A
Account Deficit
A situation where a country's imports exceed its exports, resulting in a negative trade balance.
A situation where a country's imports exceed its exports, resulting in a negative trade balance.
Accrual
The accumulation of interest or other financial charges over time, typically calculated daily.
The accumulation of interest or other financial charges over time, typically calculated daily.
Adjustment (Dividend)
A modification to the price of a financial instrument to account for dividend payments.
A modification to the price of a financial instrument to account for dividend payments.
Aggressive
A trading style characterized by taking higher risks for potentially higher returns.
A trading style characterized by taking higher risks for potentially higher returns.
Algorithmic Trading
The use of computer programs and algorithms to execute trades automatically based on predefined criteria.
The use of computer programs and algorithms to execute trades automatically based on predefined criteria.
Annual General Meeting (AGM)
A yearly meeting of a company's shareholders to discuss financial performance and corporate governance.
A yearly meeting of a company's shareholders to discuss financial performance and corporate governance.
Ask
The price at which a market maker is willing to sell a currency pair. Also known as the offer price.
The price at which a market maker is willing to sell a currency pair. Also known as the offer price.
Arbitrage
The practice of taking advantage of price differences between markets to make a profit.
The practice of taking advantage of price differences between markets to make a profit.
Appreciation
An increase in the value of a currency relative to another currency.
An increase in the value of a currency relative to another currency.
Account Balance
The total amount of money in a trading account, including profits and losses.
The total amount of money in a trading account, including profits and losses.
Average True Range (ATR)
A technical indicator that measures market volatility by calculating the average of true ranges over a specified period.
A technical indicator that measures market volatility by calculating the average of true ranges over a specified period.
B
Bid
The price at which a market maker is willing to buy a currency pair.
The price at which a market maker is willing to buy a currency pair.
Base Currency
The first currency in a currency pair. For example, in EUR/USD, the Euro is the base currency.
The first currency in a currency pair. For example, in EUR/USD, the Euro is the base currency.
Bear Market
A market condition characterized by falling prices and pessimistic sentiment.
A market condition characterized by falling prices and pessimistic sentiment.
Bull Market
A market condition characterized by rising prices and optimistic sentiment.
A market condition characterized by rising prices and optimistic sentiment.
Broker
A financial institution that facilitates trading between buyers and sellers in the forex market.
A financial institution that facilitates trading between buyers and sellers in the forex market.
C
Currency Pair
Two currencies that are traded against each other in the forex market, such as EUR/USD.
Two currencies that are traded against each other in the forex market, such as EUR/USD.
Cross Currency
A currency pair that does not include the US dollar, such as EUR/GBP or GBP/JPY.
A currency pair that does not include the US dollar, such as EUR/GBP or GBP/JPY.
Central Bank
A national bank that controls a country's monetary policy and currency supply.
A national bank that controls a country's monetary policy and currency supply.
Commission
A fee charged by a broker for executing trades on behalf of clients.
A fee charged by a broker for executing trades on behalf of clients.
Correlation
The statistical relationship between two currency pairs, indicating how they move relative to each other.
The statistical relationship between two currency pairs, indicating how they move relative to each other.
D
Day Trading
A trading strategy that involves opening and closing positions within the same trading day.
A trading strategy that involves opening and closing positions within the same trading day.
Depreciation
A decrease in the value of a currency relative to another currency.
A decrease in the value of a currency relative to another currency.
Drawdown
The peak-to-trough decline in account value from a previous high.
The peak-to-trough decline in account value from a previous high.
Dollar Index
A measure of the value of the US dollar relative to a basket of major currencies.
A measure of the value of the US dollar relative to a basket of major currencies.
Dealer
A financial institution that buys and sells currencies for its own account.
A financial institution that buys and sells currencies for its own account.
E
Exchange Rate
The rate at which one currency can be exchanged for another currency.
The rate at which one currency can be exchanged for another currency.
Economic Calendar
A schedule of important economic events and indicators that can affect currency prices.
A schedule of important economic events and indicators that can affect currency prices.
Equity
The current value of a trading account, calculated as account balance plus unrealized profits/losses.
The current value of a trading account, calculated as account balance plus unrealized profits/losses.
Exotic Currency
A currency from a developing or emerging market economy.
A currency from a developing or emerging market economy.
Execution
The process of completing a trade order in the forex market.
The process of completing a trade order in the forex market.
F
Forex
The foreign exchange market where currencies are traded.
The foreign exchange market where currencies are traded.
FOMC
Federal Open Market Committee - the Fed committee that votes on US monetary policy.
Federal Open Market Committee - the Fed committee that votes on US monetary policy.
Fundamental Analysis
Analysis of economic, social, and political factors that affect currency values.
Analysis of economic, social, and political factors that affect currency values.
Futures
Financial contracts obligating the buyer to purchase an asset at a predetermined future date and price.
Financial contracts obligating the buyer to purchase an asset at a predetermined future date and price.
Fibonacci Retracement
A technical analysis tool that uses horizontal lines to indicate areas of support or resistance.
A technical analysis tool that uses horizontal lines to indicate areas of support or resistance.
G
GDP
Gross Domestic Product - the total value of goods and services produced by a country.
Gross Domestic Product - the total value of goods and services produced by a country.
Gap
A price jump between the closing price of one period and the opening price of the next period.
A price jump between the closing price of one period and the opening price of the next period.
Going Long
Buying a currency pair with the expectation that its value will increase.
Buying a currency pair with the expectation that its value will increase.
Going Short
Selling a currency pair with the expectation that its value will decrease.
Selling a currency pair with the expectation that its value will decrease.
Gross Spread
The difference between the bid and ask prices quoted by a market maker.
The difference between the bid and ask prices quoted by a market maker.
H
Hedging
A risk management strategy that involves taking offsetting positions to reduce exposure.
A risk management strategy that involves taking offsetting positions to reduce exposure.
High-Frequency Trading
A type of algorithmic trading that uses powerful computers to execute a large number of orders at very fast speeds.
A type of algorithmic trading that uses powerful computers to execute a large number of orders at very fast speeds.
Hedging
A strategy used to reduce risk by taking offsetting positions in related instruments.
A strategy used to reduce risk by taking offsetting positions in related instruments.
Hawkish
A monetary policy stance that favors higher interest rates to control inflation.
A monetary policy stance that favors higher interest rates to control inflation.
Hedging
A risk management technique that involves taking an offsetting position to reduce potential losses.
A risk management technique that involves taking an offsetting position to reduce potential losses.
I
Inflation
The rate at which the general level of prices for goods and services is rising.
The rate at which the general level of prices for goods and services is rising.
Interest Rate
The percentage charged by a central bank for lending money to commercial banks.
The percentage charged by a central bank for lending money to commercial banks.
Interbank Market
The market where banks trade currencies with each other.
The market where banks trade currencies with each other.
Initial Margin
The minimum amount of money required to open a trading position.
The minimum amount of money required to open a trading position.
Institutional Investor
Large organizations such as banks, insurance companies, and pension funds that trade in large volumes.
Large organizations such as banks, insurance companies, and pension funds that trade in large volumes.
J
Japanese Candlestick
A type of price chart that displays the high, low, open, and close prices for a security.
A type of price chart that displays the high, low, open, and close prices for a security.
Jobless Claims
A weekly report showing the number of people who filed for unemployment benefits.
A weekly report showing the number of people who filed for unemployment benefits.
Joint Account
A trading account owned by two or more people with equal rights and responsibilities.
A trading account owned by two or more people with equal rights and responsibilities.
K
Kiwi
Slang term for the New Zealand dollar (NZD).
Slang term for the New Zealand dollar (NZD).
Key Level
A significant price level that traders watch for potential support or resistance.
A significant price level that traders watch for potential support or resistance.
L
Leverage
The use of borrowed capital to increase the potential return of an investment.
The use of borrowed capital to increase the potential return of an investment.
Liquidity
The ease with which an asset can be bought or sold without affecting its price.
The ease with which an asset can be bought or sold without affecting its price.
Long Position
A position that profits from an increase in the price of the underlying asset.
A position that profits from an increase in the price of the underlying asset.
Lot
A standardized unit of currency trading. A standard lot is 100,000 units of the base currency.
A standardized unit of currency trading. A standard lot is 100,000 units of the base currency.
Limit Order
An order to buy or sell at a specific price or better.
An order to buy or sell at a specific price or better.
M
Margin
The amount of money required to open and maintain a leveraged position.
The amount of money required to open and maintain a leveraged position.
Major Currency
The most heavily traded currencies in the forex market: USD, EUR, JPY, GBP, CHF, CAD, AUD, NZD.
The most heavily traded currencies in the forex market: USD, EUR, JPY, GBP, CHF, CAD, AUD, NZD.
Market Maker
A financial institution that provides liquidity by quoting both bid and ask prices.
A financial institution that provides liquidity by quoting both bid and ask prices.
Micro Lot
A trading position size of 1,000 units of the base currency.
A trading position size of 1,000 units of the base currency.
Mini Lot
A trading position size of 10,000 units of the base currency.
A trading position size of 10,000 units of the base currency.
N
Non-Farm Payrolls
A monthly report showing the number of jobs added or lost in the US economy, excluding farm workers.
A monthly report showing the number of jobs added or lost in the US economy, excluding farm workers.
Net Position
The difference between long and short positions in a particular currency.
The difference between long and short positions in a particular currency.
Narrow Market
A market with low liquidity and wide bid-ask spreads.
A market with low liquidity and wide bid-ask spreads.
O
Open Position
A trade that has been entered but not yet closed.
A trade that has been entered but not yet closed.
Order
An instruction to buy or sell a currency pair at a specific price.
An instruction to buy or sell a currency pair at a specific price.
Over-the-Counter (OTC)
A decentralized market where trading is conducted directly between parties without a central exchange.
A decentralized market where trading is conducted directly between parties without a central exchange.
Overnight Position
A trading position that is held open overnight, subject to rollover charges.
A trading position that is held open overnight, subject to rollover charges.
P
Pip
The smallest price move that a given exchange rate can make. For most pairs, a pip is 0.0001.
The smallest price move that a given exchange rate can make. For most pairs, a pip is 0.0001.
Position
The net exposure in a particular currency pair.
The net exposure in a particular currency pair.
Profit and Loss (P&L)
The difference between the cost of a trade and its current value.
The difference between the cost of a trade and its current value.
Point
The smallest unit of price movement in forex trading.
The smallest unit of price movement in forex trading.
Position Size
The amount of currency being traded in a particular position.
The amount of currency being traded in a particular position.
Q
Quote
The current market price for a currency pair, consisting of a bid and ask price.
The current market price for a currency pair, consisting of a bid and ask price.
Quantitative Easing
A monetary policy where a central bank purchases government securities to increase money supply.
A monetary policy where a central bank purchases government securities to increase money supply.
R
Resistance
A price level where selling pressure is expected to be strong enough to prevent further price increases.
A price level where selling pressure is expected to be strong enough to prevent further price increases.
Risk Management
The process of identifying, analyzing, and taking steps to reduce or eliminate exposures to loss.
The process of identifying, analyzing, and taking steps to reduce or eliminate exposures to loss.
Rollover
The process of extending the settlement date of an open position, which may involve paying or receiving interest.
The process of extending the settlement date of an open position, which may involve paying or receiving interest.
Rate
The price of one currency in terms of another currency.
The price of one currency in terms of another currency.
S
Spread
The difference between the bid and ask prices of a currency pair.
The difference between the bid and ask prices of a currency pair.
Support
A price level where buying pressure is expected to be strong enough to prevent further price decreases.
A price level where buying pressure is expected to be strong enough to prevent further price decreases.
Scalping
A trading strategy that involves making many small profits on minor price changes.
A trading strategy that involves making many small profits on minor price changes.
Short Position
A position that profits from a decrease in the price of the underlying asset.
A position that profits from a decrease in the price of the underlying asset.
Stop Loss
An order placed to limit losses by automatically closing a position at a predetermined price.
An order placed to limit losses by automatically closing a position at a predetermined price.
T
Technical Analysis
Analysis of price movements and patterns to predict future price movements.
Analysis of price movements and patterns to predict future price movements.
Take Profit
An order placed to automatically close a position at a predetermined profit level.
An order placed to automatically close a position at a predetermined profit level.
Trend
The general direction of price movement in a market.
The general direction of price movement in a market.
Trading Session
The time period during which financial markets are open for trading.
The time period during which financial markets are open for trading.
Transaction Cost
The total cost of executing a trade, including spreads, commissions, and fees.
The total cost of executing a trade, including spreads, commissions, and fees.
U
Unemployment Rate
The percentage of the labor force that is unemployed and actively seeking employment.
The percentage of the labor force that is unemployed and actively seeking employment.
Uptick
A price movement upward in a security or market.
A price movement upward in a security or market.
Underlying Asset
The financial instrument on which a derivative contract is based.
The financial instrument on which a derivative contract is based.
V
Volatility
The degree of variation in trading prices over time.
The degree of variation in trading prices over time.
Volume
The number of shares or contracts traded in a security or market during a given period.
The number of shares or contracts traded in a security or market during a given period.
Value Date
The date on which the exchange of currencies takes place in a forex transaction.
The date on which the exchange of currencies takes place in a forex transaction.
W
Whipsaw
A market condition where prices move in one direction and then quickly reverse.
A market condition where prices move in one direction and then quickly reverse.
Wire Transfer
An electronic transfer of funds from one bank account to another.
An electronic transfer of funds from one bank account to another.
X
XAU
The symbol for gold in forex trading.
The symbol for gold in forex trading.
XAG
The symbol for silver in forex trading.
The symbol for silver in forex trading.
Y
Yield
The return on an investment, expressed as a percentage.
The return on an investment, expressed as a percentage.
Yen
The currency of Japan, represented by the symbol JPY.
The currency of Japan, represented by the symbol JPY.
Z
Zero-Sum Game
A situation where one participant's gain is exactly balanced by another participant's loss.
A situation where one participant's gain is exactly balanced by another participant's loss.
Zloty
The currency of Poland, represented by the symbol PLN.
The currency of Poland, represented by the symbol PLN.