency with a currency from an emerging economy, typically with wider spreads and lower liquidity.

The total market risk held in open positions, measurable by notional value or as a percentage of account equity.

Horizontal levels drawn at key Fibonacci ratios (38.2%, 50%, 61.8%) used to identify potential support and resistance.

The completion of an order at a specific price; a "full fill" means the entire requested volume was executed.

The use of borrowed capital to control a larger market position with a smaller margin deposit, amplifying both gains and losses.

An order to buy below, or sell above, a specified price, seeking a more favourable entry than the market price.

The ease of buying or selling an asset without causing significant price impact, driven by active participation.

A firm — often a bank or institutional participant — that quotes continuous bid and ask prices to facilitate trading.

Buying an instrument with the expectation it will rise in value; "going long."

A standardized unit of trading volume. A standard lot is 100,000 units of the base currency; a mini lot is 10,000; a micro lot is 1,000.

Moving Average Convergence Divergence — an indicator showing the relationship between two moving averages to signal momentum and trend changes.

A currency pair that includes the US dollar and another major currency, e.g. EUR/USD, GBP/USD, USD/JPY.

The collateral required to open and maintain a leveraged position. Required margin depends on leverage and position size.

A notification that margin is insufficient to maintain open positions, requiring deposit of more funds or position reduction.

An instruction to buy or sell immediately at the best available current price.

A currency pair of two major currencies that does not include the US dollar, e.g. EUR/GBP, AUD/NZD.

The rate of change in price over time; indicators that measure it help gauge trend strength and likely continuation.

A line that smooths price action over a set number of periods, highlighting trend direction. Common types are SMA and EMA.

A live list of outstanding buy and sell orders at various price levels, showing market depth.

An order queued to execute only if the market reaches a specified price, such as a buy or sell limit/stop.

The smallest standard price move for a currency pair — typically 0.0001 for most pairs and 0.01 for JPY pairs.

A fractional pip equal to one-tenth of a pip, shown in the fifth (or third for JPY) decimal place.

Determining how large a trade to take based on account size and acceptable risk per trade.

The second currency in a pair, used to price the base currency. In EUR/USD, the US dollar is the quote currency.

When a broker cannot fill an order at the requested price and offers a new one, common in fast or illiquid markets.

A price level where selling pressure tends to cap further upside, often a local high.

A partial reversal of a prior move before the original trend resumes, often measured with Fibonacci levels.

The ratio of potential loss to potential gain on a trade, used to evaluate whether a setup is worth taking.

Relative Strength Index — a momentum oscillator from 0 to 100 that flags overbought (>70) or oversold (<30) conditions.

Selling an instrument you do not own (via a CFD or borrowed asset) to profit from a price decline; "going short."

The difference between the expected price of an order and the price at which it is actually filled.

The difference between the bid (sell) and ask (buy) price of an instrument, representing a key trading cost.

An order that becomes a market order once a specified trigger price is reached, used to enter or exit positions.

A stop order placed to close a losing position at a predefined price, capping downside risk.

The point at which a broker automatically closes positions to prevent account equity from going negative.

A price level where buying interest tends to prevent the price from falling further, often a local low.

The interest credited or debited for holding a leveraged position overnight, based on the interest-rate difference between the two currencies.

A limit order that automatically closes a profitable position once a target price is reached.

The smallest single price movement of an instrument, and the count of price changes over time.

A stop-loss that follows the price by a set distance as it moves favourably, locking in profit while limiting loss.

A diagonal line drawn across consecutive highs or lows to visualize the prevailing market direction.

A measure of how much and how quickly prices fluctuate; higher volatility means wider ranges and greater risk.

The number of units traded in a given period, used to confirm the strength of moves and breakouts.