A

• Ask Price – The price at which a currency pair or asset is offered for sale.
• Arbitrage – The practice of taking advantage of price differences in different markets.
• Asset – Any financial instrument that has value, such as currencies, commodities, or stocks.
• Appreciation – An increase in the value of a currency relative to another.
• Asian Session – The trading hours in the forex market that coincide with business hours in Tokyo, Japan.

B

• Base Currency – The first currency in a currency pair (e.g., EUR in EUR/USD).
• Bid Price – The price at which a trader can sell a currency pair.
• Bear Market – A market characterized by declining prices.
• Bull Market – A market characterized by rising prices.
• Breakout – When the price moves beyond a defined support or resistance level.
• Broker – An intermediary who facilitates forex trading.

C

• Carry Trade – A strategy that involves borrowing a currency with a low-interest rate to buy a currency with a higher interest rate.
• Central Bank – The institution responsible for managing a nation’s currency and monetary policy (e.g., Federal Reserve, ECB).
• Chart Patterns – Visual formations on price charts used to predict market movements.
• Commission – The fee charged by a broker for executing a trade.
• Consolidation – This is where price moves to the right and stays within a small range, almost coiling before the next move.
• Continuation Structure – A specific structure that is repeated in the market which allows the market to continue in the trend.
• Correlation – A statistical relationship between two currency pairs.
• Counter Trend Trade – A trade against the higher timeframe move.

D

• Day Trading – Buying and selling currencies within the same trading day.
• Devaluation – A deliberate downward adjustment of a currency’s value by its government.
• Drawdown – The reduction of a trader’s account equity after losses.
• Derivative – A financial contract deriving its value from an underlying asset.
• Divergence – A situation where price and an indicator (e.g., RSI) move in opposite directions.

E

• Economic Indicator – A statistic used to gauge economic activity, such as GDP or inflation.
• Equity – The total value of a trader’s account, including unrealized profits or losses.
• Exchange Rate – The price of one currency in terms of another.
• Execution – The process of completing a forex order.
• Exotic Pairs – Currency pairs that include one major currency and one from an emerging economy.

F

• Fiat Currency – Government-issued currency not backed by a physical commodity.
• Forex (FX) – Short for “foreign exchange,” referring to the global currency market.
• Fundamental Analysis – A trading approach based on economic and financial data.
• Floating Exchange Rate – A currency exchange rate determined by supply and demand.
• Futures Contract – A standardized contract to buy or sell an asset at a future date.

G

• Gap – Unfulfilled price that the market usually comes back to fill.
• GDP (Gross Domestic Product) – The total value of goods and services produced by a country.
• Going Long – Buying a currency pair in anticipation of its value increasing.
• Going Short – Selling a currency pair in anticipation of its value decreasing.
• Gap – A sharp price movement where no trading occurs between two price levels.

H

• Hedge – A strategy used to minimize risk in forex trading.
• High-Frequency Trading (HFT) – A type of trading using algorithms to execute large numbers of trades rapidly.
• High Risk – A position that has some negative confluences and should likely be managed more carefully.
• Higher Timeframe (HTF) – Analyzing price on the higher timeframe to gauge directional bias.
• Hook Point – An area where the market sold (or bought aggressively), creating the shape of a hook.

I

• Inflation – The rate at which the general level of prices for goods and services rises.

J

• Japanese Candlestick – A type of chart representation showing price movements.

K

• Kiwi – A slang term for the New Zealand Dollar (NZD).

L

• Leverage – The use of borrowed funds to increase trading exposure.
• Low Risk – A position that is high probability that should be taken often.

M

• Margin – The collateral required to open a leveraged trade.
• Middle Section – A consolidation that is part of a larger three-touch structure. (Usually in the state of reversal or continuation).
• Multi Timeframe Analysis (MTF) – Using multiple timeframes to stack confluence, such as the Daily, H4, H1, and 15/5min.

N

• Non-Farm Payrolls (NFP) – A key U.S. employment report affecting forex markets.

O

• Overbought – A condition where an asset is considered too expensive and may decline.

P

• Pip (Percentage in Point) – The smallest price movement in a currency pair.

Q

• Quantitative Easing (QE) – A central bank policy of injecting money into the economy to stimulate growth.

R

• Reduced Risk Entry – An entry taken on the break of a consolidation rather than a specific candle.
• Resistance Level – A price level where selling pressure is strong enough to prevent further price increases.
• Retrace Candle – A momentous candle that removes the entire movement of the prior candle.
• Reversal Structure – A specific structure that shows exhaustion in the market. This is the likely reversal point of price.
• Risk Entry – An entry taken on a specific candle.

S

• Scalping – A trading strategy focused on small, quick profits.

T

• Technical Analysis – The study of past market data to forecast price movements.

U

• Underlying Asset – The financial instrument on which derivatives are based.

V

• Value Area – An area of interest where the volume is expected to be stacked in the market.
• Volatility – The degree of price fluctuation in a currency pair.
• V-Shape – A quick style recovery in the shape of a V.

W

• Whipsaw – A sharp price movement followed by a reversal.

X

• XAU/USD – The forex symbol for gold trading in U.S. dollars.

Y

• Yield Curve – A graph showing interest rates of bonds with different maturities.

Z

• Zero-Coupon Bond – A bond that does not pay interest but is traded at a discount.