Important Terms
Forex
Short for "Foreign Exchange," the forex market where currencies are bought and sold.
Funding Fund
Also known as a Prop firm, it is a financial company that provides capital to traders for trading. Traders use this capital to execute trades, and the profits are shared between the trader and the company.
Trading Platform - Broker
These are financial institutions or individuals that help investors participate in the forex market by providing the necessary platforms and services.
Currency Pair
A pair of currencies used for trading, such as EUR/USD, GBP/JPY.
MT4 - MetaTrader 4 and MT5 - MetaTrader 5
Popular trading platforms used for forex trading, providing tools and technical indicators to assist in trading.
cTrader
A trading platform alternative to MT4/MT5, offering advanced trading features.
Account - Trading Account
An account opened by a broker to conduct currency trading transactions.
Demo Account
An account used for practice and learning, with no financial risk as it does not use real money.
Real Account
An account that uses real money to conduct transactions in the forex market.
Investor Password and Master Password
Passwords for accessing the account, with Investor Password allowing only viewing and copying trades, while Master Password allows trading.
Margin - Margin Trading
The amount of money required to open and maintain a trading position.
Leverage
The ability to trade beyond the available funds in an account, increasing both potential profit and risk.
Commission
The fee charged by the broker when you open or close a trade.
Swap
The interest exchange between currencies in a pair for an overnight position.
Take Profit - TP and Stop Loss - SL
Pre-set price levels to automatically close a trading position when the price reaches the desired profit level or maximum acceptable loss.
Entry
The point at which you enter the market to open a trading position.
Bid and Ask
The prices at which you can buy (bid) or sell (ask) a currency pair.
Spread
The difference between the bid and ask prices of a currency pair.
Pip / Point
The smallest unit of price movement in forex.
Lot
The unit of measurement for the size of a forex trade.
Long / Buy and Short / Sell
The two basic actions in forex trading: buying (Long/Buy) and selling (Short/Sell) a currency pair.
Buy Limit, Sell Limit, Buy Stop, Sell Stop
Types of orders to open a buy or sell position at a specified price level.
Equity
The total current value of the trading account, including profits and losses.
Free Margin
The amount of money remaining in the account after using Margin to open trading positions.
Margin Call
A warning from the broker when your Equity falls close to the required Margin level, requiring you to reduce positions or deposit more money into the account.
Drawdown
The reduction in Equity from the highest to the lowest point.
Liquidity
The ability to buy or sell an asset without affecting its price.
Volatility
The price fluctuation of an asset over a specific period.
Hedging
A risk protection strategy by opening two opposing positions on the same currency pair.
Slippage
The difference between the requested price and the actual price when you place an order.
Algorithmic Trading
Automated trading based on computer algorithms.
Risk Management
Managing risk to minimize potential losses in trading.
Technical Analysis
Analyzing price trends using technical indicators.
Fundamental Analysis
Evaluating the true value of an asset based on economic and financial factors.
Leverage Ratio
The ratio of borrowed funds to equity in trading.
Margin Requirement
The minimum amount of money required in the account to open a trading position.
Market Order
An order to buy or sell immediately at the current market price.
Limit Order
An order to buy or sell at a specified price level.
Stop Order
An order to buy or sell when the price reaches a specified stop loss or take profit level.
Over-the-Counter (OTC)
The forex market, without a centralized exchange, where transactions occur directly between parties.
Central Bank
The national central bank, managing monetary policy and controlling the country’s money supply.
Accumulation/Distribution Indicator
A technical analysis tool to measure the accumulation or distribution of an asset.
Bollinger Bands
A technical analysis tool to measure price volatility and identify overbought or oversold conditions.
Moving Average (MA)
A technical analysis indicator showing the average price of an asset over a specific period.
Relative Strength Index (RSI)
A momentum oscillator to identify overbought or oversold conditions in an asset.
Fibonacci Retracement
A technical analysis tool using Fibonacci levels to predict potential price retracement levels.
Support and Resistance
Price levels where an asset tends to stop falling (support) or stop rising (resistance).
Pivot Points
Technical indicators used to identify potential price reversal points.
Trend Line
A line drawn on a chart to indicate the direction of a market trend.
Trading Signal
An indication to enter or exit a trade based on technical or fundamental analysis.
Market Analysis
The process of analyzing market trends and price movements to make informed trading decisions.
Backtesting
Testing a trading strategy using historical data to evaluate its effectiveness.
Risk-to-Reward Ratio
The ratio of potential profit to potential loss in a trade.
Trading Strategy
A plan outlining how to approach trading based on specific rules and criteria.
High Frequency Trading (HFT)
A type of trading using algorithms to execute a large number of orders at very high speeds.
Day Trading
Buying and selling assets within the same trading day.
Swing Trading
A trading style aiming to capture short to medium-term price movements.
Scalping
A trading style focused on making small profits from frequent trades.
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