Ask Price
The price at which a trader can buy an instrument. It is typically higher than the bid price.
A
Terms beginning with A
Asset
A financial instrument or market that can be traded, such as a currency pair, index, commodity, stock or cryptocurrency.
At-the-Market Order
An order to buy or sell an instrument immediately at the best available market price.
Account Equity
The current value of a trading account, including unrealised profits and losses.
B
Terms beginning with B
Base Currency
The first currency in a forex pair. In EUR/USD, EUR is the base currency.
Bear Market
A market environment generally associated with falling prices and negative investor sentiment.
Bid Price
The price at which a trader can sell an instrument.
Breakout
A market movement through a recognised support or resistance level.
C
Terms beginning with C
CFD
A Contract for Difference is a derivative that allows traders to speculate on price movements without owning the underlying asset.
Commission
A fee that may be charged for executing a trade, depending on the account type and instrument.
Currency Pair
Two currencies quoted against each other, such as EUR/USD or GBP/USD.
Cross Currency Pair
A currency pair that does not include the US dollar, such as EUR/GBP.
D
Terms beginning with D
Drawdown
The decline in the value of a trading account from a peak to a subsequent low.
Day Trading
A trading style involving opening and closing positions within the same trading day.
Derivative
A financial instrument whose value is derived from an underlying asset or market.
E
Terms beginning with E
Equity
The value of a trading account after adding or subtracting unrealised profit and loss from the account balance.
Execution
The process of completing a buy or sell order in the market.
Exotic Currency Pair
A currency pair consisting of a major currency and the currency of an emerging or smaller economy.
F
Terms beginning with F
Forex
Short for foreign exchange, Forex is the global market for buying and selling currencies.
Fundamental Analysis
The analysis of economic, financial and geopolitical factors that may influence market prices.
Free Margin
The amount of funds available in a trading account to open new positions or absorb potential losses.
G
Terms beginning with G
Gap
A price area where an instrument opens significantly above or below its previous closing price.
Going Long
Opening a buy position with the expectation that the market price may rise.
Going Short
Opening a sell position with the expectation that the market price may fall.
H
Terms beginning with H
Hedging
A strategy used to help manage potential exposure to adverse market movements.
High-Frequency Trading
The use of automated systems and algorithms to execute a large number of trades at very high speed.
I
Terms beginning with I
Index
A measure designed to track the performance of a group of assets or a particular market.
Initial Margin
The amount required to open a leveraged trading position.
Interest Rate
The cost of borrowing money or the return earned on deposited funds. Interest rates can influence currency markets.
J
Terms beginning with J
Japanese Candlestick
A chart type used to display an instrument's open, high, low and closing prices over a specific period.
Jobless Claims
An economic indicator that measures applications for unemployment benefits and may influence market expectations.
K
Terms beginning with K
Key Interest Rate
A central bank interest rate that can influence borrowing costs and currency valuations.
Kiwi
A common market nickname for the New Zealand dollar, NZD.
L
Terms beginning with L
Leverage
A mechanism that allows traders to gain exposure to a larger position using a smaller amount of capital. Leverage can magnify both profits and losses.
Limit Order
An order to buy or sell at a specified price or a potentially better price.
Liquidity
The ability to buy or sell an instrument without causing a significant change in its price.
M
Terms beginning with M
Margin
The amount of funds required to maintain a leveraged trading position.
Margin Call
A notification that an account may no longer have sufficient funds to support open positions.
Market Order
An order to buy or sell an instrument at the best available price.
Major Currency Pair
A major forex pair generally involving the US dollar and another highly traded currency.
N
Terms beginning with N
Non-Farm Payrolls
A major US economic indicator measuring employment changes outside the farming sector.
Notional Value
The total value of a position based on the underlying exposure represented by the trade.
O
Terms beginning with O
Open Position
A trade that has been entered but has not yet been closed.
Overnight Financing
A financing adjustment that may apply when a leveraged position is held overnight.
P
Terms beginning with P
Pip
A commonly used unit for measuring changes in the value of a currency pair.
Point
A unit used to describe a price movement in a financial instrument.
Position Size
The amount of an instrument represented by a trade.
Profit and Loss
The financial result of a completed or open trade, including realised and unrealised amounts.
Q
Terms beginning with Q
Quote Currency
The second currency in a currency pair. In EUR/USD, USD is the quote currency.
Quote
The current price at which an instrument may be bought or sold.
R
Terms beginning with R
Resistance
A price level where selling pressure may limit further upward movement.
Risk Management
The process of identifying, assessing and managing potential trading risks.
Rollover
The process of carrying an open position from one trading day into the next.
S
Terms beginning with S
Spread
The difference between the bid price and the ask price of an instrument.
Stop Loss
An order designed to help limit potential losses by closing a position at a specified level.
Support
A price level where buying interest may help limit further downward movement.
Swap
A financing adjustment that may be applied when a leveraged position is held overnight.
T
Terms beginning with T
Take Profit
An order designed to close a position when a specified profit target is reached.
Technical Analysis
The analysis of price movements, charts and market data to identify potential trading opportunities.
Trend
The general direction in which a market or instrument is moving.
U
Terms beginning with U
Underlying Asset
The financial instrument or market on which a derivative is based.
Unrealised Profit or Loss
The potential profit or loss of an open position based on current market prices.
V
Terms beginning with V
Volatility
A measure of how significantly and quickly the price of an instrument changes.
Volume
The amount of trading activity or number of units traded over a given period.
W
Terms beginning with W
Whipsaw
A rapid market movement in one direction followed by a sharp reversal.
Working Order
An order that has been placed but has not yet been executed.
X
Terms beginning with X
Xenocurrency
A currency traded outside the country or monetary jurisdiction where it is officially issued.
Y
Terms beginning with Y
Yield
The return generated by an investment or financial instrument, often expressed as a percentage.
Yen
The official currency of Japan, represented by the currency code JPY.
Z
Terms beginning with Z
Zero-Sum Game
A situation in which one participant's gain is theoretically balanced by another participant's loss.
Zig Zag Indicator
A technical analysis tool used to highlight significant price movements and market trends.