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The forex glossary

Every term a new trader trips over, explained in plain language. Bookmark it — you’ll come back as the concepts in the curriculum start clicking into place.

A
Ask

The price at which you can buy a currency pair; the higher side of the quote.

Arbitrage

Profiting from a price difference for the same asset across markets.

Average True Range (ATR)

A volatility measure of how much a pair typically moves per period.

B
Bid

The price at which you can sell a currency pair; the lower side of the quote.

Base Currency

The first currency in a pair (e.g. EUR in EUR/USD).

Bullish / Bearish

Expecting price to rise (bullish) or fall (bearish).

Break of Structure (BOS)

Price breaking a prior swing high or low, signalling trend continuation.

C
Candlestick

A bar showing open, high, low and close for a period.

CFD

Contract for Difference — a derivative tracking an asset’s price without owning it.

Change of Character (CHoCH)

An early shift suggesting the trend may be reversing.

Correlation

How closely two pairs move together, positively or negatively.

D
Drawdown

The peak-to-trough fall in account equity.

Day Trading

Opening and closing trades within the same day.

Demand Zone

A price area where buying pressure has previously stepped in.

E
Equity

Account balance plus or minus the value of open positions.

Expectancy

The average amount you can expect to win or lose per trade over many trades.

Economic Calendar

A schedule of news releases that move the market.

F
Fundamental Analysis

Valuing currencies via economic data, rates and policy.

Fill

The execution of your order at a given price.

L
Leverage

Borrowed exposure that lets a small deposit control a larger position.

Liquidity

How easily an asset can be traded without moving its price.

Lot

A standardised trade size (standard 100k, mini 10k, micro 1k units).

Long

A buy position that profits when price rises.

M
Margin

The deposit required to open a leveraged position.

Margin Call

A demand to add funds when equity falls too low.

Market Order

An order to buy or sell immediately at the best available price.

O
Order Block

A zone of institutional orders that often acts as support or resistance.

Overtrading

Taking too many low-quality trades, usually emotionally driven.

P
Pip

The standard smallest price move, usually the 4th decimal place.

Pivot Point

A calculated level used to gauge intraday direction.

Position Sizing

Choosing lot size so each trade risks a fixed percentage of capital.

Q
Quote Currency

The second currency in a pair (e.g. USD in EUR/USD).

R
Risk/Reward (R:R)

The ratio of potential loss to potential gain on a trade.

Resistance

A level where price has struggled to rise above.

Range

A market moving sideways between support and resistance.

S
Spread

The difference between the bid and ask price.

Slippage

The gap between expected and actual fill price.

Stop-Loss

A preset order that closes a trade to cap a loss.

Support

A level where price has struggled to fall below.

Swap

The overnight interest paid or earned for holding a position.

Short

A sell position that profits when price falls.

T
Take-Profit

A preset order that closes a trade at a target.

Technical Analysis

Studying price action and charts to find trades.

Timeframe

The period each candle represents (e.g. M15, H1, D1).

V
Volatility

The speed and size of price movement.

Volume

The amount traded in a period.

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