Glossary

The price you buy at. Always slightly above the bid. → Spread, commission and swap: the real cost of every trade

An indicator measuring how much a market typically moves per candle. Often used to set stop distances.

Testing a strategy's rules on past price data to see how it would have performed.

Your account's money from closed trades only, ignoring open trades. → Drawdown explained: how deep is normal, and the maths of recovery

The first currency in a pair. In EURUSD it is the euro. → Pips, points and lots: how price moves become money

Expecting or describing falling prices.

The price you sell at. Always slightly below the ask. → Spread, commission and swap: the real cost of every trade

Moving the stop loss to the entry price, so the trade can no longer lose (apart from costs and slippage).

Price moving decisively beyond a level or range.

Expecting or describing rising prices.

A chart bar showing the open, high, low and close for one period.

A contract that pays the difference in price between opening and closing, without owning the underlying asset.

An evaluation phase where you must reach a profit target without breaking risk rules. → Prop-firm rules explained: daily loss, max drawdown and the rules that fail most traders

A fee per trade charged by raw/ECN accounts, often per lot round trip. → Spread, commission and swap: the real cost of every trade

Automatically opening trades in your account that mirror another account or signal source. → How to choose a signal provider or channel (and avoid the scams)

How closely two markets move together. EURUSD and GBPUSD are usually positively correlated. → Risk per trade: the 1–2% rule and position sizing

The most an account may lose in one day, a rule at most prop firms and a good personal rule. → Prop-firm rules explained: daily loss, max drawdown and the rules that fail most traders

A practice account with virtual money and real prices.

When price and an indicator (like RSI) point in different directions, hinting that momentum is fading.

The fall in an account from its highest point to a later low. → Drawdown explained: how deep is normal, and the maths of recovery

An account type with very tight spreads plus a commission. → Spread, commission and swap: the real cost of every trade

Total open position value divided by equity: the leverage you are really using. → Leverage and margin: the tool that grows accounts, and empties them

The price at which a trade is opened.

Balance plus or minus the profit or loss of open trades. → Leverage and margin: the tool that grows accounts, and empties them

A rule that closes or stops trading when equity falls to a set level. → Drawdown explained: how deep is normal, and the maths of recovery

The average result per trade over many trades, often measured in R. → Risk–reward and win rate: the maths of a profitable strategy

In Smart Money Concepts, a gap between candles left by a fast move, which price may later revisit.

Levels (38.2%, 50%, 61.8%…) used to estimate where a pullback may end.

Fear of missing out: entering a trade because price is moving, not because of a plan. → Fear, greed and FOMO: the two forces behind most trading mistakes

Equity minus used margin: what is available for new trades and to absorb losses. → Leverage and margin: the tool that grows accounts, and empties them

Analysing markets through economics, interest rates and news.

A prop firm account you trade with the firm's capital after passing its evaluation. → Prop-firm rules explained: daily loss, max drawdown and the rules that fail most traders

A jump in price with no trading in between, common at the weekly open or after news.

Placing trades at fixed distances as price moves; risky when combined with averaging down.

Opening a position that offsets the risk of another.

Controlling a position larger than your deposit. 1:100 means $1 controls $100. → Leverage and margin: the tool that grows accounts, and empties them

An order to buy below or sell above the current price.

How easily a market can be traded without moving the price. Also, in SMC, clusters of stop orders.

A buy position: profits when price rises.

The size of a trade. 1 standard lot = 100,000 units of currency; on gold usually 100 ounces. → Pips, points and lots: how price moves become money

The money set aside by the broker to keep a leveraged position open. → Leverage and margin: the tool that grows accounts, and empties them

A warning when the margin level falls to a set point. → Leverage and margin: the tool that grows accounts, and empties them

Equity ÷ used margin × 100%. → Leverage and margin: the tool that grows accounts, and empties them

An order to buy or sell immediately at the current price.

Doubling the size after each loss. Can wipe out an account in one long move. → Risk–reward and win rate: the maths of a profitable strategy

The deepest fall from a peak in an account's history. → Drawdown explained: how deep is normal, and the maths of recovery

An average of recent prices, drawn as a line to show trend direction.

A rule (required for retail clients in the EU, UK and Australia) that you can't lose more than your deposit. → Leverage and margin: the tool that grows accounts, and empties them

Trading around scheduled economic releases.

The monthly US jobs report, one of the most market-moving releases.

In Smart Money Concepts, the last opposite candle before a strong move, treated as a zone.

Taking more trades than your plan allows, often from boredom or emotion. → Fear, greed and FOMO: the two forces behind most trading mistakes

Closing part of a position and leaving the rest open.

An order waiting to be triggered at a set price (limit or stop).

The standard unit of price movement: 0.0001 on most pairs, 0.01 on yen pairs. → Pips, points and lots: how price moves become money

What one pip is worth for a given trade size. → Pips, points and lots: how price moves become money

A tenth of a pip: the fifth decimal on most quotes. → Pips, points and lots: how price moves become money

In MetaTrader, the smallest price step. On five-digit quotes, 10 points = 1 pip. → Pips, points and lots: how price moves become money

How large a trade is, in lots or units. → Risk per trade: the 1–2% rule and position sizing

A company that funds traders with its capital in exchange for a profit share. → Prop-firm rules explained: daily loss, max drawdown and the rules that fail most traders

A temporary move against the trend before it continues.

The second currency in a pair. In EURUSD it is the US dollar. → Pips, points and lots: how price moves become money

A result measured in units of the amount risked. Risk $100 and make $200 = 2R. → Risk–reward and win rate: the maths of a profitable strategy

A period when price moves sideways between a high and a low.

Trading to win back a loss rather than following a plan. → Revenge trading: how one bad loss becomes a bad week, and how to stop it

The amount (usually % of the account) you lose if the stop loss is hit. → Risk per trade: the 1–2% rule and position sizing

The potential loss compared with the potential gain of a trade. → Risk–reward and win rate: the maths of a profitable strategy

The daily moment (around 5 pm New York time) when positions roll to the next day and swap is charged. → Spread, commission and swap: the real cost of every trade

A momentum indicator from 0 to 100; above 70 is often called overbought, below 30 oversold.

Very short-term trading aiming for small moves many times a day.

A sell position: profits when price falls.

The difference between the price you expected and the price you got.

The difference between the bid and the ask price. → Spread, commission and swap: the real cost of every trade

An order that closes a trade at a set loss. → Risk per trade: the 1–2% rule and position sizing

An order to buy above or sell below the current price.

When the broker closes positions because the margin level fell too low. → Leverage and margin: the tool that grows accounts, and empties them

Price levels where buying (support) or selling (resistance) has repeatedly appeared.

The overnight fee or credit for holding a position past rollover. → Spread, commission and swap: the real cost of every trade

Holding trades for days to weeks to capture one market swing.

An order that closes a trade at a set profit.

Analysing price charts and indicators to make trading decisions.

An emotional state where decisions get worse after losses or frustration. → Revenge trading: how one bad loss becomes a bad week, and how to stop it

A stop loss that moves with price to lock in profit.

A sustained move in one direction: higher highs and lows (up) or lower highs and lows (down).

How much and how fast prices move.

The percentage of trades that end in profit. → Risk–reward and win rate: the maths of a profitable strategy