A–Z Trading Terminology Glossary

A

Ask (Offer)

  • Short Form: Ask

  • Meaning: The price at which sellers are willing to sell an asset.

  • Used In: Forex, stocks, commodities, CFDs — always part of the bid–ask quote.

ATR – Average True Range

  • Full Form: Average True Range

  • Meaning: A volatility indicator showing how much price moves on average.

  • Used In: Technical analysis, risk management, stop-loss setting.

AUM – Assets Under Management

  • Full Form: Assets Under Management

  • Meaning: Total value of assets handled by a fund or firm.

  • Used In: Hedge funds, mutual funds, asset management.

B

Bid

  • Meaning: The price buyers are willing to pay to purchase an asset.

  • Used In: All financial markets.

BPS (Pips/Points/Ticks)

  • Full Form: Basis Points

  • Meaning: 1 bps = 0.01%.

  • Used In: Interest rates, bond markets, central bank policy.

Breakout

  • Meaning: When price moves above resistance or below support.

  • Used In: Chart patterns, technical trading strategies.

C

CFD – Contract for Difference

  • Full Form: Contract for Difference

  • Meaning: A derivative that allows traders to speculate on price changes without owning the asset.

  • Used In: Forex, indices, metals, crypto, commodities.

CPI – Consumer Price Index

  • Full Form: Consumer Price Index

  • Meaning: Inflation indicator; affects interest rates and currencies.

  • Used In: Macro trading, forex, bond market analysis.

Candlestick

  • Meaning: Price chart style showing open, high, low, close (OHLC).

  • Used In: Technical analysis.

D

DD – Drawdown

  • Full Form: Drawdown

  • Meaning: Decline from the peak of account equity.

  • Used In: Risk management, prop firms.

DXY – US Dollar Index

  • Full Form: Dollar Index

  • Meaning: Measures USD strength against major currencies.

  • Used In: Forex trading, macro analysis.

Derivatives

  • Meaning: Financial products whose value is based on another asset.

  • Used In: Futures, options, swaps, CFDs.

E

ECN – Electronic Communication Network

  • Full Form: Electronic Communication Network

  • Meaning: A broker model providing direct access to interbank pricing.

  • Used In: Forex trading.

EMA – Exponential Moving Average

  • Meaning: A type of moving average giving more weight to recent prices.

  • Used In: Trend trading, indicators.

Execution

  • Meaning: The process of completing a buy or sell order.

  • Used In: All markets.

F

FOMC – Federal Open Market Committee

  • Meaning: The US Federal Reserve decision-making body.

  • Used In: Forex, indices, gold, macro trading.

FTD – First Trading Day

  • Meaning: The first day of actual trading after setup or approval.

  • Used In: Broker accounts, prop firms.

Futures

  • Meaning: Exchange-traded contracts to buy/sell an asset at a future date.

  • Used In: Commodities, indices, metals, bonds.

G

GDP – Gross Domestic Product

  • Meaning: The total value of goods/services produced in a country.

  • Used In: Economic analysis, forex, stock market.

Gap

  • Meaning: Price opens above/below previous close without trading in between.

  • Used In: Stocks, indices, futures.

H

HFT – High Frequency Trading

  • Full Form: High Frequency Trading

  • Meaning: Algorithmic trading with extremely fast order execution.

  • Used In: Institutional trading.

Hedge

  • Meaning: A position that reduces risk in another position.

  • Used In: Futures, options, forex.

I

IB – Introducing Broker

  • Meaning: A broker affiliate that brings clients to a brokerage.

  • Used In: Forex, commodities, futures.

ICT – Inner Circle Trader Concepts

  • Meaning: A popular institutional trading methodology.

  • Used In: Forex, prop-firm traders.

J

JPY Pairs

  • Meaning: Currency pairs involving the Japanese Yen.

  • Used In: Forex trading (known for volatility).

K

KYC – Know Your Customer

  • Meaning: Identity verification required during account opening.

  • Used In: Brokers, exchanges, prop firms.

L

Leverage

  • Meaning: Borrowed capital allowing larger positions.

  • Used In: Forex, CFDs, futures.

Liquidity

  • Meaning: How easily an asset can be bought or sold.

  • Used In: All financial markets.

M

MOM – Momentum Indicator

  • Full Form: Momentum

  • Meaning: Measures speed of price movement.

  • Used In: Technical analysis.

MT4 / MT5 – MetaTrader 4 / 5

  • Meaning: Popular trading platforms.

  • Used In: Forex, CFDs.

Market Order

  • Meaning: An instant buy/sell at the current market price.

  • Used In: All markets.

N

NFP – Nonfarm Payrolls

  • Full Form: Nonfarm Payrolls

  • Meaning: US jobs data causing strong volatility.

  • Used In: Forex (USD), gold, indices.

Nasdaq (NDX, NAS100)

  • Meaning: Index of US tech stocks.

  • Used In: Index, equity, CFD trading.

O

OHLC – Open, High, Low, Close

  • Meaning: Four prices that describe a candlestick.

  • Used In: Chart analysis.

OTC – Over-The-Counter

  • Meaning: Trading directly between parties without an exchange.

  • Used In: Forex, crypto, some derivatives.

P

Pip – Price Interest Point

  • Meaning: Smallest price unit in forex (0.0001).

  • Used In: Forex trading.

PnL – Profit and Loss

  • Full Form: Profit and Loss

  • Meaning: Total gain or loss from trading.

  • Used In: All markets.

Prop Firm – Proprietary Trading Firm

  • Meaning: A firm that funds traders using the firm’s capital.

  • Used In: Forex, CFDs, futures.

Q

QE – Quantitative Easing

  • Meaning: Central bank asset purchasing to stimulate economy.

  • Used In: Forex, bonds, stock markets.

R

R:R – Risk-to-Reward Ratio

  • Meaning: Ratio of potential loss to potential gain.

  • Used In: Trade planning, risk management.

RSI – Relative Strength Index

  • Meaning: Indicator measuring momentum and overbought/oversold levels.

  • Used In: Technical analysis.

S

SL – Stop Loss

  • Full Form: Stop Loss

  • Meaning: A risk-control order to automatically close losing trades.

  • Used In: All trading platforms.

Swap (Rollover Fee)

  • Meaning: Overnight interest paid/received for holding positions.

  • Used In: Forex, CFDs.

Spread

  • Meaning: Difference between bid and ask price.

  • Used In: All financial markets.

T

TP – Take Profit

  • Short Form: TP

  • Meaning: A target price where the trade will close in profit.

  • Used In: Forex, CFD, crypto, futures.

Trend

  • Meaning: General direction of market: uptrend, downtrend, sideways.

  • Used In: Technical and swing trading.

Tick

  • Meaning: Smallest price movement in futures and some CFDs.

  • Used In: Futures trading.

U

USD Pairs (Majors)

  • Meaning: Currency pairs with the US Dollar (EURUSD, GBPUSD, etc.).

  • Used In: Forex.

V

VWAP – Volume Weighted Average Price

  • Full Form: Volume Weighted Average Price

  • Meaning: Shows average price based on volume.

  • Used In: Stocks, futures, intraday trading.

Volatility

  • Meaning: Degree of price fluctuation.

  • Used In: All markets; key for risk and position sizing.

W

WTI – West Texas Intermediate

  • Meaning: Benchmark for crude oil prices.

  • Used In: Commodities, futures, CFDs.

Whipsaw

  • Meaning: Price moves sharply in one direction and immediately reverses.

  • Used In: Trend-following and breakout strategies.

X

XAUUSD

  • Meaning: Gold priced in US Dollars.

  • Used In: Forex, metals, commodities.

Y

YOY – Year Over Year

  • Meaning: Annual percentage comparison for economic data.

  • Used In: GDP, inflation, revenue analysis.

Z

Zero-Lag Indicators

  • Meaning: Indicators designed to reduce signal delay.

  • Used In: Algorithmic and technical trading.