Your comprehensive guide to forex trading terminology. Master the language of trading with clear, concise definitions of essential terms and concepts.
The price at which a trader can buy a currency pair. Also known as the offer price.
The first currency in a currency pair. For example, in EUR/USD, EUR is the base currency.
A market characterized by falling prices and negative investor sentiment.
The price at which a trader can sell a currency pair.
A market characterized by rising prices and positive investor sentiment.
A type of price chart that displays the high, low, open, and closing prices for a specific period.
The quotation of two different currencies, with the value of one currency being quoted against the other.
A trading strategy where positions are opened and closed within the same trading day.
The peak-to-trough decline during a specific period for an investment or trading account.
A computerized system that matches buy and sell orders for securities in the market.
The value of a trading account, calculated as balance plus or minus open position profit/loss.
Technical analysis tool using horizontal lines to indicate areas of support or resistance.
Foreign exchange market where currencies are traded. The largest and most liquid financial market globally.
Method of evaluating currencies by analyzing economic, social, and political forces.
A break in price levels on a chart where no trading occurs, often seen at market open after significant news.
Buying a currency pair with the expectation that it will increase in value.
Selling a currency pair with the expectation that it will decrease in value.
A risk management strategy used to offset potential losses in one position by taking an opposite position.
A mathematical calculation based on price and/or volume used to identify trading opportunities.
Trading positions that are opened and closed within the same trading day.
A charting technique that shows price movements with candlestick patterns indicating open, high, low, and close.
A slang term for a market maker or trader who holds positions for very short periods.
Market slang for the New Zealand Dollar (NZD), often referring to the NZD/USD currency pair.
An option that begins to function only when the underlying asset reaches a specified price level.
The use of borrowed capital to increase the potential return of an investment.
The ability to buy or sell an asset quickly without causing a significant price change.
Buying a currency pair with the expectation that its value will increase.
A standardized quantity of a financial instrument. Standard lot is 100,000 units of base currency.
A trend-following momentum indicator that shows the relationship between two moving averages.
The amount of money required in your account to open and maintain a leveraged position.
A broker's demand for an investor to deposit additional money to cover potential losses.
An order to buy or sell a currency pair immediately at the best available current price.
A technical indicator that smooths price data by creating a constantly updated average price.
A key economic indicator showing the number of jobs added in the US economy, excluding farm workers.
A type of broker execution where orders are sent directly to liquidity providers without dealer intervention.
An instruction to execute a trade at a specified price.
An order to buy or sell a currency pair at a specified price in the future.
The smallest price move that a currency pair can make. Usually the fourth decimal place (0.0001).
An open trade that is currently active and has not been closed.
The second currency in a currency pair. In EUR/USD, USD is the quote currency.
A price level where selling pressure is expected to overcome buying pressure.
The process of identifying, analyzing, and mitigating uncertainty in investment decisions.
A momentum oscillator that measures the speed and change of price movements.
A trading strategy that attempts to profit from small price changes by making numerous trades.
Selling a currency pair with the expectation that its value will decrease.
The difference between the expected price of a trade and the price at which it is executed.
The difference between the bid price and the ask price of a currency pair.
An order placed to close a position automatically when the price reaches a specified unfavorable level.
A price level where buying pressure is expected to overcome selling pressure.
An interest fee paid or earned for holding a position overnight.
An order placed to close a position automatically when the price reaches a specified favorable level.
Method of evaluating currencies by analyzing statistical trends from trading activity.
The general direction in which the price of a currency pair is moving.
A statistical measure of the dispersion of returns for a given currency pair.
The profit or loss on open positions that have not yet been closed.
A market condition where prices are generally moving higher over time, characterized by higher highs and higher lows.
A condition where a currency pair moves in one direction and then quickly reverses, causing losses for traders.
A chart pattern where price action is confined between two converging trend lines, indicating potential breakout.
The trading symbol for Gold priced in US Dollars, commonly traded in forex markets.
Slang term for one billion units of currency, commonly used by institutional forex traders.
The return on an investment, typically expressed as a percentage. In forex, refers to interest rate differentials.
A situation where one participant's gain is exactly balanced by another's loss, as in currency trading.
A price range or area on a chart where support or resistance is expected based on historical price action.
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