Forex trading glossary


Taking advantage of different prices of an asset in two markets is called arbitrage. For example, buying an asset for 100 dollars in market A and selling it for 105 dollars in market B.

it is the highest price at which a trader is willing to pay to buy a particular asset or currency.

it refers to something valuable, such as a currency.

When a trader buys an asset, the price reduces, and if the trader buys more, the price drops even more. This is known as averaging down.


The first currency of any currency pair is called the base currency. for example, the USD is the base currency in this currency pair: USD/EUR

It describes a situation in which a market is experiencing price declines.

It describes a situation in which a market is experiencing increasing prices.

It is the lowest price at which a trader is willing to sell a particular asset or currency.

it is an order to buy an asset or currency at or lower than a specific price level and it helps traders to control the amount of money they pay to buy something.

Traders that believe a market, asset, or financial instrument is moving down are known as bears.

Bonds are a type of financial investment in which you lend money to a company for a set length of time. Depending on the type of institution you are lending to, they normally come in two varieties: corporate bonds and government bonds.

Bulls are investors who believe that the value of a market, instrument, or sector will rise in the future.


it is a trading strategy in which a trader borrows an amount of money with a low-interest rate and invests that money in an asset that provides a high rate of return.

A trade that is no longer active and its profits or losses are realized.

the final value of a currency or an asset at the end of a specific time frame (usually regular market hours)

This is the final price at which an asset was traded on a given day.

The fee that an investment broker charges for making trades on behalf of a client is known as commission.

A commodity is a fundamental physical asset that is frequently used as a raw material in manufacturing goods or services.

an increase in the value of a currency compared to another one.

a currency pair is what’s being traded within any forex transaction, and it includes two different currencies; the first one is called the base currency, and the second one is called quote currency. For example: USD/EUR

these contracts specify the price of a currency for a predetermined date in future.


A diagram that analyzes the price movements of a specific asset for the period of one working day.

A trade that is opened and closed on the same day.

A forex trading account that is virtual and works with virtual money. Novice traders can use it to explore the market and become familiar with the environment of a forex market.

it represents the volume of bids and asks of a currency or an asset at the current best prices.

after a currency plunges, the gap between the peak and the new low level is called drawdown.


Equity is a crucial concept in finance that takes on different meanings depending on the situation. “Shareholders’ equity,” which is calculated by subtracting a company’s total assets from its total liabilities, is perhaps the most common type of equity.

ETF is an abbreviation for exchange traded fund, which is a type of investment security that can be bought and sold on exchanges.

The expiry date is the date on which a trading position automatically closes.

the value of a currency in terms of another currency.

putting into motion or the process of completing a trade is called execution.

it represents the amount of money that an investor may lose in a particular trade.


The Federal Reserve Bank of the United States is the central bank in charge of monetary and financial stability in the country. It is part of a larger system known as the Federal Reserve system, which includes 12 regional central banks located in major cities throughout the United States.

A fiat currency is a national currency that is not linked to the price of a commodity like gold or silver. The value of fiat money is mainly determined by the public’s trust in the currency’s issuer, which is usually the government or central bank of that country.

A Fibonacci retracement uses percentages and horizontal lines drawn on price charts to identify possible support and resistance levels. Traders can use this information to decide when to open and close positions and when to use stop losses and limit orders.

the price at which an order is executed.

when traders use the “fill or kill” strategy, they want a transaction to be executed only at a specific price, and if the order does not fulfil that price, it will be cancelled.

this chart focuses on the price movements of a currency with different predetermined time periods.

this term is used to describe currently unstable exchange rates which are fluctuating.

this is a trading strategy based on which you can make more profit by buying and selling a currency in a short period of time compared to longer periods.

this system sends signals to users based on the current situation of a market. The signal may lead to the automatic execution of a trade.

the current price at which a currency can be bought or sold.

it is a software that gives you advice about your activities. It helps you find the right time to buy or sell an asset.

A futures contract is an agreement between two parties to buy or sell a specific asset at a predetermined price at a future date.

finding the effect of political or economic events and news on the forex market. Traders can use this information to predict the future prices of an asset.


GDP is an abbreviation for gross domestic product, which is the total value of goods and services produced in a country over a given time period. It is used to gauge the size and health of a country’s economy.


it refers to the currencies which are usually stable during political or economic instabilities. For example, US Dollar and Euro.

a strategy that helps investors reduce the risks of their activities. In this strategy, a trader makes different investments in a way that they balance each other out.

Heikin Ashi is a chart pattern that is commonly utilized in technical analysis. Heikin Ashi charts are similar to candlestick charts, except that Heikin Ashi charts employ daily price averages to depict an asset’s average price movement.


the actions of a central bank that effect the value of a nation’s currency.

Ichimoku Cloud is a technical indicator that identifies levels of support and resistance as well as a measure of momentum, all of which help traders make trading decisions. Ichimoku Kinko Hyo, is a Japanese term that roughly translates to “one-look equilibrium chart.” This is because traders can get a wide range of information with just one glance.

An index is a collection of financial assets that serve as a performance indicator for a specific industry. The plural term of the index is indices.

The monetary payment for the privilege of borrowing money is known as interest, and it is usually stated as an annual percentage rate. The amount of money received by a lender or financial organization in exchange for giving out money is referred to as interest.

Inflation is defined as a rise in the price of goods and services in a given economy. Inflation may also be thought of as a currency devaluation since each unit of the currency will be worth less of any item or service due to inflation.


the ratio of a company’s loan capital to the value of its ordinary shares. For example, a ratio of 1:100 increases traders buying power by 100 times.

an order to buy or sell an asset with a restriction on the maximum price to be paid or the minimum price to be received. The order can only be executed at a predetermined price or even better than that. But the execution of the order is not guaranteed.

The amount of available currency at the moment which can be used in active trading. Also, it refers to the ease at which an asset can be converted into cash.

buying an asset and expecting an increase in its value in the future.

it refers to a standard amount of an asset traded in an exchange or broker. One lot equals 100,000 units of a currency or 100 units of shares for stocks.


it is the borrowed capital from a broker to open a position, and it refers to the difference between the total value of an investment and the borrowed amount.

a notification from the brokers that asks you to deposit more money in your account to keep your remaining position active by increasing your margin.

an order that needs to be executed quickly at the best price available.

A market maker is a person or organization that buys and sells significant quantities of a certain asset in order to facilitate liquidity.

One of the world’s most prominent electronic trading platforms is called MetaTrader.

it refers to 1000 units of a base currency.

In technical analysis, a moving average is a typical indicator used to analyze asset price movements while reducing the impact of random price surges.


Non-farm payrolls are a monthly statistic that shows how many people work in manufacturing, construction, and goods industries in the United States.

Net change is the difference between the current trading session’s closing price and the previous trading session’s closing price. The previous day’s market performance is reflected in the net change, which can be either positive or negative.


it refers to the smallest possible price change in an exchange rate, and it stands for Percentage In Point.

A portfolio is a collection of assets held by a trader or trading institution. Stocks, bonds, commodities, and derivatives are all examples of assets that can be included in a portfolio.

The act of closing a position after an increase in prices to collect the profits.

A position is an expression of a trader’s market commitment, or exposure. It is a financial term that refers to a trade that is currently profitable or losing – referred to as an open position – or a trade that has recently been cancelled, referred to as a closed position. Profit or loss on a position can be realized only after the position is closed.


it is made of 2 limit orders, and the execution of one will automatically cancel the other one.

A trade that has been established and is subject to profit and loss.

An option is a financial instrument that gives you the right – but not the responsibility – to buy or sell an asset if its price rises over a given level over a certain time period.

An order is a request to conduct a trade a financial instrument submitted to a broker or trading platform.

The phrase “overexposure” is used in trading to express the mistake of taking on too much risk. It usually occurs when a trader makes the technical error of putting too much money into a single position or market.

it refers to the process of trading securities through a decentralized broker-dealer network which is against a centralized exchange. In this method financial contracts such as equities, debt instruments, and derivatives are traded, and some underlying assets such as commodities support their value.

a position that is kept open overnight for trading on the following day.


The second currency of any currency pair is called the quote currency. for example, the EUR is the quote currency in this currency pair: USD/EUR

In trading, the quote is the most recent price at which an asset was traded, or the current price at which it can be purchased or sold.

Quantitative easing is a type of economic monetary policy that aims to reduce interest rates and raise the money supply.


The relative strength index is abbreviated as RSI. It’s a crucial tool in technical analysis for assessing asset momentum and determining whether they’re overbought or oversold.

the process of recognizing and controlling threads to protect the earnings and funds in a financial market.

It refers to a level where selling volume prevents an asset from exceeding that price.

Increasing the price of an asset after a decline.


It is an order to sell or buy an asset at a specific price. It is usually used to control losses.

It refers to the gap between the ask price and the bid price of any asset in the market.

The price of an asset for immediate delivery, or the value of an asset at any given time, is referred to as spot in trading. It is not to be confused with an asset’s futures price, which is the price for delivery at a future date, or its expected price.

sharp downward or upward movement of an asset in the market in a short time.

it refers to the traders who take significant risks to make a big profit.

it is a currency that is often affected drastically by political or economic events or news.

The difference between the expected price and a higher price at which a trade is executed. This usually happens during times of high volatility.

This strategy involves selling an asset at a high price or at the beginning of a downtrend and buy that asset again at a lower price to make a profit.

Shares are the units of a company’s ownership that are usually traded on the stock exchange. Stocks or equities are other terms for them.


A trend is defined as a clear, long-term upward or downward movement in a market. Identifying the start and end of trends is an important part of market research. Individual assets, sectors, and even interest rates and bond yields can all be affected by trends.

A trailing stop is a type of stop-loss that tracks positive market movements in the asset you’re trading. A trailing stop can lock in your profits and close the position if your position moves in your favor at first but then moves against you.

A trading plan is a strategy devised by a single trader to define asset evaluation, risk management, trading types, and goal setting.

Evaluating the market situation to find trading opportunities, price trends, patterns on charts, and finally predicting future prices.

an order to close a position as it reaches a specific price level so that the trader can collect the profit.

A company’s tangible assets are those assets that can be seen and touched.


Stock that is unborrowable is stock that no one is willing to lend to short sellers. When a company’s shares become unborrowable, traditional short selling becomes impossible.


In trading, volume refers to the amount of a particular asset that is traded over a specified time period. It is frequently presented alongside price data, as it adds another dimension to the analysis of an asset’s price history.

It refers to the degree of price fluctuations over a specific period of time.


WTI is an acronym for West Texas Intermediate (occasionally referred to as Texas Light Sweet), an important oil benchmark in commodities trading. It is one of three major oil benchmarks used in trading, along with Brent crude and Dubai/Oman crude.

A working order is a term that refers to either a stop or a limit order to open. It is used to instruct your broker to execute a trade when a specific price is reached on an asset.


The returns for an investment over a specific period of time, usually expressed as a percentage.

Are you ready for trading?