Forex Glossary

Using computer programs to execute trades based on predefined rules.

An indicator measuring market volatility.

Testing a strategy against historical data to evaluate performance.

The first currency in a currency pair, representing what you are buying or selling.

An expectation that prices will fall; pessimistic market sentiment.

The bid is the selling price; the ask is the buying price.

Volatility bands placed above and below a moving average.

Price movement through a significant support or resistance level.

Entering trades when price breaks through key levels.

A company that provides access to the forex market and executes trades.

An expectation that prices will rise; optimistic market sentiment.

A pending order to buy below the current market price.

A pending order to buy above the current market price.

A chart type showing open, high, low, and close prices for a period.

Borrowing in a low-interest currency to invest in a higher-yielding one.

The institution responsible for monetary policy and currency management.

Two parallel trendlines containing price movement.

A period of sideways price movement with no clear trend.

Automatically replicating the trades of experienced traders.

How closely two currency pairs move in relation to each other.

A measure of average price changes for consumer goods and services.

Currency pairs that do not include the US dollar.

Two currencies quoted together, showing the exchange rate between them.

Opening and closing all trades within the same trading day.

When price and an indicator move in opposite directions.

Spreading risk across different trades, pairs, or strategies.

A candlestick pattern where open and close are nearly equal.

A market condition with consistently lower highs and lower lows.

The decline from a peak balance to a subsequent low point.

A trading network that matches buy and sell orders automatically.

A schedule of upcoming economic events and data releases.

A two-candle reversal pattern where the second candle completely engulfs the first.

Your account balance plus or minus any unrealized profits or losses.

The price of one currency expressed in terms of another.

Currency pairs combining a major currency with an emerging market currency.

An automated trading program for MetaTrader platforms.

A moving average that gives more weight to recent prices.

Support and resistance levels based on Fibonacci ratios.

The global decentralized market for trading currencies.

The available funds in your account to open new positions.

The total value of goods and services produced by a country.

A bullish reversal candlestick with a small body and long lower wick.

Opening opposing positions to reduce risk exposure.

The rate at which the general price level rises over time.

The network where major banks trade currencies with each other.

The cost of borrowing money, set by central banks.

Borrowed capital that amplifies trading positions beyond your actual deposit.

An order to buy or sell at a specific price or better.

How easily an asset can be bought or sold without affecting its price.

A trade that profits when the currency pair's price rises.

A standardized trading unit representing 100,000 units of the base currency.

Moving Average Convergence Divergence, a momentum indicator.

The most traded currency pairs, all including the US dollar.

The deposit required to open and maintain a leveraged trading position.

A warning that your account lacks sufficient margin to maintain open positions.

The ratio of equity to used margin, expressed as a percentage.

A broker that provides liquidity by taking the opposite side of trades.

An order to buy or sell immediately at the current market price.

The most popular forex trading platform, available as MT4 and MT5.

A trading unit equal to 1,000 units of the base currency.

A trading unit equal to 10,000 units of the base currency.

An indicator that smooths price data to identify trends.

Trading based on economic news releases and events.

A monthly US employment report that moves markets significantly.

Trading conducted directly between parties, not on a centralized exchange.

A condition where prices have risen too far, too fast and may reverse.

A condition where prices have fallen too far, too fast and may bounce.

An order waiting to execute when specific price conditions are met.

The smallest price movement in a currency pair, typically the fourth decimal place.

The monetary value of a one-pip price movement for a specific position size.

A fractional pip, representing the fifth decimal place in most currency pairs.

Calculated support and resistance levels based on previous price data.

The number of lots or units traded in a single transaction.

Holding trades for weeks to months based on long-term trends.

The second currency in a pair, showing the price of one unit of the base currency.

Trading between established support and resistance levels.

Net profit divided by maximum drawdown, measuring risk-adjusted returns.

A price level where selling pressure tends to prevent further advances.

The percentage of account capital risked on a single trade.

The potential loss versus potential gain of a trade.

The process of extending a trade settlement to the next day.

A momentum oscillator measuring overbought and oversold conditions.

A strategy involving many small, quick trades to capture tiny price movements.

A pending order to sell above the current market price.

A pending order to sell below the current market price.

A trade that profits when the currency pair's price falls.

A moving average that weights all periods equally.

The difference between expected and actual execution price.

The difference between the bid and ask price of a currency pair.

An order that automatically closes a trade at a specified loss level.

An order that becomes active when a specified price is reached.

Automatic position closure when margin level falls below a critical threshold.

Order execution that passes trades directly to liquidity providers.

A price level where buying pressure tends to prevent further declines.

The interest paid or earned for holding a position overnight.

Holding trades for several days to weeks to capture price swings.

An order that automatically closes a trade at a specified profit level.

A period when a major financial center is actively trading.

A stop loss that automatically moves with the price in your favor.

The general direction of price movement over time.

A strategy that trades in the direction of the established trend.

A line connecting swing highs or lows to visualize the trend.

A market condition with consistently higher highs and higher lows.

The degree of price fluctuation in a currency pair over time.