TRADING GLOSSARY — 76 TERMS, EACH LINKED TO ITS LESSON.

A broker model where your order is passed to a liquidity provider. The broker earns the spread or commission and does not profit from your loss.

The price you buy at. Always the higher of the two quoted prices; the difference from the bid is the spread.

Average True Range. The average size of a bar's full range over a lookback, used to size stops to current volatility rather than a fixed pip count.

A broker model where your order is held internally. The broker is the counterparty, so your loss is their revenue.

Running a strategy over historical data. Every backtest overstates live results; the question is by how much.

The tight consolidation a supply or demand zone is drawn from, before the departure.

The price you sell at. Always the lower of the two quoted prices.

Price closing beyond the prior swing point, confirming the trend has changed or continued.

Holding a position to earn the interest rate differential between two currencies, paid or charged as swap.

The Ichimoku lagging line: the current close plotted 26 bars back, used to check the move against old price.

An explicit per-lot fee charged on raw-spread accounts, in exchange for a tighter spread.

The degree to which two instruments move together. Correlated positions multiply risk without multiplying the position count.

The sharp move away from a base that proves part of a large order went unfilled. Without it there is no zone.

A candle whose body is several times the recent average, marking an imbalance and usually leaving a fair value gap.

Price and an oscillator disagreeing: price makes a higher high while momentum makes a lower high, or the mirror.

A candle whose open and close are effectively the same price. Indecision, and only meaningful at a level.

The fall from an equity peak to the following trough, measured in percent. The number that decides survival.

Electronic Communication Network. A venue that matches orders between participants, typically raw spread plus commission.

Exponential Moving Average. Weights recent bars more heavily, so it turns faster than a simple average.

A candle whose body completely covers the previous body in the opposite direction. Only tradeable at a level.

Account balance plus the floating profit or loss of open positions. What the margin level is calculated from.

The price of one currency in terms of another. EURUSD at 1.0850 means one euro buys 1.0850 dollars.

The average result per trade in R. The single number that says whether a strategy has an edge.

A three-candle imbalance where candle one's extreme and candle three's extreme do not overlap, leaving untraded price.

The 23.6, 38.2, 50, 61.8 and 78.6 percent levels of a measured leg, used to locate pullback entries.

Entering because a move is running without you, rather than because a setup appeared.

A difference between one bar's close and the next bar's open, most often over a weekend.

A set of orders placed at fixed intervals to harvest a range. Works until the range breaks.

A swing high above the previous swing high. With higher lows, it defines an uptrend.

A five-line system giving trend, momentum and projected support and resistance in one overlay.

A bar whose entire range sits inside the previous bar's range. Compression before a break.

A false push beyond a session range that reverses, trapping traders who took the break.

The Ichimoku base line: the midpoint of the 26-bar high and low.

A multiplier on position size relative to deposited capital. It changes margin required, not risk per trade.

An instruction to trade at a specified price or better. Fills at your price or not at all.

The depth of resting orders available at a price. Thin liquidity means wider spreads and more slippage.

A wick through a level that triggers resting stops, then reverses without closing beyond it.

The standard unit of position size. One standard lot is 100,000 units of the base currency.

Moving Average Convergence Divergence. The gap between two EMAs, its signal line, and the histogram between them.

The deposit held against an open position. Refundable when the position closes; not a cost.

A broker warning that your margin level has fallen toward the forced-closure threshold.

An instruction to trade immediately at the best available price. Fills guaranteed, price is not.

A distribution of traded volume by price, showing where the market agreed on value.

Price returning to an imbalance or order block and filling what was left behind.

A regulatory guarantee that you cannot lose more than your deposit.

Non-Farm Payrolls. The US monthly employment release, and the highest-volatility scheduled event in FX.

The last opposing candle before an impulsive move, used as the zone price returns to.

Optimal Trade Entry. The 0.62 to 0.79 retracement band of an impulse leg.

A candle with a small body and a long wick, showing rejection. Only meaningful at a level.

The smallest standardised price move in a pair. 0.0001 on most pairs, 0.01 on JPY pairs.

What one pip is worth in account currency for a given position size. It is what converts a stop in pips into money at risk.

A tenth of a pip — the fifth decimal on most pairs, the third on JPY pairs. Brokers quote it to show sub-pip precision.

On indices and some CFDs, the smallest quoted move. One point on US30 is 1.0 index point, not a pip.

Total open risk across all positions once correlation is counted. Not the sum of the individual risks.

Converting a risk percentage and a stop distance into a lot size. The calculation that keeps risk constant.

Potential Reversal Zone. Where the Fibonacci ratios of a harmonic pattern converge.

A trade's result expressed in units of its own initial risk. The only unit that compares trades fairly.

Relative Strength Index. A 0-100 oscillator measuring the speed of price. Overbought is a reading, not a signal.

Client money held in accounts separate from the broker's own, so it survives the broker's insolvency.

The difference between the price you requested and the price you received.

Simple Moving Average. Every bar in the lookback weighted equally, so it lags more than an EMA.

The difference between bid and ask. The cost you pay on every round turn before anything else.

In Wyckoff, a dip below the trading range that fails and reverses, shaking out weak holders.

100,000 units of the base currency. A mini lot is 10,000 and a micro lot is 1,000.

A resting order that closes a position at a defined loss. Placed by structure, never by pip count.

Forced closure of positions by the broker when margin level falls below the threshold.

A base followed by a sharp drop away. Sits above price; the return to it is a selling area.

The overnight financing charge or credit on a position held past the daily rollover.

A bar whose high is above the bars either side of it. The reference point for structure.

The Ichimoku conversion line: the midpoint of the 9-bar high and low.

Trading from emotional dysregulation rather than from the plan. Requires a circuit breaker, not willpower.

A written decision tree covering watchlist, entry, exit, risk and review, with a number against every rule.

A holding period. Scalping, day, swing or position trading, decided by your hours, costs and account size.

The quantity traded in a bar. In spot FX it is tick volume, a proxy rather than true size.

Testing on data the strategy was not optimised on, to see whether the edge survives out of sample.

A framework describing how large participants accumulate and distribute, in four repeating phases.