71 terms
Glossary
Every term the course uses, in one sentence. The same terms are in your drill deck on the practice page.
- A-Book
- A brokerage model where client orders are passed to external liquidity providers. No conflict of interest.
- Asian session
- The Tokyo/Sydney trading session (11pm-8am GMT), generally lower volatility for forex.
- B-Book
- A brokerage model where the broker takes the opposite side of client trades internally. Profits when clients lose.
- breakout
- When price moves decisively beyond a support or resistance level, often signaling the start of a new trend.
- candlestick
- A chart element showing open, high, low, and close prices for a time period. Green/white = bullish, red/black = bearish.
- commission
- A fixed fee per trade charged by the broker, separate from the spread. Common on ECN/STP accounts.
- consolidation
- A period where price moves sideways within a range, indicating balance between buyers and sellers.
- day trading
- Opening and closing all positions within the same trading day, avoiding overnight risk.
- demand zone
- A price area where buyers previously overwhelmed sellers, causing a sharp rally. Price may bounce here again.
- demo account
- A practice account using virtual money to learn trading without financial risk.
- divergence
- When price makes a new high/low but an indicator does not, suggesting weakening momentum and potential reversal.
- doji
- A candlestick with nearly equal open and close prices, signaling indecision between buyers and sellers.
- drawdown
- The peak-to-trough decline in account balance. Maximum drawdown measures the worst historical loss from a peak.
- ECN
- Electronic Communication Network — a broker model that connects traders directly to liquidity providers for raw spreads.
- engulfing
- A two-candle reversal pattern where the second candle completely engulfs the body of the first.
- expectancy
- The average amount you expect to win (or lose) per trade over time. Positive expectancy = profitable system.
- fibonacci
- Retracement levels (23.6%, 38.2%, 50%, 61.8%, 78.6%) used to identify potential support/resistance during pullbacks.
- FOMO
- Fear Of Missing Out — the emotional urge to enter a trade because you see price moving without you.
- hammer
- A single-candle reversal pattern with a small body at the top and a long lower wick, found at support levels.
- higher high
- A swing peak that is higher than the previous swing peak, confirming an uptrend.
- higher low
- A swing trough that is higher than the previous swing trough, confirming an uptrend.
- indicator
- A mathematical calculation applied to price/volume data to help identify trends, momentum, or volatility.
- leverage
- Borrowed capital from your broker that amplifies both gains and losses. 1:100 leverage means $1 controls $100.
- limit order
- An order to buy below or sell above the current price. Only fills at your specified price or better.
- liquidity
- How easily an asset can be bought or sold without significantly affecting its price. High liquidity = tight spreads and fast fills.
- London session
- The European trading session (8am-5pm GMT), known for high liquidity and significant price movements.
- lot
- A standardized unit of trade size. Standard lot = 100,000 units. Mini = 10,000. Micro = 1,000. Cent/nano = 100.
- lower high
- A swing peak that is lower than the previous swing peak, confirming a downtrend.
- lower low
- A swing trough that is lower than the previous swing trough, confirming a downtrend.
- MACD
- Moving Average Convergence Divergence — a trend-following momentum indicator showing the relationship between two moving averages.
- margin
- The deposit required to open a leveraged position. If leverage is 1:100, margin = 1% of position size.
- market maker
- A broker that creates its own market by quoting both bid and ask prices, often acting as the counterparty.
- market order
- An order executed immediately at the current best available price. Fast but may incur slippage.
- marubozu
- A candlestick with a full body and no wicks, showing complete dominance by one side (buyers or sellers).
- moving average
- An indicator that smooths price data by averaging prices over a specific number of periods (e.g., 20, 50, 200).
- New York session
- The American trading session (1pm-10pm GMT), overlapping with London for the highest volume period.
- news event
- Scheduled economic data releases (NFP, CPI, interest rates) that cause sudden, sharp price movements.
- overtrading
- Taking too many trades, often from boredom or FOMO, degrading your edge and increasing costs.
- pending order
- An order that will only execute when price reaches a specific level you set in advance.
- pip
- The smallest standard price movement in forex. For most pairs, 1 pip = 0.0001. For JPY pairs, 1 pip = 0.01.
- position sizing
- Calculating trade size based on account balance and risk per trade to ensure consistent risk management.
- position trading
- Holding positions for weeks to months, following major trends and fundamental shifts.
- price action
- The study of raw price movement on charts without relying on lagging indicators. Focuses on candles, patterns, and structure.
- ProCent
- A RoboForex account type where 1 lot equals 1 cent lot, allowing real trading with micro-scale risk ($10 minimum).
- pullback
- A temporary reversal against the prevailing trend. In an uptrend, a pullback is a brief dip before continuation.
- resistance
- A price level where selling pressure historically prevents further rise. Price tends to bounce down from resistance.
- revenge trading
- Impulsive trading to recover losses, driven by emotion rather than strategy. Almost always leads to bigger losses.
- reversal
- A change in the overall direction of a trend. A bullish reversal turns a downtrend into an uptrend.
- risk management
- The practice of controlling potential losses through stop-losses, position sizing, and portfolio diversification.
- risk per trade
- The percentage of account balance risked on a single trade. Professional standard: 1-2% maximum.
- risk-reward ratio
- The ratio of potential loss to potential profit on a trade. A 1:3 R:R means risking $1 to potentially gain $3.
- RSI
- Relative Strength Index — a momentum oscillator (0-100) that identifies overbought (>70) and oversold (<30) conditions.
- scalping
- A trading style targeting very small price movements, holding positions for seconds to minutes.
- shooting star
- A single-candle reversal pattern with a small body at the bottom and a long upper wick, found at resistance levels.
- slippage
- The difference between your expected entry/exit price and the actual price filled. Common during high volatility.
- spread
- The difference between the bid (sell) price and ask (buy) price. This is the primary cost of entering a trade.
- stop-loss
- An order placed to automatically close a position at a predetermined loss level, limiting downside risk.
- STP
- Straight Through Processing — orders pass directly to liquidity providers without dealer desk intervention.
- supply zone
- A price area where sellers previously overwhelmed buyers, causing a sharp drop. Price may reverse here again.
- support
- A price level where buying pressure historically prevents further decline. Price tends to bounce up from support.
- swap
- The overnight interest rate charged or earned for holding a position past the daily rollover time (usually 5pm EST).
- swing trading
- Holding positions for days to weeks, capturing larger price moves within a trend.
- take-profit
- An order placed to automatically close a position at a predetermined profit level, locking in gains.
- timeframe
- The time period each candlestick represents. Common: M1, M5, M15, H1, H4, Daily, Weekly, Monthly.
- trading journal
- A log of every trade recording entry, exit, reasoning, emotions, and outcome. Essential for improvement.
- trading plan
- A written document defining your strategy, rules, risk limits, and goals. Your rulebook for every trade.
- trailing stop
- A dynamic stop-loss that follows price by a set distance, locking in profit as the trade moves favorably.
- trend
- The overall direction of price movement. Uptrend = higher highs and higher lows. Downtrend = lower highs and lower lows.
- volatility
- The degree of price variation over time. High volatility = large price swings. Low volatility = small price swings.
- volume
- The number of shares, contracts, or lots traded during a given period. High volume confirms the strength of a move.
- win rate
- The percentage of trades that end in profit. A 40% win rate can be profitable with good risk-reward ratios.