Trader dictionary
Trader terms, forex included: orders, risk, leverage, analysis. Short, with examples, no filler.
42 terms
BreakoutPrice moving beyond a level. A breakout can be true or false, so many traders wait for confirmation and a retest.AnalysisBull and bear marketA bull market is one where prices broadly rise; a bear market is one where they broadly fall. The boundaries are…AnalysisCandlestickA chart element showing the open, high, low and close (OHLC) for a period. The body spans open to close; the wicks…AnalysisCurrency pairA quote of one currency in another. In EUR/USD the euro is the base and the dollar is the quote; the price shows how…ForexDollar-cost averaging (DCA)Buying the same amount at regular intervals. It softens the effect of a bad entry moment but does not protect against…RiskDrawdownThe decline of an account from a peak to the next low. It shows how much pain you had to sit through. After a 50%…RiskEMAExponential moving average: it averages price with more weight on recent values. It helps see direction but lags.AnalysisFair Value Gap (FVG)A gap between candles in a fast move: the wicks of the first and third candles do not overlap. In SMC the idea is…AnalysisFOMOFear of missing out. It pushes you to buy after a big rally with no plan. Written entry rules help against it.RiskFunding rateA periodic payment between longs and shorts in perpetual futures that keeps the futures price near spot. With…MarketHedgeA hedge is a protective position against an open trade. You do not close the main position. You open a second one…RiskLeverageTrading with more than your own funds through a loan. 10x leverage multiplies both profit and loss by 10. The higher…RiskLimit orderAn order at your price or better. You control the price but a fill is not guaranteed: the market may never reach it.OrdersLiquidationThe forced closing of a leveraged position when collateral cannot cover the loss. Work out the liquidation price…RiskLiquidityHow easily an asset can be bought or sold without moving the price. In SMC analysis the word also means zones where…MarketLiquidity sweepA quick poke through a high or low where stops cluster, followed by a return. In SMC it is a hypothesis that big…AnalysisLong and shortLong: a bet on the price rising, a purchase. Short: a bet on the price falling, selling a borrowed asset to buy it…MarketLotThe standard trade size in forex. One standard lot is 100,000 units of the base currency, a mini lot 10,000, a micro…ForexMarginCollateral locked for a leveraged position. If funds run short, the venue closes the position or sends a margin call.RiskMargin callA margin call is a notice from your broker: your account no longer has enough funds to hold the open positions. You…RiskMarket orderA buy or sell at the best available price immediately. It fills fast but the price may differ from what you expected…OrdersMarket structureThe sequence of price highs and lows: HH, HL, LH, LL. A structure shift (for example, breaking the last low) hints at…AnalysisOCO orderOCO (One Cancels the Other) is a pair of linked orders. When one fills, the other is cancelled automatically.OrdersOpen interest (OI)The total number of open derivative contracts that are not yet closed. Rising OI with price shows new positions…MarketOrder blockAn SMC idea: the last opposite candle before a strong impulse, viewed as a zone of possible interest from large…AnalysisOrder bookA list of limit buy and sell orders by price level. It shows where big orders sit.MarketPipThe standard minimum price step in forex. For most pairs it is the fourth decimal place (0.0001); for yen pairs it is…ForexPosition sizeThe trade size at which a stop-out costs a pre-chosen amount. Formula: money at risk / distance to the stop.RiskRetestPrice returning to a broken level to test it. If old resistance holds as support, it backs the continuation scenario.AnalysisRisk/Reward (R:R)The ratio of potential profit to risk. At 1:2 R:R the reward is twice the risk. The break-even win rate = 1 / (1 +…RiskRSIAn oscillator from 0 to 100 (by Welles Wilder). Readings above 70 are conventionally overbought and below 30…AnalysisSlippageThe difference between the expected and the actual fill price. It grows with low liquidity and during sharp moves.RiskSpreadThe gap between the best buy price (bid) and sell price (ask). It is a hidden cost of entry: the wider the spread…MarketStop-lossAn order to close the position at the price where your idea is invalidated. It limits the loss in advance. Place it…OrdersSupport and resistanceLevels where price previously stopped or turned. Support is below, resistance above. The more touches, the more…AnalysisSwap (rollover)A charge or credit for holding a position overnight. It depends on the interest-rate gap between the two currencies…ForexTake profitAn order to lock in profit at a target price. The target is usually set near the next notable level.OrdersTrading sessionsThe Asian, London and New York sessions. Activity and volatility rise at the London and New York opens, especially…ForexTrailing stopA trailing stop is a stop-loss that follows the price by itself at a set distance. Price moves your way, the stop…OrdersTrendA sustained direction of price. In an uptrend each peak and trough is higher than the last; in a downtrend the…AnalysisVolatilityHow much the price swings over a period. High volatility brings opportunity and adds risk.AnalysisVolumeThe amount of an asset traded in a period. Rising volume on a breakout adds confidence to the move but does not…Analysis
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See also
Where to trade
Crypto
WEEXForex
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VantageReferral link: ARUT may receive a reward. Trading with leverage carries a high risk of losing funds; this is not investment advice. CFDs are complex instruments: because of leverage there is a high risk of losing money quickly.