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95 essential trading terms explained
Master the language of trading with our comprehensive glossary. Each term includes clear definitions, real-world examples, and related concepts to build your trading vocabulary.
The smallest price movement in forex, typically the 4th decimal place.
A standardized unit measuring trade size in forex.
Using borrowed capital to increase potential returns.
The difference between the bid and ask price.
An order to automatically close a position at a specified price to limit losses.
The decline from a peak to a trough in account balance.
The collateral required to open and maintain a leveraged position.
The potential profit compared to potential loss on a trade.
The first currency listed in a currency pair.
The highest price a buyer is willing to pay.
Volatility bands that expand and contract based on price movement.
When price breaks a significant swing point, signaling trend continuation.
When price breaks below a support level.
A failed order block that becomes a zone for opposite entries.
The point where a trade has zero profit or loss.
When price moves beyond a defined support or resistance level.
A chart type showing open, high, low, and close prices.
The first sign of a potential trend reversal in market structure.
A fee charged by brokers for executing trades.
When multiple technical factors align at the same price level.
A period of sideways price movement within a range.
A pause in price that precedes the continuation of the existing trend.
Two currencies quoted against each other in forex trading.
A price imbalance shown by a gap between three candles.
When price briefly breaks a level then reverses back.
Mathematical ratios used to identify potential support/resistance.
The global marketplace for trading national currencies.
The amount available to open new positions.
Using borrowed capital to increase potential returns.
An order to buy or sell at a specific price or better.
How easily an asset can be bought or sold without affecting price.
A quick move to take out stops before reversing direction.
Areas where stop losses and pending orders cluster, creating tradable liquidity.
Price briefly moving past a key level to take liquidity before reversing.
Buying an asset expecting the price to rise.
A standardized unit measuring trade size in forex.
A trough that falls below the previous trough in a downtrend.
Shows the relationship between two moving averages.
The collateral required to open and maintain a leveraged position.
A warning that equity has fallen below required margin levels.
A significant change in the pattern of highs and lows indicating trend change.
1,000 units of the base currency.
10,000 units of the base currency.
When price returns to a zone to 'mitigate' trapped orders.
An indicator that smooths price by averaging over a set period.
Closing a portion of an open position to secure profits.
The smallest price movement in forex, typically the 4th decimal place.
One-tenth of a pip, the fifth decimal place.
The smallest price increment in a trading instrument.
The number of units or lots traded in a single position.
Determining how much capital to risk on a single trade.
A price level where selling pressure prevents further rise.
Individual traders trading with personal funds.
When price returns to a broken level before continuing.
A temporary reversal in price against the prevailing trend.
Strategies to protect trading capital from excessive losses.
The percentage or dollar amount risked on a single trade.
The potential profit compared to potential loss on a trade.
A momentum indicator measuring overbought/oversold conditions.
Gradually adding to a position as it moves in your favor.
A strategy of making many quick trades for small profits.
Selling an asset expecting the price to fall.
The difference between expected and actual execution price.
Institutional traders and banks that move markets.
The difference between the bid and ask price.
100,000 units of the base currency.
Price movement that triggers clusters of stop losses before reversing.
An order to automatically close a position at a specified price to limit losses.
A price level where buying pressure prevents further decline.
Interest paid or earned for holding positions overnight.
A local peak in price action before a pullback.
A local trough in price action before a bounce.
Holding positions for days to weeks to capture larger moves.
An order to automatically close a position at a target price to secure gains.
The time period each candlestick represents on a chart.
Analyzing from higher to lower timeframes for trade planning.
Actions taken while a trade is open to optimize the outcome.
Your directional expectation for the market.
A stop loss that moves with price to lock in profits.
The general direction of market price movement.
A change in the overall direction of price movement.
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