Trading Glossary

Smallest common price step in many forex pairs and the basis for pip value calculations.

Standardized trade size in forex; position size connects lot size, pip value, account risk and stop distance.

Difference between bid and ask price. Wider spreads increase effective trading cost.

Capital reserved by the broker to open and maintain a leveraged position.

Multiplier that increases market exposure relative to capital and also increases risk.

Decline from an account high to a later low; a core risk metric for trading systems.

Relationship between planned loss and planned gain, often expressed as R multiple.

Degree of price movement. Higher volatility usually requires wider stops or smaller size.

How easily a market can absorb orders without large price jumps.

Difference between expected execution price and actual execution price.

Predefined exit level intended to limit loss when the trade idea is invalidated.

Predefined exit level where a planned profit is realized.

Market time window such as London or New York, often linked to different liquidity conditions.

Relationship between markets or pairs that can amplify hidden portfolio risk.

Price zones where supply, demand or prior positioning may influence market reaction.

Directional market structure that can be upward, downward or sideways depending on timeframe.

Move beyond a defined range or level, ideally supported by volume or market context.

Amount of account equity intentionally put at risk on one trade idea.

Order type that executes immediately at available market prices, with possible slippage.

Order type that requests execution at a defined price or better.