Trading glossary

Heavy participation at a level that fails to move price, because the other side is meeting the orders as they arrive. It shows as a tall volume bar under a candle with a small body, often with a wick into the level.

Explained in Effort versus result: when heavy volume moves price very little

See also Effort versus result · Support · Resistance

Combining several liquidity providers' price streams into one quote by taking the best bid and the best ask across them. A CFD broker's quote is built this way.

Explained in How a CFD price is formed: liquidity providers, aggregation and last look

See also Liquidity provider · Best bid and offer · Last look

A machine-tested condition — a price reaching a level, a time window opening — that summons the trader to the chart. It is a condition, not an instruction: the decision table is read when it fires.

Explained in Alerts and execution rules: what the machine watches and what the trader decides

See also Decision table · Execution rule · Trigger

The state of gathering more information instead of deciding, because deciding carries the risk of being wrong. It presents as diligence and functions as avoidance.

Explained in Fear in trading: hesitation, early exits and the trades you never take

See also Fear response · Hesitation

A consolidation pattern with a flat upper boundary and a rising lower boundary, formed as lows push higher against a fixed level.

Explained in Triangles, wedges and rectangles: patterns of compression

See also Descending triangle · Symmetrical triangle · Consolidation

The high and low set during the Asian trading hours, roughly from the Tokyo open to the London open, when participation is thinnest. Usually the narrowest range of the day, and the first range the London open has to resolve.

Explained in Session opens and the Asian range: how a trading day is structured

See also Trading session · Opening range · Thin market

The lowest price a resting seller is currently willing to accept. A market buy fills here. Also called the offer.

Explained in How a price is made: the bid, the ask and the book behind the quote

See also Bid · Spread · Order book

Average True Range — the average size of a period's full range, including any gap from the previous close. It measures how much an instrument moves, not which way.

Explained in Bollinger Bands and ATR: measuring volatility, not direction

See also Standard deviation · Bollinger Bands

A stop placed a multiple of the current ATR from the entry rather than a fixed number of pips, so that it widens in a loud regime and tightens in a quiet one. Position size is derived from it.

Explained in Sizing and stops by volatility: keeping risk constant when the range changes

See also ATR · Volatility-adjusted size · Stop-loss

Judging how likely something is by how easily an example comes to mind. Vivid or recent events feel more probable than their frequency warrants.

Explained in Recency and availability: why the last three trades feel like the whole picture

See also Recency bias · Sample size

The mean size of losing trades over a sample, usually expressed in R or account percentage. Read alongside average win, it is one half of expectancy.

Explained in Cutting winners and holding losers: one habit, not two · Reading your own drawdown: normal variance or broken strategy?

See also Average win · Expectancy · R-multiple

The mean size of winning trades over a sample. On its own it says nothing — it is meaningful only against average loss and win rate.

Explained in Cutting winners and holding losers: one habit, not two

See also Average loss · Expectancy · Win rate

A futures curve in which later-dated contracts cost less than nearer ones. Rolling a long position forward moves it onto a cheaper contract, the reverse of contango.

Explained in How to trade oil CFDs: a framework for WTI crude

See also Contango · Futures rollover · USOIL

The first currency in a pair — the one being bought or sold. In EURUSD it is the euro; a long position is long the base and short the quote.

Explained in The dollar leg: why the major pairs are often one trade

See also Quote currency · Dollar leg · Net currency exposure

The highest resting bid and the lowest resting ask at a moment — the two prices a quote shows, and the two sides of the spread.

Explained in How a price is made: the bid, the ask and the book behind the quote

See also Bid · Ask · Spread

The highest price a resting buyer is currently willing to pay. A market sell fills here.

Explained in How a price is made: the bid, the ask and the book behind the quote

See also Ask · Spread · Order book

The rectangular part of a candlestick, spanning the open and the close. Its length shows how far price travelled between those two points.

Explained in Candlestick anatomy: what one candle tells you · How to read a price chart: candlesticks explained simply

See also Wick · Doji · Marubozu

A moving average with bands plotted a set number of standard deviations above and below it. The bands widen as volatility rises and narrow as it falls.

Explained in Bollinger Bands and ATR: measuring volatility, not direction

See also Standard deviation · Bollinger squeeze · ATR

A period in which Bollinger Bands narrow sharply, indicating volatility has contracted. It describes the current state of volatility, not the direction of what follows.

Explained in Bollinger Bands and ATR: measuring volatility, not direction

See also Bollinger Bands · Volatility contraction

Drawing subsamples with replacement from a data set and computing a statistic for each, hundreds or thousands of times, to estimate how that statistic varies. Applied to a trade record it produces the drawdown distribution.

Explained in Monte Carlo and drawdown: what the record's order hides

See also Monte Carlo simulation · Sample size

Price closing beyond the most recent swing high or swing low in the opposing direction, ending the sequence that defined the trend.

Explained in Swing highs and lows: reading market structure

See also Swing high · Swing low · Market structure

A stop moved to the entry price once the trade has moved in its favour. It removes the possibility of a loss on that trade and converts the winners that pull back through the entry first into scratches.

Explained in Managing the open trade: partials, break-even and trailing, priced honestly

See also Scratch · Trade management · Stop-loss

The win rate at which a given risk-reward ratio produces neither profit nor loss before costs. At 1:2 it is roughly 33%; at 1:1 it is 50%.

Explained in Risk-reward ratio: using it without fooling yourself

See also Risk-reward ratio · Win rate · Expectancy

Price moving decisively beyond a level that had been holding it. Whether it is a breakout or a false breakout is only known after price either holds or returns.

Explained in Breakouts and false breakouts: why most breaks fail

See also False breakout · Retest · Liquidity

A wide, high-volume advance near the end of a rise, after which price fails to extend. Participation peaks as the last buyers arrive at once, leaving few to buy from the sellers who follow.

Explained in Volume at breakouts and climaxes: confirmation or exhaustion?

See also Selling climax · Effort versus result · Divergence

A chart in which each period is drawn as a body spanning open and close, with wicks reaching the high and low. It carries the same four values as an OHLC bar in a different shape.

Explained in How to read a price chart: candlesticks explained simply

See also OHLC bar · Line chart · Body

Borrowing, or selling, a low-interest currency to hold a higher-interest one and collect the difference. The yen has long been the funding side; when the trade unwinds, the funding currency rallies sharply.

Explained in How to trade USDJPY: a framework for the yen

See also Funding currency · Interest rate differential · Swap

The hours when an index's underlying stocks trade on their exchange — 09:30 to 16:00 New York for the NYSE. An index CFD quotes outside those hours on thinner liquidity; the cash open and close are the most active moments of the day.

Explained in How to trade US500 CFDs: a framework for the S&P 500

See also US500 · Trading session · Liquidity

A contract for difference — an agreement to exchange the difference in an instrument's price between opening and closing a position. The instrument itself is never owned.

Explained in What is CFD trading? How online CFDs work, in plain English

See also Leverage · Long position · Short position

A trailing stop set a multiple of ATR below the highest high since entry — by default the 22-period high minus three times a 22-period ATR — so the exit trails price by a volatility unit rather than a fixed distance.

Explained in Sizing and stops by volatility: keeping risk constant when the range changes

See also ATR stop · Trailing stop

A pair of parallel trendlines containing price — one along the swing lows and one along the swing highs.

Explained in How to draw trendlines and channels correctly

See also Trendline · Slope

A plot of price against time. It records what every participant actually paid, which is why technical analysis takes it as its subject.

Explained in What is technical analysis? A beginner's guide

See also Candlestick chart · Line chart · OHLC bar

Entering after the planned entry has already passed, at a worse price and with a wider stop than the plan specified.

Explained in FOMO: chasing the move you already missed

See also FOMO · Late entry

A written sequence of checks completed before an action, so that the decision does not depend on what is remembered under pressure.

Explained in Pre-trade and post-trade routines: checklist and analysis

See also Pre-trade routine · Mechanism

A per-trade fee charged by volume, typically quoted per lot per side. Unlike the spread it is stated separately rather than embedded in the quote.

Explained in Spreads, swaps and the real cost of holding a position

See also Spread · Round-turn cost · Swap

The CFTC's weekly report of open interest in US futures and options on futures by trader category, as of each Tuesday and published on Friday. For FX it is the one public record of positioning, and it covers futures, not spot.

Explained in Order flow without an exchange: what a CFD trader can and cannot see

See also Positioning · Order flow

The proportion of trades that followed the written plan, regardless of whether they made money. It measures process rather than outcome.

Explained in Building a trading routine you can run for years · Process versus outcome: judging the part you control

See also Rule compliance · Process · Trading journal

A range around a measured statistic that, over many samples, would contain the true value a stated fraction of the time — for a mean, the mean plus or minus a t-value times its standard error. An expectancy whose interval includes zero has not yet shown an edge.

Explained in Expectancy with error bars: how sure the record lets you be

See also Standard error · Expectancy · Sample size

Evidence, arriving after a setup has formed, that the reason for it is holding — a rejection wick at a level, a higher low, a break of the last minor high. It is waited for after the setup, where confluence is counted before it.

Explained in Multi-timeframe confluence: what agreement between charts is worth

See also Confluence · Retest · Break of structure

The tendency to seek and weight evidence supporting what you already believe, while discounting evidence against it.

Explained in Confirmation bias: finding the chart that agrees with you · Stochastics and KDJ — and how to stop adding indicators

See also Timeframe shopping · Invalidation

An entry taken after the evidence — a candle close beyond the level on the entry timeframe. It pays for proof with a worse price and a wider stop.

Explained in Entry triggers: close, retest or limit — and what each one costs

See also Trigger · Limit entry · Retest entry

Two or more independent reasons pointing at the same price area — for example a trendline meeting a prior level.

Explained in Multi-timeframe confluence: what agreement between charts is worth · Pullbacks and retracements: where trend entries belong

See also Support · Resistance · Fibonacci retracement · Timeframe alignment · Confirmation

The median expectation of surveyed economists for an upcoming data release. Price generally reacts to the gap between the release and this figure, not to the figure itself.

Explained in Trading the economic calendar without getting whipsawed

See also Economic calendar

A period in which price moves within a contained range rather than progressing, typically with declining range and volume.

Explained in Continuation patterns: when a pause is not a reversal · Trend or range? How to tell what a market is doing

See also Range · Volatility contraction · Rectangle

A futures curve in which later-dated contracts cost more than nearer ones. Rolling a long position forward moves it onto a dearer contract each time, which makes holding a running cost.

Explained in How to trade oil CFDs: a framework for WTI crude

See also Backwardation · Futures rollover · USOIL

Everything that must be true before the entry chart is opened — the higher-timeframe bias, a level with a reason, the session, the count of independent reasons. The first part of a setup, and the part most trades skip.

Explained in Anatomy of a trading setup: context, trigger, invalidation, target

See also Trading setup · Directional bias · Confluence

The quantity of the underlying instrument represented by one lot — 100,000 units for a standard forex lot, 100 ounces for XAUUSD.

Explained in How to trade gold CFDs: a framework for XAUUSD · What is a pip in forex? Pip value and 20-pip examples

See also Lot · Pip value · Notional value

A chart of a process statistic against a centre line and upper and lower control limits set so that almost all points fall inside while the process is in control; a point outside warrants an investigation for its cause. Applied to a record, the statistic is the expectancy of each block of trades.

Explained in Review cadence and kill criteria: deciding in advance when the system stops

See also Kill criteria · Standard error · Expectancy

Open trades that share a currency leg or a common driver, so that their profits and losses move together. For the risk budget they are one exposure, however many tickets they occupy.

Explained in Correlated positions: when two trades are one

See also Exposure · Net currency exposure · Correlation

The degree to which two instruments' price changes move together over a chosen period. It describes a past window and does not show which instrument leads or that either causes the other.

Explained in Correlation between instruments: what moves together, and for how long

See also Correlation coefficient · Lookback period · Correlated positions

A number between −1 and +1 summarising how consistently two instruments moved together over a lookback: +1 perfectly together, −1 perfectly opposite, 0 no consistent relationship. It is calculated on price changes, not levels.

Explained in Correlation between instruments: what moves together, and for how long

See also Correlation · Lookback period

A trade taken against the higher-timeframe bias. Its natural target is the nearest higher-timeframe level, which is close, and its invalidation is the higher-timeframe swing, which is far.

Explained in When timeframes disagree: pullback, or the start of a reversal?

See also Directional bias · Risk-reward ratio · Pullback

A currency pair with no US dollar on either side, such as EURGBP. Its price is the ratio of the two dollar pairs, so it moves when the two legs move by different amounts.

Explained in How to trade GBPUSD: a framework for cable

See also Major pair · GBPUSD · EURUSD

A government or central bank buying or selling its own currency in the market to move the exchange rate. Japan's Ministry of Finance publishes its intervention amounts monthly; the moves it produces are large and fast.

Explained in How to trade USDJPY: a framework for the yen

See also USDJPY · Gap · Slippage

A ranking of currencies by how each has performed against several counterparts over the same window and timeframe. The pair between the strongest and the weakest is the one whose two legs push the same way.

Explained in Relative strength across pairs: choosing the pair by comparing its legs

See also Relative strength · Price relative · Dollar leg

The signal line of the stochastic oscillator — a short moving average of %K, used to smooth it and to generate crossover readings.

Explained in Stochastics and KDJ — and how to stop adding indicators

See also Stochastic oscillator · %K

The end of a daily candle, at the server's midnight. Retail spot forex puts the end of the trading day at 17:00 New York, so a server whose midnight falls there produces daily candles that match the convention.

Explained in Daily candles and server time: why your chart differs from someone else's

See also Server time · Previous day's high and low · Swap

A pre-set amount of loss after which trading stops for the day. It is set in advance precisely because the moment it applies is the moment judgement is worst.

Explained in Revenge trading and tilt: the loss that becomes four losses

See also Pre-commitment · Revenge trading · Tilt

The first price of the current daily candle. Price above it means buyers have had the better day so far; below it, sellers. A bias for the session, outranked by the higher-timeframe bias.

Explained in Session reference levels: yesterday's high and low, the daily open and the week

See also Reference level · Directional bias · Daily close

A shorter moving average crossing below a longer one. It is a description of past prices, and by construction it appears after the move it describes.

Explained in Moving averages: the indicator everything else is built on

See also Golden cross · Moving average

The decline in decision quality after a sustained period of deciding. Later decisions in a long session tend toward the default or the impulsive.

Explained in Screen time and decision fatigue

See also Screen time · Session length

One column of a decision table: a unique combination of condition values — true, false or irrelevant — and the action that follows.

Explained in From rules to a decision table: every state of the market gets an answer

See also Decision table · Else rule

A grid with a setup's conditions and actions as rows and one column per rule, each column a unique combination of condition values and the action it produces. It gives every state of the market an answer, and shows the gaps and contradictions prose hides.

Explained in From rules to a decision table: every state of the market gets an answer

See also Decision rule · Else rule · Trading plan

The resting volume at each price near the touch, on both sides. The Depth of Market window in MetaTrader 5 shows it where the broker provides it; on over-the-counter instruments the quotes shown are the broker's own.

Explained in Spread, depth and slippage: what execution actually costs

See also Order book · Liquidity · Market impact

A consolidation pattern with a flat lower boundary and a falling upper boundary, formed as highs push lower against a fixed level.

Explained in Triangles, wedges and rectangles: patterns of compression

See also Ascending triangle · Symmetrical triangle

Support provided by a rising trendline rather than a horizontal level — the price at which it sits changes with time.

Explained in How to draw trendlines and channels correctly

See also Trendline · Support · Slope

The direction, long or short, that the higher timeframe's structure supports — or none when it is ranging. It is set before the trading chart is read and is changed only by the higher chart's own structure.

Explained in Top-down analysis: reading three timeframes in a fixed order

See also Market structure · Top-down analysis · Break of structure

Acting on a decision made in advance rather than re-deciding in the moment. It is a property of the structure around a trader, not of willpower alone.

Explained in Why trading psychology matters more than your strategy

See also Mechanism · Pre-commitment · Trading rule

The tendency to close winning positions early and hold losing ones, because realising a loss confirms it and realising a gain relieves the fear of losing it.

Explained in Cutting winners and holding losers: one habit, not two · Loss aversion: why losing hurts more than winning feels good

See also Loss aversion · Prospect theory

When price makes a new extreme and an indicator does not — a higher high in price against a lower high in the indicator, or the reverse.

Explained in RSI explained: why overbought does not mean sell

See also RSI · MACD · Stochastic oscillator

A candlestick whose open and close are at or near the same price, leaving almost no body. It records a period that ended where it began.

Explained in Candlestick anatomy: what one candle tells you

See also Body · Wick

The US dollar side of a currency pair. Every major pair contains it, so a dollar move appears in all of them at once — in the same direction where the dollar is the quote currency and the opposite direction where it is the base.

Explained in The dollar leg: why the major pairs are often one trade

See also US Dollar Index · Base currency · Quote currency

Two lows at a similar level separated by an intervening high, completed when price closes above that high.

Explained in Head and shoulders, double tops and double bottoms

See also Double top · Neckline

Two highs at a similar level separated by an intervening low, completed when price closes below that low.

Explained in Head and shoulders, double tops and double bottoms

See also Double bottom · Neckline

A sequence of lower highs and lower lows.

Explained in Trend or range? How to tell what a market is doing

See also Uptrend · Range · Market structure

A decline from an account's peak, measured to its lowest point before a new peak is made. It is normally quoted as a percentage of that peak.

Explained in The psychology of a drawdown · Reading your own drawdown: normal variance or broken strategy?

See also Peak-to-trough · Recovery arithmetic · Variance

The weeks after each quarter closes when listed companies report results. An index moves on constituent-specific news then rather than on macro, and the largest constituents move it most.

Explained in How to trade US500 CFDs: a framework for the S&P 500

See also US500 · Economic calendar

A schedule of upcoming data releases and policy decisions, with the previous figure and the consensus forecast for each.

Explained in Trading the economic calendar without getting whipsawed

See also Consensus forecast · Slippage

A positive expectancy that stays positive after spread and swap and whose confidence interval sits above zero. A positive number on its own is not one.

Explained in Expectancy with error bars: how sure the record lets you be

See also Expectancy · Confidence interval · Overfitting

Reading volume as the effort and the price change it produced as the result. Large effort with a small result is absorption; small effort with a large result is a thin market. From the Wyckoff method, where a divergence between the two is an early warning of a change in trend.

Explained in Effort versus result: when heavy volume moves price very little

See also Absorption · Thin market · Tick volume

The last column of a decision table, matching every combination the other columns do not, with the action skip. It makes the table complete and turns the most common decision — nothing — into a rule.

Explained in From rules to a decision table: every state of the market gets an answer

See also Decision table · Decision rule

The position size above which a trader stops reading the chart and starts reading the profit and loss figure.

Explained in Sizing down: the one lever that fixes most psychology problems

See also Position size · Risk per trade

A candle whose body completely covers the previous candle's body in the opposite direction.

Explained in Candlestick reversal patterns that are worth knowing

See also Body · Pin bar · Evening star

Account balance plus or minus the running profit and loss of open positions. It is the figure margin level is calculated from, not the balance.

Explained in Margin calls and stop-outs, explained before you meet one

See also Margin level · Free margin · Margin

Increasing position size after a loss in order to recover it faster. It raises the size of the next loss at the point the account can least absorb it.

Explained in Revenge trading and tilt: the loss that becomes four losses

See also Revenge trading · Tilt · Daily loss limit

The euro priced in US dollars — how many dollars one euro buys. One standard lot is 100,000 euros, so one pip is 10 USD per lot. The pair between the world's two most traded currencies.

Explained in How to trade EURUSD: a framework for the most traded pair

See also Major pair · Interest rate differential · Pip value

A three-candle formation at a high: a strong up candle, a small-bodied candle, then a down candle closing well into the first.

Explained in Candlestick reversal patterns that are worth knowing

See also Engulfing candle · Shooting star

Everything a round trip pays beyond the mid price: the spread, market impact and slippage. A setup's edge is what remains after it.

Explained in Spread, depth and slippage: what execution actually costs

See also Spread · Market impact · Slippage · Round-turn cost

The distance between what a trader planned to do and what they actually did. It is the quantity trading psychology is concerned with.

Explained in Why trading psychology matters more than your strategy

See also Compliance rate · Trading psychology

A rule fixing, for each entering column of the decision table, every property of the order that would otherwise be chosen at the ticket: type, expiry, the stop and target attached at placement, size, and the spread and staleness limits.

Explained in Alerts and execution rules: what the machine watches and what the trader decides

See also Alert · Spread filter · Pending order

The average result per trade, given a win rate and the average sizes of wins and losses. It determines whether a strategy makes money over a sample.

Explained in Cutting winners and holding losers: one habit, not two

See also Win rate · Average win · Average loss

A moving average that weights recent closes more heavily than older ones, so it turns sooner than a simple moving average of the same length.

Explained in Moving averages: the indicator everything else is built on

See also Simple moving average · Moving average · MACD

What an account actually holds once every open position is netted by currency or by driver, as opposed to the list of tickets. The per-trade risk limit applies to exposure.

Explained in Correlated positions: when two trades are one

See also Net currency exposure · Correlated positions · Risk per trade

Price moving beyond a level and then returning back through it, leaving the level intact.

Explained in Breakouts and false breakouts: why most breaks fail

See also Breakout · Retest · Liquidity

The physiological and attentional narrowing that follows an anticipated loss, which shortens the time horizon a decision is made over.

Explained in Fear in trading: hesitation, early exits and the trades you never take

See also Hesitation · Analysis paralysis

A set of horizontal levels placed at fixed proportions of a prior move — commonly 38.2%, 50% and 61.8% — used to locate where a pullback may end.

Explained in Pullbacks and retracements: where trend entries belong

See also Pullback · Retracement · Confluence

A short counter-trend consolidation in a small parallel channel, following a sharp move.

Explained in Continuation patterns: when a pause is not a reversal

See also Pennant · Consolidation · Measured move

Fear of missing out — the urge to enter after the planned entry has passed, driven by watching a move continue without you.

Explained in FOMO: chasing the move you already missed

See also Chasing · Late entry

The same record as a manual backtest, kept in real time on a demo account. It catches what a replay hides: missed triggers, spread, slippage, news and hesitation.

Explained in Testing a setup by hand: sample size, the record, and what works means

See also Manual backtest · Trading journal

Equity minus the margin currently held against open positions — the amount available to open further positions or to absorb adverse movement.

Explained in Margin calls and stop-outs, explained before you meet one

See also Margin · Equity · Margin level

The study of economic data, policy and company results to judge what an instrument is worth. It asks why price should move; technical analysis asks what price is doing.

Explained in What is technical analysis? A beginner's guide

See also Technical analysis · Economic calendar

The low-rate currency sold or borrowed to finance a carry trade. Its price tends to fall while the trade is on and to jump when the trade is unwound in stress.

Explained in How to trade USDJPY: a framework for the yen

See also Carry trade · USDJPY

Switching a CFD from an expiring futures contract to the next one. The quoted price steps by the gap between the two; brokers typically apply a cash adjustment so an open position is not paid or charged by the step itself.

Explained in How to trade oil CFDs: a framework for WTI crude

See also Contango · Backwardation · USOIL · Gap

A discontinuity between one period's close and the next period's open, with no trading in between. In CFDs it most often appears at the Monday open.

Explained in Weekend gaps: why Monday opens where it does

See also Slippage · Trading session

The pound sterling priced in US dollars — how many dollars one pound buys — known as cable. The quote currency is the dollar, so one pip on a standard lot is a fixed 10 USD, as on EURUSD.

Explained in How to trade GBPUSD: a framework for cable

See also Major pair · Pip value · Cross pair

The gold price divided by the silver price — how many ounces of silver one ounce of gold buys. A relative-value gauge: it says which metal is expensive against the other, not which will move to close the gap.

Explained in How to trade silver CFDs: a framework for XAGUSD

See also XAUUSD · XAGUSD

A shorter moving average crossing above a longer one. Like the death cross it summarises prices that have already occurred.

Explained in Moving averages: the indicator everything else is built on

See also Death cross · Moving average

In trading, the impulse to extend a position's target while it is running, converting a planned outcome into an open-ended one.

Explained in Greed and target creep: how winning trades become losing ones

See also Target creep · Partial exit

A candle with a small body at the top of its range and a long lower wick, showing a fall within the period that was bought back before the close.

Explained in Candlestick reversal patterns that are worth knowing

See also Pin bar · Rejection · Shooting star

Three peaks with the middle one highest, completed when price closes below the neckline joining the two intervening lows.

Explained in Head and shoulders, double tops and double bottoms

See also Inverse head and shoulders · Neckline · Measured move

Failing to act on a setup that met the written criteria. It usually follows a recent loss rather than anything on the chart.

Explained in Fear in trading: hesitation, early exits and the trades you never take

See also Fear response · Analysis paralysis

A swing high above the previous swing high. A sequence of them, with higher lows, is what defines an uptrend.

Explained in Trend or range? How to tell what a market is doing

See also Swing high · Uptrend · Market structure

A chart whose candles each cover more market time than the one being traded, used to establish context for it.

Explained in Trading timeframes explained: which chart should you use?

See also Timeframe · Multi-timeframe analysis · Noise

A support or resistance level identified on a chart above the one being traded and drawn onto the trading chart. On the smaller chart it spans the range of the larger candles' wicks, so it is a zone rather than a line.

Explained in Higher-timeframe levels: carrying the daily chart down to the hourly

See also Support · Resistance · Zone · Key level

Remembering a past decision as more obvious than it was, because the outcome is now known. It is why a journal records reasoning at the time of the decision.

Explained in The trading journal: recording decisions, not just results

See also Trading journal · Outcome bias

A contract for difference on a stock index level rather than on a single share. It trades near round the clock, tracks futures outside the cash session, and is typically adjusted when constituents pay dividends.

Explained in How to trade US500 CFDs: a framework for the S&P 500

See also US500 · CFD · Cash session

How much of an index's weight sits in its largest constituents. The Nasdaq-100 caps any one company at 24% and the combined weight of companies above 4.5% at 48%; when a cap is breached the index is rebalanced to restore it.

Explained in How to trade US100 CFDs: a framework for the Nasdaq-100

See also US100 · Reconstitution · Earnings season

A candle whose entire range falls within the previous candle's range, showing a period that failed to extend in either direction.

Explained in Continuation patterns: when a pause is not a reversal

See also Consolidation · Volatility contraction

The gap between the interest rates, or expected rates, of a pair's two currencies. It is the persistent driver of a currency pair and the source of its overnight swap.

Explained in How to trade EURUSD: a framework for the most traded pair

See also EURUSD · Swap · Economic calendar

The price at which the reason for a trade is no longer true. A stop belongs there rather than at a chosen loss amount.

Explained in Confirmation bias: finding the chart that agrees with you · Stop losses: placement is the decision, not presence

See also Stop-loss · Stop distance · Confirmation bias

Three troughs with the middle one lowest, completed when price closes above the neckline joining the two intervening highs.

Explained in Head and shoulders, double tops and double bottoms

See also Head and shoulders · Neckline

The main line of the stochastic oscillator, showing where the current close sits within the high-low range of the lookback period, on a 0–100 scale.

Explained in Stochastics and KDJ — and how to stop adding indicators

See also Stochastic oscillator · %D

A variant of the stochastic oscillator that adds a third line, J, derived from %K and %D. J is more responsive and can travel outside the 0–100 range.

Explained in Stochastics and KDJ — and how to stop adding indicators

See also Stochastic oscillator · %K · %D

A level with a stated reason for being on the chart — a structural swing point, a recent flip, or a range boundary — as distinct from every level ever drawn.

Explained in Higher-timeframe levels: carrying the daily chart down to the hourly

See also Higher-timeframe level · Level flip · Swing low

Thresholds written before the first live trade at which a system is paused or stopped: a drawdown past the percentile sized for, an expectancy interval below costs after a set number of trades, an execution-error rate, a mechanism that has changed. Their numbers come from the validation, not from the week.

Explained in Review cadence and kill criteria: deciding in advance when the system stops

See also Review cadence · Control chart · Maximum drawdown · Confidence interval

A practice in electronic trading in which the provider receiving a trade request has a final opportunity to accept or reject it against its quoted price. The FX Global Code asks that it be transparent, disclosed, and used only for price and validity checks.

Explained in How a CFD price is formed: liquidity providers, aggregation and last look

See also Liquidity provider · Aggregation · Slippage

Entering after the move has already covered part of the distance to the target, which widens the stop and lowers the risk-reward ratio at once.

Explained in FOMO: chasing the move you already missed

See also Chasing · FOMO · Risk-reward ratio

A level that had acted as resistance going on to act as support after price closes above it, or the reverse.

Explained in Support and resistance explained for beginners

See also Support · Resistance · Retest

The ratio between a position's notional value and the margin required to hold it. It changes how much margin a position ties up; it does not change how much the position can lose.

Explained in What is CFD trading? How online CFDs work, in plain English

See also Margin · Notional value · Position size

An entry from an order resting at the level before anything has happened there. It gets the best price and the tightest stop, and no evidence that the level is holding.

Explained in Entry triggers: close, retest or limit — and what each one costs

See also Trigger · Confirmation entry · Retest entry

An order resting in the book at a chosen price, filled only if the market comes to it. Certain in price, uncertain to fill. MetaTrader 5's pending forms are Buy Limit and Sell Limit.

Explained in Market, limit and stop orders: which queue you join, and what it costs

See also Market order · Stop order · Limit entry

A chart connecting closing prices only. It discards the high, low and open, which makes the trend clearer and the period's activity invisible.

Explained in How to read a price chart: candlesticks explained simply

See also Candlestick chart · OHLC bar

The volume of resting orders available at and around a price. Where it is thin, the same order size moves price further.

Explained in Breakouts and false breakouts: why most breaks fail · Forex market hours: sessions, overlaps and when spreads widen

See also Slippage · Spread · Trading session

A concentration of resting orders at one place — stops just beyond a swing point, limits at a reference level or a round number. A large order fills where a pool sits, which is why price is drawn toward them.

Explained in Where liquidity rests: stops, limits and the levels that attract price

See also Resting orders · Stop cluster · Liquidity sweep

A bank or non-bank dealer that streams two-way prices to a broker. A CFD broker's quote is assembled from several of them.

Explained in How a CFD price is formed: liquidity providers, aggregation and last look

See also Aggregation · Last look · Liquidity

Price moving through an obvious level, triggering the stops resting beyond it, and reversing once that liquidity is consumed. It starts like a break and parts from one at the reclaim.

Explained in Liquidity sweeps and stop runs: reading a level from the orders behind it

See also Stop run · Reclaim · False breakout

A position that gains when the instrument's price rises and loses when it falls.

Explained in What is CFD trading? How online CFDs work, in plain English

See also Short position · CFD

Letting knowledge of later candles into a decision that is supposed to be made earlier — the reason a replay is done with the chart covered and the decision written before the next candle is revealed.

Explained in Testing a setup by hand: sample size, the record, and what works means

See also Manual backtest · Hindsight bias

The number of candles a calculation is made over — a moving average, a correlation coefficient, a strength ranking. Changing it changes the answer, so a reading is only meaningful with its lookback stated.

Explained in Correlation between instruments: what moves together, and for how long

See also Correlation coefficient · Moving average · Timeframe

The finding that losses are felt roughly twice as strongly as equivalent gains, which makes a loss and a gain of the same size behave differently in a decision.

Explained in Loss aversion: why losing hurts more than winning feels good

See also Prospect theory · Disposition effect

The standard unit of position size. One standard forex lot is 100,000 units of the base currency; a mini lot is 0.1 and a micro lot 0.01 of that.

Explained in What is a pip in forex? Pip value and 20-pip examples

See also Contract size · Pip value · Position size

Moving Average Convergence Divergence — a line plotting the difference between two exponential moving averages, with a signal line and a histogram of the gap between them.

Explained in MACD explained: momentum from two moving averages

See also Signal line · MACD histogram · Zero line cross

The bars showing the distance between the MACD line and its signal line. They measure the rate at which that gap is changing.

Explained in MACD explained: momentum from two moving averages

See also MACD · Signal line

A currency pair with the US dollar on one side and another heavily traded currency on the other — EURUSD, GBPUSD, USDJPY and a few more. The deepest and tightest-spread pairs.

Explained in How to trade EURUSD: a framework for the most traded pair

See also EURUSD · Spread · Liquidity

Replaying past candles one at a time, applying a setup's written rules exactly and recording every trade they would have taken, without seeing what comes next. The record it produces is the setup's first evidence.

Explained in Testing a setup by hand: sample size, the record, and what works means

See also Forward test · Look-ahead bias · Sample size · Expectancy

The portion of account equity set aside to hold an open position. It is a deposit held against the position, not a cost or a maximum loss.

Explained in Margin calls and stop-outs, explained before you meet one

See also Margin requirement · Free margin · Leverage

A notification that margin level has fallen to a threshold at which positions are at risk of being closed. It is a warning state, not the closure itself.

Explained in Margin calls and stop-outs, explained before you meet one

See also Margin level · Stop-out · Equity

Equity divided by margin in use, expressed as a percentage. It is the figure a platform watches to decide when to liquidate positions.

Explained in Margin calls and stop-outs, explained before you meet one · Weekend gaps: why Monday opens where it does

See also Equity · Margin call · Stop-out

The margin needed to open a given position, set by its notional value and the leverage applied to it.

Explained in Leverage, margin and why position sizing comes first

See also Margin · Leverage · Notional value

A trade that resembles the written criteria without meeting them. It is the form overtrading usually takes.

Explained in Boredom and overtrading: the cost of needing something to happen

See also Overtrading · Setup criteria

The extra cost of an order larger than the resting volume at the best price, which fills through worse prices as it walks the book.

Explained in Spread, depth and slippage: what execution actually costs

See also Depth of market · Slippage · Execution cost

An instruction to buy or sell now at whatever the book offers — the ask to buy, the bid to sell. Certain to fill, uncertain in price.

Explained in Market, limit and stop orders: which queue you join, and what it costs

See also Limit order · Stop order · Spread

The sequence of swing highs and swing lows that describes what price has been doing, independent of any indicator.

Explained in Swing highs and lows: reading market structure

See also Swing high · Swing low · Break of structure

A candle with a full body and little or no wick, meaning the period opened at one extreme and closed at the other.

Explained in Candlestick anatomy: what one candle tells you

See also Body · Wick

The largest peak-to-trough decline an equity curve shows over a period, as a percentage of the peak. For a record it is one ordering's worst; the resampled distribution shows the others.

Explained in Monte Carlo and drawdown: what the record's order hides

See also Drawdown · Peak-to-trough · Monte Carlo simulation

A projection that takes a pattern's height and extends it from the breakout point to give a reference target.

Explained in Measuring moves: turning a pattern into a target

See also Projection · Price target · Head and shoulders

A rule expressed as something that happens rather than something intended — a platform setting, an alert, a closed terminal. Rules written as intentions fail under pressure; mechanisms do not require the trader to be calm.

Explained in Why trading rules break under pressure

See also Pre-commitment · Trading rule · Discipline

The years of data needed so that the best of N tried configurations is not expected to reach a given in-sample Sharpe ratio by chance — with a Sharpe ratio of 1 as the bar, about 2 years for 7 trials and 5 years for 45 (Bailey, Borwein, López de Prado and Zhu, 2014). A necessary condition, not a sufficient one.

Explained in Overfitting and out-of-sample: why the best backtest is the one to distrust

See also Overfitting · Out-of-sample test

Generating many alternative sequences of a record's trades — shuffled or resampled — and measuring each for what depends on order: maximum drawdown, longest losing run, time under water. The record's own sequence is one draw among them.

Explained in Monte Carlo and drawdown: what the record's order hides

See also Bootstrap resampling · Maximum drawdown · Drawdown

The mean of the last N closing prices, recalculated each period. It smooths price and, by construction, lags it.

Explained in Moving averages: the indicator everything else is built on

See also Simple moving average · Exponential moving average · Golden cross

Reading a higher timeframe for context and a lower one for entry, so that the two are answering different questions.

Explained in Trading timeframes explained: which chart should you use?

See also Higher timeframe · Timeframe · Timeframe shopping

The line joining the reaction lows of a head and shoulders, or the highs of its inverse. A close beyond it is what completes the pattern.

Explained in Head and shoulders, double tops and double bottoms

See also Head and shoulders · Inverse head and shoulders

A broker policy under which a client account cannot go below zero, so a gap through a stop cannot create a debt to the broker.

Explained in What is CFD trading? How online CFDs work, in plain English · Margin calls and stop-outs, explained before you meet one

See also Gap · Stop-out

Each currency's longs minus its shorts across every open position, with each pair counted as long its base and short its quote or the reverse. It shows what a book of several pairs is really a position in.

Explained in Correlated positions: when two trades are one

See also Exposure · Correlated positions · Base currency

Price movement on a timeframe too small to carry information about the question being asked. What counts as noise depends on the horizon of the trade.

Explained in Trading timeframes explained: which chart should you use?

See also Timeframe · Higher timeframe

The full market value of a position — lot size times contract size times price. Profit, loss and pip value are all calculated from it, not from the margin posted.

Explained in What is CFD trading? How online CFDs work, in plain English · Leverage, margin and why position sizing comes first

See also Margin requirement · Leverage · Contract size

A vertical bar spanning the period's high and low, with a left tick for the open and a right tick for the close.

Explained in How to read a price chart: candlesticks explained simply

See also Candlestick chart · Line chart

The high and low a session sets before the next session arrives. The Asian range is the first of the day; the London high and low are the second, inherited by New York.

Explained in Session opens and the Asian range: how a trading day is structured

See also Asian range · Breakout · Reference level

The resting buy and sell orders for an instrument, sorted by price, with the best bid and best ask at the touch. On an exchange it is one shared queue; in an over-the-counter market it is the dealer's own, assembled from its providers.

Explained in How a price is made: the bid, the ask and the book behind the quote

See also Bid · Ask · Depth of market

The record of executed trades — size, side and time — as an exchange's tape keeps it. Over-the-counter markets have no consolidated tape, so on a CFD feed the tools that claim to read it are reading a proxy.

Explained in Order flow without an exchange: what a CFD trader can and cannot see

See also Tick volume · Depth of market · Positioning

Running a finished rule once on data set aside before any tuning. A record that resembles the in-sample one shows something that persists; a second pass after adjustment makes the data in-sample.

Explained in Overfitting and out-of-sample: why the best backtest is the one to distrust

See also Overfitting · Walk-forward test · Forward test

Judging the quality of a decision by its result. A sound decision can lose and a reckless one can win, and over a small sample it frequently does.

Explained in Overconfidence: why winning streaks are dangerous · Process versus outcome: judging the part you control

See also Process versus outcome · Variance · Hindsight bias

A conventional label for an oscillator reading above a threshold, commonly 70 on RSI. It describes the strength of recent momentum, not that price is too high.

Explained in RSI explained: why overbought does not mean sell

See also Oversold · RSI · Divergence

Overestimating the accuracy of one's own judgement. In trading it typically follows a run of wins, which is also when position size tends to rise.

Explained in Overconfidence: why winning streaks are dangerous

See also Variance · Outcome bias · Sample size

Tuning a rule until it fits the noise of the sample it was tested on, so that its in-sample record does not carry to data it has not seen. It grows with the number of configurations tried.

Explained in Overfitting and out-of-sample: why the best backtest is the one to distrust

See also Out-of-sample test · Walk-forward test · Minimum backtest length

The hours in which two trading sessions are open at once. The London–New York overlap carries the highest forex volume of the day.

Explained in Forex market hours: sessions, overlaps and when spreads widen

See also Trading session · Liquidity

A conventional label for an oscillator reading below a threshold, commonly 30 on RSI. In a downtrend it can persist for a long time without price turning.

Explained in RSI explained: why overbought does not mean sell

See also Overbought · RSI

Taking positions that do not meet the written criteria. Its usual cause is time in front of the screen rather than a change in the market.

Explained in Boredom and overtrading: the cost of needing something to happen

See also Marginal setup · Screen time · Setup criteria

Closing part of a position at a target while leaving the remainder open. It fixes some of the result and reduces the position's emotional weight.

Explained in Greed and target creep: how winning trades become losing ones · Measuring moves: turning a pattern into a target

See also Target creep · Trailing stop

How much trading activity a period or a price level attracted. On a forex chart it is estimated from tick volume; on an exchange it is measured by real volume.

Explained in Tick volume in forex and CFDs: what it measures and what it cannot

See also Tick volume · Real volume · Liquidity

The measurement basis of a drawdown — from the highest equity reached to the lowest point after it, before a new high.

Explained in The psychology of a drawdown

See also Drawdown · Recovery arithmetic

An order placed for later execution at a condition rather than now — in MetaTrader 5 the limit, stop and stop-limit types.

Explained in Market, limit and stop orders: which queue you join, and what it costs

See also Limit order · Stop order

A short consolidation in converging boundaries following a sharp move, narrower and briefer than a triangle.

Explained in Continuation patterns: when a pause is not a reversal

See also Flag · Symmetrical triangle

A candle with a small body and a long wick on one side, recording a move within the period that was fully reversed before the close.

Explained in Candlestick reversal patterns that are worth knowing

See also Hammer · Shooting star · Rejection

The standard increment a currency pair moves in — the fourth decimal place for most pairs, the second for pairs quoted against the yen.

Explained in What is a pip in forex? Pip value and 20-pip examples

See also Pip value · Point · Lot

What one pip of movement is worth in the account currency for a given position. It depends on the pair, the lot size and the account currency.

Explained in What is a pip in forex? Pip value and 20-pip examples

See also Pip · Lot · Contract size

The smallest increment a quote can move, which on a five-decimal forex quote is one tenth of a pip. Platforms often quote spreads in points.

Explained in What is a pip in forex? Pip value and 20-pip examples

See also Pip · Spread

The number of lots in a trade. It is what converts a stop distance into an amount of money at risk, and it sets the emotional weight of every decision that follows.

Explained in Sizing down: the one lever that fixes most psychology problems · Leverage, margin and why position sizing comes first

See also Risk per trade · Stop distance · Lot

What participants are holding, as opposed to what they are trading now. For FX it is reported weekly for exchange-traded futures in the Commitments of Traders data; for the spot market it is not reported at all.

Explained in Order flow without an exchange: what a CFD trader can and cannot see

See also Commitments of Traders · Order flow

A review conducted after a position is closed, comparing what was done against what the plan specified.

Explained in Pre-trade and post-trade routines: checklist and analysis

See also Pre-trade routine · Trading journal · Compliance rate

Deciding in advance what will happen in a situation, and removing the ability to reconsider once it arrives.

Explained in Building a trading routine you can run for years · Why trading rules break under pressure

See also Mechanism · Daily loss limit · Trading rule

A fixed sequence completed before entering, so that the decision to enter is made against criteria rather than against the current chart.

Explained in Pre-trade and post-trade routines: checklist and analysis

See also Checklist · Post-trade review · Trading routine

The highest and lowest prices of the last completed daily candle, extended across the current day. The most widely watched pair of reference levels, and dependent on where the platform cuts the day.

Explained in Session reference levels: yesterday's high and low, the daily open and the week

See also Reference level · Daily close · Daily open

Price movement read on its own, without indicators derived from it.

Explained in What is technical analysis? A beginner's guide

See also Technical analysis · Market structure

One instrument's price divided by another's, plotted as a line. It rises when the first is outperforming the second and falls when it is underperforming. A currency pair is a price relative by construction.

Explained in Relative strength across pairs: choosing the pair by comparing its legs

See also Relative strength · Currency strength

The price at which a position is planned to be closed in profit, set before entry.

Explained in Measuring moves: turning a pattern into a target

See also Measured move · Projection · Target creep

What a trader controls — the criteria, the sizing, the execution. It is separable from the outcome, which is decided by the market.

Explained in Process versus outcome: judging the part you control

See also Process versus outcome · Compliance rate

The distinction between the quality of a decision and the result it happened to produce. Over a small sample the two are only loosely related.

Explained in Overconfidence: why winning streaks are dangerous

See also Process · Outcome bias · Variance

Extending a measured distance from a reference point to produce a target. It is arithmetic applied to a pattern, not a forecast.

Explained in Measuring moves: turning a pattern into a target

See also Measured move · Price target

The model, from Kahneman and Tversky, describing how people evaluate outcomes against a reference point rather than in absolute terms, and weight losses more heavily than gains.

Explained in Loss aversion: why losing hurts more than winning feels good

See also Loss aversion · Disposition effect

A temporary move against the trend that does not break its structure.

Explained in Pullbacks and retracements: where trend entries belong

See also Retracement · Fibonacci retracement · Break of structure

The second currency in a pair — the one the price is expressed in. In EURUSD it is the dollar; a long position is short the quote.

Explained in The dollar leg: why the major pairs are often one trade

See also Base currency · Dollar leg · Pip value

A trade's result expressed in units of its initial risk. A trade risking 1% that gains 2% is +2R, regardless of the account size.

Explained in The trading journal: recording decisions, not just results · Risk-reward ratio: using it without fooling yourself

See also Risk per trade · Risk-reward ratio · Expectancy

A market moving between a roughly fixed high and low without making progress in either direction.

Explained in Trend or range? How to tell what a market is doing

See also Consolidation · Rectangle · Uptrend · Downtrend

The underlying market spread passed through with little or no mark-up, with the broker's charge taken as a commission per lot instead. The quoted spread is tight; the cost has moved into the commission, not disappeared.

Explained in What is the spread? The cost you pay before a trade can be flat

See also Spread · Commission · Round-turn cost

The quantity actually traded in a period — shares, contracts or units — as counted by an exchange. It exists only where trading passes through a central book, and a CFD feed carries it only if the broker passes it through.

Explained in Tick volume in forex and CFDs: what it measures and what it cannot

See also Tick volume · Participation

A bond yield less expected inflation. Gold pays no yield, so it competes with real yields rather than nominal ones.

Explained in How to trade gold CFDs: a framework for XAUUSD

See also XAUUSD

The standard deviation of an instrument's returns over a window, usually quoted as a percentage. Comparable across instruments, where ATR in price units is not.

Explained in Measuring volatility: true range, ATR and realised volatility

See also Standard deviation · Volatility · Volatility regime

Weighting recent events more heavily than their place in the record justifies — most visibly after a run of wins or losses.

Explained in Recency and availability: why the last three trades feel like the whole picture

See also Availability bias · Sample size · Variance

Price closing back on the original side of a level it had just passed through. It is the moment a sweep and a break part company: a sweep reclaims, a break does not.

Explained in Liquidity sweeps and stop runs: reading a level from the orders behind it

See also Liquidity sweep · Retest · Breakout

The scheduled review that adds and removes an index's constituents. The Nasdaq-100 reconstitutes each December and rebalances weights in March, June and September, on the third Friday.

Explained in How to trade US100 CFDs: a framework for the Nasdaq-100

See also Index concentration · US100 · Cash session

The asymmetry by which a loss requires a larger gain to reverse it: a 20% drawdown needs 25% to recover, and a 50% drawdown needs 100%.

Explained in The psychology of a drawdown

See also Drawdown · Peak-to-trough

A consolidation pattern bounded by roughly horizontal support and resistance.

Explained in Triangles, wedges and rectangles: patterns of compression

See also Range · Consolidation

A price the calendar leaves behind — the previous day's high and low, the daily or weekly open, a session's extremes — that acts as support or resistance because it is watched by many participants at once.

Explained in Session reference levels: yesterday's high and low, the daily open and the week

See also Support · Resistance · Previous day's high and low

A shift from one volatility regime to another, often abrupt and often around an event. It changes what a fixed stop, target or session range means, until they are re-expressed in volatility units.

Explained in Volatility regimes: why quiet follows quiet and storms come in clusters

See also Volatility regime · ATR stop

A long wick showing that price reached a level within the period and was pushed back before the close.

Explained in Candlestick anatomy: what one candle tells you

See also Wick · Pin bar · Hammer

How one instrument or currency has performed compared with another, or with a group, over the same window. Used to choose the instrument whose legs push the same way, not to time the entry.

Explained in Relative strength across pairs: choosing the pair by comparing its legs

See also Price relative · Currency strength · Relative Strength Index

An area where selling has previously stopped a rise. It is a zone rather than a single price.

Explained in Support and resistance explained for beginners

See also Support · Zone · Level flip

Orders waiting in or beside the book — limits at chosen prices, stops beyond their triggers — that have not yet traded. They are the liquidity a market can trade against, and they are not spread evenly.

Explained in Where liquidity rests: stops, limits and the levels that attract price

See also Liquidity · Order book · Stop order

Price returning to a level it has just broken, which either holds as the level's new role or fails and returns through it.

Explained in Breakouts and false breakouts: why most breaks fail

See also Breakout · False breakout · Level flip

An entry taken when price returns to a level it has just broken and holds on the new side. It combines a good price with evidence, and it is the entry most often not filled, because the retest does not come.

Explained in Entry triggers: close, retest or limit — and what each one costs

See also Retest · Trigger · Level flip

The proportion of a prior move that a pullback gives back, usually expressed as a percentage of it.

Explained in Pullbacks and retracements: where trend entries belong

See also Pullback · Fibonacci retracement

Entering a position mainly to recover a recent loss, rather than because the criteria were met.

Explained in Revenge trading and tilt: the loss that becomes four losses

See also Tilt · Escalation · Daily loss limit

A fixed schedule of reviews — weekly, monthly, quarterly — each with a fixed scope and a fixed limit on what it may change. Only the quarterly review may change a rule.

Explained in Review cadence and kill criteria: deciding in advance when the system stops

See also Kill criteria · Control chart · Trading plan

The section of a trading plan fixing risk per trade, maximum concurrent exposure and the conditions under which trading stops.

Explained in Writing a trading plan you will actually follow

See also Trading plan · Risk per trade · Daily loss limit

The share of account equity that a single trade is allowed to lose if the stop is hit, set before position size is calculated.

Explained in Sizing down: the one lever that fixes most psychology problems · Leverage, margin and why position sizing comes first

See also Position size · R-multiple · Risk parameters

The distance from entry to target divided by the distance from entry to stop. It sets the win rate a strategy needs in order to break even.

Explained in Risk-reward ratio: using it without fooling yourself

See also Break-even win rate · R-multiple · Win rate

A price at a whole or half figure, where orders tend to cluster for no reason other than that the number is memorable.

Explained in Support and resistance explained for beginners

See also Support · Resistance · Liquidity

The full cost of opening and closing one position — spread times pip value, plus commission both ways, plus any swap held.

Explained in Spreads, swaps and the real cost of holding a position

See also Spread · Commission · Swap

Relative Strength Index — an oscillator measuring the magnitude of recent gains against recent losses on a 0–100 scale, usually over 14 periods.

Explained in RSI explained: why overbought does not mean sell

See also Overbought · Oversold · Divergence

Whether a trade followed the written rules. Recorded per trade, it separates a strategy that is failing from a strategy that is not being run.

Explained in The trading journal: recording decisions, not just results

See also Compliance rate · Trading journal

The number of trades a conclusion rests on. Small samples produce runs that look like signal and are not.

Explained in Recency and availability: why the last three trades feel like the whole picture

See also Variance · Expectancy · Recency bias

A trade closed at or near its entry price — neither a win nor a loss in R. A break-even stop produces them from trades that would otherwise have gone on to win or lose.

Explained in Managing the open trade: partials, break-even and trailing, priced honestly

See also Break-even stop · R-multiple

Time spent watching the market. Beyond the point where setups appear, it raises the number of decisions made without improving them.

Explained in Boredom and overtrading: the cost of needing something to happen · Screen time and decision fatigue

See also Decision fatigue · Overtrading · Session length

The mirror of a buying climax: a wide, high-volume decline near the end of a fall, after which price fails to make further progress.

Explained in Volume at breakouts and climaxes: confirmation or exhaustion?

See also Buying climax · Effort versus result

The clock of the broker's trading server, which stamps every candle on a MetaTrader chart. It is not the reader's local time, and it decides where the daily and 4-hour candles begin and end.

Explained in Daily candles and server time: why your chart differs from someone else's

See also Daily close · Timeframe · Sunday candle

How long a single unbroken period at the screen lasts. It is the variable decision fatigue tracks most closely.

Explained in Screen time and decision fatigue

See also Decision fatigue · Screen time

The hour a major financial centre begins its business day — Tokyo, London or New York — and the participation that arrives with it. The trading day is structured by the three in sequence.

Explained in Session opens and the Asian range: how a trading day is structured

See also Trading session · Overlap · Asian range

The written conditions a chart must meet before a trade is taken. Written in advance, they are what a marginal setup can be measured against.

Explained in Writing a trading plan you will actually follow

See also Trading plan · Marginal setup · Checklist

A candle with a small body at the bottom of its range and a long upper wick, showing a rise within the period that was sold back before the close.

Explained in Candlestick reversal patterns that are worth knowing

See also Hammer · Pin bar · Rejection

A position that gains when the instrument's price falls and loses when it rises.

Explained in What is CFD trading? How online CFDs work, in plain English

See also Long position · CFD

A moving average of an indicator rather than of price, used to give the indicator a reference to cross.

Explained in MACD explained: momentum from two moving averages

See also MACD · %D

A moving average weighting every close in the lookback period equally.

Explained in Moving averages: the indicator everything else is built on

See also Exponential moving average · Moving average

The difference between the price an order was expected to fill at and the price it filled at. It widens where liquidity thins, notably around data releases and at the weekly open.

Explained in Weekend gaps: why Monday opens where it does · Trading the economic calendar without getting whipsawed

See also Liquidity · Gap · Economic calendar

The angle of a trendline, which records how fast the sequence of highs or lows is progressing.

Explained in How to draw trendlines and channels correctly

See also Trendline · Channel

The difference between the bid and the ask. It is the cost paid on entry, present in the quote whether or not a commission is charged separately.

Explained in What is the spread? The cost you pay before a trade can be flat · Trading the economic calendar without getting whipsawed · Forex market hours: sessions, overlaps and when spreads widen · Spreads, swaps and the real cost of holding a position

See also Commission · Round-turn cost · Point

A ceiling on the spread at which an order may be placed, written as a fraction of the stop distance so that it scales with the setup. Crossed at the rollover, in the Asian hours and around news, it turns an enter into a logged skip.

Explained in Alerts and execution rules: what the machine watches and what the trader decides

See also Execution rule · Spread · Slippage

A measure of how far values sit from their mean. Bollinger Bands place their boundaries a number of standard deviations from a moving average.

Explained in Bollinger Bands and ATR: measuring volatility, not direction

See also Bollinger Bands · ATR

The standard deviation of a statistic across repeated samples — for expectancy, the standard deviation of the trade results divided by the square root of the number of trades. It is the unit an error bar is drawn in.

Explained in Expectancy with error bars: how sure the record lets you be

See also Confidence interval · Expectancy · Sample size

An oscillator measuring where the current close sits within the high-low range of the lookback period, plotted on a 0–100 scale.

Explained in Stochastics and KDJ — and how to stop adding indicators

See also %K · %D · KDJ

Stop orders gathered just beyond an obvious level, placed by traders who used the same invalidation. When triggered they become market orders pushing the same way.

Explained in Where liquidity rests: stops, limits and the levels that attract price

See also Liquidity pool · Stop order · Swing high

The distance in pips between entry and stop. With risk per trade fixed, it is what determines position size.

Explained in Leverage, margin and why position sizing comes first · Stop losses: placement is the decision, not presence

See also Position size · Stop-loss · Invalidation

An order that rests off the book and becomes a market order when price reaches its trigger. A stop-loss is one, which is why it fills at the next available price rather than the stop price.

Explained in Market, limit and stop orders: which queue you join, and what it costs

See also Stop-loss · Market order · Slippage

The burst of movement produced when a cluster of stops triggers — each stop a market order pushing the same way. It is the middle of a sweep, and it supplies the other side to whoever is filling against it.

Explained in Liquidity sweeps and stop runs: reading a level from the orders behind it

See also Liquidity sweep · Stop cluster · Market order

An order closing a position at a specified price to cap its loss. Where it belongs is set by invalidation, not by an acceptable loss amount.

Explained in Stop losses: placement is the decision, not presence

See also Invalidation · Stop distance · Trailing stop

The automatic closure of positions when margin level falls to the broker's liquidation threshold. On InnoMP that is 30% on weekdays and 100% at the weekend.

Explained in Margin calls and stop-outs, explained before you meet one

See also Margin level · Margin call · Equity

A short daily candle produced when a server's midnight does not coincide with the Sunday 17:00 New York open, so the first hours of the week form a candle of their own before the first full day.

Explained in Daily candles and server time: why your chart differs from someone else's

See also Server time · Daily close · Gap

An area where buying has previously stopped a fall. It is a zone rather than a single price.

Explained in Support and resistance explained for beginners

See also Resistance · Zone · Level flip

The financing charged or paid for holding a position overnight, applied per night and reflecting the interest differential between the two sides of the instrument.

Explained in Spreads, swaps and the real cost of holding a position

See also Round-turn cost · Commission · Spread

A candle whose high is above the candles on either side of it.

Explained in Swing highs and lows: reading market structure

See also Swing low · Higher high · Market structure

A candle whose low is beneath the candles on either side of it.

Explained in Swing highs and lows: reading market structure

See also Swing high · Market structure

A consolidation pattern with both boundaries converging, as highs fall and lows rise toward each other.

Explained in Triangles, wedges and rectangles: patterns of compression

See also Ascending triangle · Descending triangle · Pennant

Moving a profit target further away while the trade is running, which removes the exit the position was sized around.

Explained in Greed and target creep: how winning trades become losing ones

See also Greed · Partial exit · Price target

The study of price charts to judge what is more likely to happen next. It treats the record of what participants paid as its evidence.

Explained in What is technical analysis? A beginner's guide

See also Fundamental analysis · Price action · Chart

A market with little participation, in which a small amount of trading moves price a long way. Moves made in a thin market carry less information than their size suggests and are often retraced when participation returns.

Explained in Effort versus result: when heavy volume moves price very little

See also Liquidity · Tick volume · Trading session

The number of times the price changed during a candle's period. It is what the volume bars on a forex or CFD chart show, because no central count of contracts exists for an over-the-counter market.

Explained in Tick volume in forex and CFDs: what it measures and what it cannot

See also Real volume · Participation · Liquidity

A state, borrowed from poker, in which decisions are being driven by the last result rather than by the current situation.

Explained in Revenge trading and tilt: the loss that becomes four losses

See also Revenge trading · Escalation · Daily loss limit

How much market time each candle represents. It sets what counts as signal and what counts as noise.

Explained in Trading timeframes explained: which chart should you use?

See also Higher timeframe · Noise · Multi-timeframe analysis

The higher timeframe's direction, the trading timeframe's setup and the entry timeframe's trigger all agreeing. Confluence across charts rather than within one.

Explained in Multi-timeframe confluence: what agreement between charts is worth

See also Confluence · Top-down analysis · Multi-timeframe analysis

A lower timeframe trending against the higher one. By default it is a pullback seen at higher resolution; it becomes a reversal only when the higher timeframe's own structure breaks.

Explained in When timeframes disagree: pullback, or the start of a reversal?

See also Pullback · Break of structure · Higher timeframe

Moving between timeframes until one supports a position already held. It is confirmation bias applied to chart settings.

Explained in Confirmation bias: finding the chart that agrees with you

See also Confirmation bias · Multi-timeframe analysis

Reading a market on several timeframes in a fixed order, from the highest to the lowest: the higher chart for direction, the trading chart for a setup, the lower chart for the entry. Each chart answers one question and is not asked the others.

Explained in Top-down analysis: reading three timeframes in a fixed order

See also Multi-timeframe analysis · Directional bias · Trading timeframe

The actions taken between entry and exit — partial exits, moving the stop, trailing, or nothing. Each changes the setup's average win, average loss or win rate, and each is a rule written into the setup rather than a reaction.

Explained in Managing the open trade: partials, break-even and trailing, priced honestly

See also Trailing stop · Partial exit · Break-even stop · Expectancy

A record of decisions rather than results — the criteria, the reasoning and the rule compliance for each trade, written at the time.

Explained in The trading journal: recording decisions, not just results

See also Rule compliance · Hindsight bias · Post-trade review

A written specification of what is traded and under what conditions, covering setup criteria, risk parameters and the rules for stopping.

Explained in Writing a trading plan you will actually follow

See also Setup criteria · Risk parameters · Trading rule

The study of how emotion and cognitive bias affect trading decisions — specifically the gap between what a trader planned to do and what they did.

Explained in Why trading psychology matters more than your strategy

See also Execution gap · Discipline

A repeated sequence around trading that moves decisions out of the moment of execution and into a time when there is no position open.

Explained in Building a trading routine you can run for years

See also Pre-trade routine · Post-trade review · Checklist

A condition a trader has decided to act on in advance. A rule written as an intention depends on willpower; expressed as a mechanism it does not.

Explained in Why trading rules break under pressure

See also Mechanism · Pre-commitment · Discipline

One of the three regional periods that make up the forex day — Asia, London and New York — each with its own participants and typical range.

Explained in Forex market hours: sessions, overlaps and when spreads widen

See also Overlap · Liquidity

A written specification of four things decided before a trade: the context in which it is worth looking, the trigger that turns looking into entering, the invalidation price that proves it wrong, and the target. Written so it can be taken the same way every time and tested.

Explained in Anatomy of a trading setup: context, trigger, invalidation, target

See also Setup criteria · Trigger · Invalidation · Price target

The chart a trade is planned on — where the entry zone, stop and target are decided. It sits between the higher timeframe that sets direction and the lower one that times the entry.

Explained in Top-down analysis: reading three timeframes in a fixed order

See also Higher timeframe · Timeframe · Top-down analysis

A stop that moves in the direction of an open position's profit and never against it.

Explained in Greed and target creep: how winning trades become losing ones

See also Stop-loss · Partial exit

A line connecting rising lows in an uptrend, or falling highs in a downtrend.

Explained in How to draw trendlines and channels correctly

See also Channel · Slope · Diagonal support

One observable event on the entry chart that turns a setup into a position — a close beyond a level, a break of the pullback's structure, a fill at a resting order. A feeling that a level will hold is not one.

Explained in Anatomy of a trading setup: context, trigger, invalidation, target

See also Trading setup · Confirmation entry · Break of structure

The unit precious metals are priced in, about 31.1 grams. Gold and silver contract sizes are stated in troy ounces.

Explained in How to trade silver CFDs: a framework for XAGUSD

See also Contract size · XAUUSD · XAGUSD

For one bar, the greatest of high minus low, high minus the previous close, and low minus the previous close — so a gap from the previous close counts as range. The input to ATR.

Explained in Measuring volatility: true range, ATR and realised volatility

See also ATR · Gap · Volatility

A sequence of higher highs and higher lows.

Explained in Trend or range? How to tell what a market is doing

See also Downtrend · Higher high · Market structure

An index of the dollar against a basket of six currencies — euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc — with the euro the largest weight at 57.6%. It is a read of the dollar leg on its own, separate from any one pair.

Explained in The dollar leg: why the major pairs are often one trade

See also Dollar leg · Correlation · Currency strength

A CFD tracking the Nasdaq-100 — 100 of the largest non-financial companies listed on Nasdaq, weighted by modified market capitalisation. One index point is 1 USD per lot on the standard one-contract size; the index level is several times the S&P 500's, so the same lot carries several times the dollar risk per percentage move.

Explained in How to trade US100 CFDs: a framework for the Nasdaq-100

See also US500 · Index CFD · Index concentration

A CFD tracking the S&P 500, the market-value-weighted index of large US listed companies. On InnoMP one lot is one contract, so one index point is 1 USD per lot.

Explained in How to trade US500 CFDs: a framework for the S&P 500

See also Index CFD · Cash session · Contract size

The US dollar priced in Japanese yen — how many yen one dollar buys. The pip is the second decimal (0.01), and because the quote currency is the yen, a pip's value in dollars changes with the exchange rate.

Explained in How to trade USDJPY: a framework for the yen

See also Major pair · Pip value · Carry trade

A CFD tracking West Texas Intermediate crude, priced in US dollars per barrel. The standard contract is 1,000 barrels, so a one-dollar move is 1,000 USD per lot. Its underlying is a monthly futures contract, so it is rolled on a schedule.

Explained in How to trade oil CFDs: a framework for WTI crude

See also WTI · Futures rollover · Contango

A spread that moves with market liquidity — tighter in the busiest hours, wider in thin hours and around scheduled releases. The normal case for CFD and forex pricing, as opposed to a fixed spread held constant by the broker.

Explained in What is the spread? The cost you pay before a trade can be flat

See also Spread · Liquidity · Trading session

The spread of outcomes a strategy produces around its expectancy. It is why a sound strategy has losing runs and an unsound one has winning ones.

Explained in Overconfidence: why winning streaks are dangerous · Process versus outcome: judging the part you control · Recency and availability: why the last three trades feel like the whole picture · Reading your own drawdown: normal variance or broken strategy?

See also Sample size · Expectancy · Drawdown

The size of price movement over a period, without regard to direction. Measured per bar by true range, over a window by ATR in price units, or by the standard deviation of returns as a percentage.

Explained in Measuring volatility: true range, ATR and realised volatility

See also True range · ATR · Realised volatility

The tendency of large price changes to be followed by large changes and small by small, so that volatility is persistent rather than random from bar to bar. The reason regimes exist.

Explained in Volatility regimes: why quiet follows quiet and storms come in clusters

See also Volatility regime · Volatility

A narrowing of range over successive periods. It describes a change in how much price is moving, not in which direction it will move next.

Explained in Continuation patterns: when a pause is not a reversal

See also Bollinger squeeze · Consolidation · ATR

The current level of an instrument's volatility relative to its own longer history — high, normal or low for it. Regimes persist because volatility clusters, and every rule expressed in pips was measured in one of them.

Explained in Volatility regimes: why quiet follows quiet and storms come in clusters

See also Volatility clustering · Regime change · ATR

A position size derived from a fixed money risk and a volatility-based stop distance, so that the loss at the stop is constant across regimes while the position in lots changes.

Explained in Sizing and stops by volatility: keeping risk constant when the range changes

See also ATR stop · Position sizing · Risk per trade

A rise in participation accompanying a price move, read as evidence that the move was traded rather than drifted into. A breakout with volume confirmation has participants who may defend the retest.

Explained in Volume at breakouts and climaxes: confirmation or exhaustion?

See also Breakout · Retest · Tick volume

An out-of-sample test repeated through the history: tune on one window, test on the period after it, slide both forward, and stitch the tested periods into one record that was never tuned on.

Explained in Overfitting and out-of-sample: why the best backtest is the one to distrust

See also Out-of-sample test · Overfitting

A consolidation pattern whose boundaries both slope the same way while converging.

Explained in Triangles, wedges and rectangles: patterns of compression

See also Symmetrical triangle · Consolidation

The first price of the current weekly candle — in retail forex, the Sunday 17:00 New York open. Read the way the daily open is, over the week.

Explained in Session reference levels: yesterday's high and low, the daily open and the week

See also Daily open · Reference level

The thin line above or below a candlestick body, reaching the period's high or low. It records a price that was reached and not held.

Explained in Candlestick anatomy: what one candle tells you · How to read a price chart: candlesticks explained simply

See also Body · Rejection · Pin bar

The proportion of trades that closed in profit. On its own it says nothing about profitability — it is only meaningful against the risk-reward ratio.

Explained in Risk-reward ratio: using it without fooling yourself · Reading your own drawdown: normal variance or broken strategy?

See also Risk-reward ratio · Break-even win rate · Expectancy

West Texas Intermediate — the US benchmark grade of crude oil, and the reference price for USOIL.

Explained in How to trade oil CFDs: a framework for WTI crude

See also USOIL

The symbol for silver priced in US dollars per troy ounce. The standard contract is 5,000 ounces, so a one-dollar move is 5,000 USD per lot.

Explained in How to trade silver CFDs: a framework for XAGUSD

See also XAUUSD · Gold-silver ratio · Troy ounce

The symbol for gold priced in US dollars. One standard contract is 100 troy ounces, so a $1 move in the gold price is $100 per lot.

Explained in How to trade gold CFDs: a framework for XAUUSD

See also Contract size · Real yield · Pip value

The MACD line crossing zero, which is the point at which the two moving averages behind it cross each other.

Explained in MACD explained: momentum from two moving averages

See also MACD · Golden cross

A price area rather than a single price. Support and resistance are read as zones because participation clusters over a range, not at one figure.

Explained in Support and resistance explained for beginners

See also Support · Resistance