The words behind every trade.
Look up any term you meet on a chart, an order ticket or an economic calendar, explained in plain language with no assumed knowledge.
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
A
16 terms
Account Balance
The total amount of money in a trading account, not including the unrealized profit or loss from any currently open positions.
Account Equity
The current value of a trading account, calculated as the account balance plus or minus the unrealized profit or loss from any open positions.
Algorithmic Trading
The use of a computer program to open, manage and close trades automatically based on a predefined set of rules, without requiring manual intervention for each trade.
All or None (AON)
An order instruction specifying that a trade must be filled in its entirety or not at all, rather than being partially executed.
Appreciation
An increase in the value of one currency relative to another, meaning it now buys more of the other currency than it did before.
Arbitrage
The practice of simultaneously buying and selling the same or an equivalent asset in different markets to profit from a temporary difference in price between them.
Asian Session
The trading session that opens with the Tokyo markets, typically associated with comparatively lower volatility for many major currency pairs than the London or New York sessions.
Ask Price
The price at which the market or a broker is willing to sell a currency pair or instrument; a trader buys at the ask price.
Asset
Anything of economic value that can be owned or traded, such as a currency, a commodity, a share, or an index.
Asset Class
A group of financial instruments that share similar characteristics and tend to behave similarly in the market, such as currencies, commodities, or equities.
At Best Order
An instruction to execute a trade immediately at the best price currently available in the market, rather than at a specific requested price.
ATR (Average True Range)
A technical indicator that measures the average size of an instrument's price movement over a chosen period, used to gauge volatility rather than direction.
Authorised Dealer
A financial institution or broker that has been granted a licence by a financial regulator to deal in a specific type of financial instrument - Pairmetric Trading Ltd, for example, holds an Investment Dealer licence from the FSC of Mauritius.
Automated Trading System
Software, such as an Expert Advisor (EA) on MetaTrader 5, that opens and manages trades automatically according to a predefined strategy.
Available Margin
The portion of a trading account's equity that is not currently committed to margin requirements and remains free to open new positions.
Averaging Down
A strategy of adding to an existing losing position at a lower price in order to reduce the average entry price of the overall position.
B
10 terms
Balance of Trade
The difference between the total value of a country's exports and its imports of goods over a given period; a sustained trade surplus or deficit can influence the strength of that country's currency over time.
Bank Rate
The interest rate a central bank charges commercial banks for short-term loans, used as a tool of monetary policy and a key driver of currency strength.
Base Currency
The first currency listed in a currency pair, representing the currency being bought or sold in a forex trade; in EUR/USD, the euro is the base currency.
Basis Point (BPS)
One hundredth of one percentage point (0.01%), commonly used to describe small changes in interest rates or bond yields.
Bear Market
A market condition in which prices are falling or expected to fall over a sustained period, reflecting widespread pessimism among traders and investors.
Bid Price
The price at which the market or a broker is willing to buy a currency pair or instrument; a trader sells at the bid price.
Broker
A company, such as Pairmetric, that gives traders access to financial markets and executes buy and sell orders on their behalf through a trading platform.
Bull Market
A market condition in which prices are rising or expected to rise over a sustained period, reflecting widespread optimism among traders and investors.
Buy Limit Order
A pending order to buy a currency pair or instrument once its price falls to a specified level below the current market price.
Buy Stop Order
A pending order to buy a currency pair or instrument once its price rises to a specified level above the current market price.
C
12 terms
Candlestick Chart
A price chart that displays the open, high, low and close for each time period as a distinct candle, widely used in technical analysis to read market sentiment at a glance.
Carry Trade
A trading strategy that involves borrowing or selling a currency with a low interest rate to buy a currency with a higher interest rate, aiming to profit from the interest rate differential.
Central Bank
A national institution, such as the Federal Reserve or the European Central Bank, responsible for setting monetary policy and interest rates that shape currency values.
CFD (Contract for Difference)
A derivative product that lets a trader speculate on the price movement of an underlying asset, such as a currency pair, index or commodity, without owning the asset itself.
Commission
A fee charged by a broker for executing a trade, typically applied on raw or zero-spread trading accounts instead of, or alongside, a spread markup.
Commodity
A raw material or primary agricultural product, such as gold, oil or silver, that can be traded on financial markets, often through CFD trading.
Contract Size
The standardized quantity of an underlying asset represented by one lot in a trade, such as 100,000 units of the base currency for one standard lot in forex trading.
Correlation
A statistical measure of how closely two instruments move in relation to one another, used to understand risk exposure across a portfolio of open positions.
Counterparty
The other party involved in a financial transaction, such as the liquidity provider or broker on the other side of a trader's position.
Cross Currency Pair
A currency pair that does not include the US dollar, such as EUR/GBP or GBP/JPY, priced through the relationship between each currency and the dollar.
Currency Pair
Two currencies quoted against each other in forex trading, such as EUR/USD, showing how much of the quote currency is needed to buy one unit of the base currency.
Currency Peg
A policy under which a country fixes its currency's exchange rate to another currency, such as the US dollar, to maintain stability.
D
8 terms
Day Order
An order that remains active only for the trading day on which it was placed and is automatically cancelled if not filled by the end of that session.
Day Trading
A trading style that involves opening and closing positions within the same trading day, avoiding the risk of holding a position overnight.
Demo Account
A trading account funded with virtual money, allowing a trader to practice trading strategies on live market prices without risking real capital.
Depreciation
A decrease in the value of one currency relative to another, meaning it now buys less of the other currency than it did before.
Derivative
A financial instrument, such as a CFD or futures contract, whose value is based on the price of an underlying asset rather than the asset itself.
Divergence
A situation where price and a technical indicator, such as RSI or MACD, move in opposite directions, often watched as a sign that current momentum may be fading.
Dovish
Describes a central bank or policymaker favoring lower interest rates or looser monetary policy to support economic growth, typically seen as weighing on a currency.
Drawdown
The decline in a trading account's value from a previous peak, expressed as a percentage, used to measure risk and the effectiveness of a trading strategy.
E
8 terms
ECN (Electronic Communication Network)
A trading system that connects a broker's clients directly with liquidity providers and other market participants, typically offering tighter spreads with a separate commission.
Economic Calendar
A schedule of upcoming economic data releases and events, such as interest rate decisions and inflation reports, that traders use to anticipate market volatility.
Economic Indicator
A piece of economic data, such as GDP, unemployment or inflation, used to gauge the health and direction of an economy and its currency.
Equity
As an asset class, shares representing ownership in a company, traded on stock exchanges and often used as the underlying asset for CFD trading on individual shares or stock indices; in the context of a trading account, see Account Equity.
Execution
The process of completing a buy or sell order in the market, including the speed and price at which a trade is actually filled.
Exotic Currency Pair
A currency pair that combines a major currency with the currency of a smaller or emerging economy, typically less liquid and more volatile than major pairs.
Expert Advisor (EA)
An automated trading program built for the MetaTrader platform that can analyze markets and execute trades according to a predefined strategy.
Exposure
The total amount of capital a trader has at risk across all open positions in the market at a given time.
F
7 terms
Fibonacci Retracement
A technical analysis tool that plots horizontal lines at key percentages of a prior price move, used to anticipate where a pullback might find support or resistance.
Fill or Kill (FOK)
An order instruction requiring that a trade be executed immediately and in full, or cancelled entirely if it cannot be filled at once.
Fixed Spread
A spread that remains constant regardless of market conditions, offering predictable trading costs even during periods of high volatility.
Floating Spread
A spread that widens or narrows depending on market liquidity and volatility, common on raw or ECN-style trading accounts.
Forex (FX)
Short for foreign exchange, the global market in which currencies are bought and sold, and the largest and most liquid financial market in the world.
Fundamental Analysis
A method of evaluating a currency or asset by examining economic data, central bank policy and geopolitical events rather than price charts alone.
Futures Contract
A standardized agreement to buy or sell an asset at a predetermined price on a specified future date, commonly used for trading commodities and indices.
G
4 terms
GDP (Gross Domestic Product)
The total value of goods and services produced within a country over a given period, one of the most widely watched measures of economic health.
Going Long
Opening a buy position on a currency pair or instrument in anticipation that its price will rise.
Going Short
Opening a sell position on a currency pair or instrument in anticipation that its price will fall.
Good Till Cancelled (GTC) Order
A pending order that remains active in the market until it is either filled or manually cancelled by the trader, rather than expiring at the end of the trading day.
H
3 terms
Hawkish
Describes a central bank or policymaker favoring higher interest rates or tighter monetary policy to control inflation, typically seen as supportive of a currency.
Hedging
A risk management strategy that involves opening a position to offset potential losses on an existing position in a related market.
High-Frequency Trading (HFT)
A form of algorithmic trading that uses powerful computers to execute a very large number of orders at extremely high speed.
I
6 terms
Index
A measure of the combined performance of a group of stocks, such as the US SP 500 or Germany 40, often used as a barometer for a broader market or economy.
Inflation
The rate at which the general level of prices for goods and services rises over time, closely watched by central banks when setting interest rates.
Interbank Market
The network of banks that trade currencies directly with one another at wholesale rates, forming the foundation of the global forex market.
Interest Rate
The cost of borrowing money, or the return on savings, set by a central bank and one of the most significant drivers of currency value.
Introducing Broker (IB)
A person or company that refers clients to a broker in exchange for a commission or rebate, without handling the clients' funds directly.
Islamic Account (Swap-Free Account)
A trading account structured without overnight swap charges or credits, allowing clients to hold positions in line with Islamic finance principles.
J
1 terms
J-Curve Effect
The pattern in which a country's trade balance initially worsens after its currency depreciates, before eventually improving as import and export volumes adjust.
K
2 terms
Kiwi
Trader shorthand for the New Zealand dollar (NZD), and by extension the NZD/USD currency pair.
Know Your Customer (KYC)
The identity verification process a regulated broker is required to carry out on new clients before they can open a trading account, as part of anti-money laundering compliance.
L
8 terms
Leverage
A facility that allows a trader to control a larger position in the market than the capital they have deposited, amplifying both potential profits and potential losses.
Limit Order
An order to buy or sell a currency pair or instrument at a specific price or better, only executed once the market reaches that level.
Liquidity
A measure of how easily an asset can be bought or sold in the market without significantly affecting its price; major currency pairs are among the most liquid instruments in the world.
Liquidity Provider
A bank or financial institution that supplies the buy and sell prices a broker uses to fill client orders in the forex and CFD markets.
London Session
The trading session that opens with the London markets, widely considered the most liquid and active period for major currency pairs due to the size of European trading volume.
Long Position
A trading position that profits when the price of a currency pair or instrument rises, opened by buying the asset.
Lot
A standardized unit used to measure the size of a trade in forex trading, with one standard lot typically equal to 100,000 units of the base currency.
Lot Size
The number of units of the base currency, or contracts, covered by a single trade, directly affecting the pip value and the level of risk taken.
M
12 terms
Major Currency Pair
A currency pair that includes the US dollar paired with one of the world's most heavily traded currencies, such as EUR/USD or GBP/USD, typically offering the tightest spreads and highest liquidity.
Margin
The amount of money required in a trading account to open and maintain a leveraged position, held by the broker as collateral.
Margin Call
A notification from a broker that a trading account's equity has fallen close to the required margin level, requiring the trader to deposit more funds or reduce open positions.
Margin Level
A percentage that shows the ratio of a trading account's equity to its used margin, used by brokers to monitor how much risk an account is carrying.
Market Maker
A broker or firm that sets its own bid and ask prices and takes the other side of a client's trade, rather than routing the order directly to external liquidity providers.
Market Order
An order to buy or sell a currency pair or instrument immediately at the best available current price.
MetaTrader 5 (MT5)
A widely used multi-asset trading platform that offers advanced charting, automated trading through Expert Advisors, and access to forex, indices, commodities and more.
Micro Lot
A trade size equal to 1,000 units of the base currency, or one-hundredth of a standard lot, often used by beginners to trade with smaller position sizes and lower risk.
Mini Lot
A trade size equal to 10,000 units of the base currency, or one-tenth of a standard lot, commonly used to scale position size between a micro lot and a full standard lot.
Momentum
The speed and strength of a price movement in a given direction, often measured using technical indicators such as RSI or MACD.
Monetary Policy
The actions a central bank takes to manage interest rates and the money supply in order to control inflation and support economic growth.
Moving Average
A technical indicator that smooths out price data over a chosen period, making the underlying trend easier to identify on a price chart.
N
7 terms
NDD (No Dealing Desk)
A broker execution model that routes client orders directly to liquidity providers rather than through an internal dealing desk.
Negative Balance Protection
A safeguard offered by a regulated broker that ensures a client's trading account balance cannot fall below zero, even during extreme market volatility.
Net Position
The overall exposure a trader holds in a particular currency pair or instrument after combining all open long and short positions.
New York Session
The trading session that opens with US markets, overlapping with the tail end of the London session to create the most liquid trading window of the day.
News Trading
A trading strategy that involves opening positions around scheduled high-impact news releases in order to capitalize on the resulting volatility.
Non-Farm Payrolls (NFP)
A monthly US economic report measuring the change in employment across most sectors of the economy, widely regarded as one of the most market-moving data releases.
Notional Value
The total value of a leveraged position in the underlying market, calculated by multiplying the contract size by the current market price.
O
5 terms
Open Position
A trade that has been executed and remains active in the market, showing an unrealized profit or loss until it is closed.
Order Execution
The process by which a broker fills a client's buy or sell order in the market, including the price and speed at which it is completed.
OTC (Over-the-Counter)
A market structure in which trading takes place directly between two parties rather than on a centralized exchange, as is the case with most forex and CFD trading.
Overnight Position
A trading position that remains open past the end of the trading day, potentially subject to a swap charge or credit.
Overtrading
Opening an excessive number of trades or position sizes relative to account equity, often driven by emotion rather than a defined trading strategy.
P
10 terms
Pending Order
An instruction to open a trade automatically once the market reaches a specified price, such as a buy limit or sell stop order.
Pip
The smallest standardized price movement a currency pair can make - typically the fourth decimal place for most forex pairs, or the second decimal place for pairs involving the Japanese yen - used to measure gains and losses on a trade.
Pip Value
The monetary value of a one-pip movement in a currency pair, which depends on the lot size traded and the currency pair itself.
Pipette
A fractional pip equal to one-tenth of a standard pip, used by brokers that quote currency pairs to an extra decimal place for greater pricing precision.
Pivot Point
A technical analysis level calculated from the previous period's high, low and close, used to identify potential support and resistance levels for the current session.
PMI (Purchasing Managers' Index)
A survey-based economic indicator that measures business conditions in the manufacturing and services sectors, often used as an early signal of economic direction.
Position
A trade that a trader currently holds in the market, either long (buy) or short (sell).
Position Sizing
The process of determining how many lots or units to trade based on account equity and risk tolerance, a core part of risk management.
Profit and Loss (P&L)
The financial outcome of a trade or a trading account over a given period, reflecting realized and unrealized gains or losses.
Pullback
A temporary reversal in price within a broader trend, often viewed by traders as a potential opportunity to enter in the direction of that trend.
Q
3 terms
Quantitative Easing (QE)
A monetary policy tool used by central banks to inject money into the economy by purchasing financial assets, typically aimed at lowering interest rates and stimulating economic growth.
Quote
The current bid and ask price of a currency pair or instrument displayed on a trading platform.
Quote Currency
The second currency listed in a currency pair, showing how much of it is needed to buy one unit of the base currency; in EUR/USD, the US dollar is the quote currency.
R
8 terms
Rally
A sustained rise in the price of a currency pair or instrument over a period of time.
Realized Profit/Loss
The actual gain or loss recorded once a trading position has been closed, as opposed to the unrealized profit or loss of an open position.
Requote
A situation in which a broker is unable to execute a trade at the requested price and offers a new price instead, typically during periods of fast-moving markets or low liquidity.
Resistance Level
A price level at which an instrument has previously struggled to rise above, often due to selling interest, and where a reversal or pause is sometimes expected.
Retracement
A temporary move against the prevailing trend before that trend resumes, commonly analyzed using tools such as Fibonacci retracement levels.
Risk Management
The set of strategies and tools, such as stop loss orders and position sizing, used to control potential losses when trading financial markets.
Risk-Reward Ratio
A comparison between the potential loss and the potential profit of a trade, used to evaluate whether a trade setup is worth taking.
Rollover
The process of extending the settlement date of an open position overnight, which may result in a swap charge or credit being applied to the trading account.
S
13 terms
Scalping
A short-term trading strategy that involves opening and closing multiple trades within minutes or seconds to capture small price movements.
Sell Limit Order
A pending order to sell a currency pair or instrument once its price rises to a specified level above the current market price.
Sell Stop Order
A pending order to sell a currency pair or instrument once its price falls to a specified level below the current market price.
Short Position
A trading position that profits when the price of a currency pair or instrument falls, opened by selling the asset first.
Slippage
The difference between the expected price of a trade and the price at which it is actually executed, more common during periods of high volatility or low liquidity.
Spot Price
The current market price at which a currency pair or instrument can be bought or sold for immediate settlement.
Spread
The difference between the bid price and the ask price of a currency pair or instrument, representing a key part of the cost of trading.
Stop Loss Order
An order attached to a position that automatically closes it once the price reaches a specified level, used to limit potential losses.
Stop Out Level
The margin level at which a broker will automatically begin closing a trader's open positions to prevent the account balance from falling below zero.
STP (Straight Through Processing)
A broker execution model that passes client orders directly to liquidity providers electronically, without manual intervention or a dealing desk.
Support Level
A price level at which an instrument has previously found buying interest, often watched as a point where a decline may pause or reverse.
Swap
The interest charged or credited for holding a leveraged position open overnight, based on the interest rate differential between the two currencies in the pair.
Swing Trading
A trading style that aims to capture gains over several days to a few weeks by holding positions through short-term price swings.
T
6 terms
Take Profit Order
An order attached to a position that automatically closes it once the price reaches a specified target level, used to lock in profits.
Technical Analysis
A method of evaluating a currency pair or instrument by studying historical price charts, patterns and indicators rather than economic fundamentals.
Tick
The smallest possible price change an instrument can make, which can be smaller than a pip on certain trading platforms and instruments.
Trailing Stop
A type of stop loss order that automatically moves with the market price by a set distance, helping to lock in profit as a trade moves favorably.
Trend
The general direction in which the price of a currency pair or instrument is moving over a given period - upward, downward, or sideways.
Trend Line
A straight line drawn across a series of price highs or lows on a chart, used in technical analysis to visualize the direction of a trend.
U
3 terms
Underlying Asset
The actual currency, commodity, index or share on which the price of a CFD or other derivative is based.
Unrealized Profit/Loss
The current paper gain or loss on an open position, which becomes realized only once the position is closed.
US Dollar Index (DXY)
An index that measures the value of the US dollar relative to a basket of major world currencies, widely used as a broad gauge of dollar strength.
V
3 terms
Value Date
The date on which a currency trade is settled, typically two business days after the trade is executed in the spot forex market.
Volatility
The degree and speed at which the price of a currency pair or instrument moves over a given period, often used as a measure of market risk.
Volume
The total amount of a currency pair or instrument traded over a given period, used by traders to gauge the strength of a price move.
W
3 terms
Whipsaw
A volatile price movement in which an instrument moves sharply in one direction before quickly reversing, often resulting in losses for traders caught on the wrong side.
Wire Transfer
A method of electronically transferring funds between bank accounts, commonly used for depositing to or withdrawing from a trading account.
Working Order
A pending order that has been placed but not yet triggered because the market has not reached the specified price level.
X
1 terms
XAU/XAG
The ISO ticker symbols used to represent gold (XAU) and silver (XAG) when traded against a currency such as the US dollar, as in XAU/USD.
Y
3 terms
Year-over-Year (YoY)
A method of comparing an economic data point, such as inflation or GDP growth, to the same period one year earlier in order to smooth out seasonal fluctuations.
Yen (JPY)
The currency of Japan and one of the most actively traded currencies in the forex market, commonly used in carry trade strategies due to historically low Japanese interest rates.
Yield
The income return on an investment, such as a government bond, often expressed as a percentage and closely watched for its effect on currency values.
Z
2 terms
Zero Spread Account
A trading account type that offers spreads starting from zero on major currency pairs, with the broker's cost typically charged instead as a fixed commission per trade.
Zero-Sum Game
A situation in which one trader's profit is directly offset by another party's equivalent loss, a characteristic often used to describe CFD and derivatives trading.
Terms are the start. Context is the rest.
About the Pairmetric Glossary
The Pairmetric glossary explains the terms you meet on a trading chart, an order ticket or an economic calendar, from single-word desk shorthand to full technical definitions. Terms are grouped alphabetically, with a search bar and popular-term shortcuts to help you find a definition quickly.
These definitions describe general trading and financial-market terminology and are provided for educational purposes. Pairmetric Trading Ltd is authorised and regulated by the Financial Services Commission (FSC) of Mauritius (Licence Number GB26206074); for the specific trading conditions - spreads, swap rates or margin requirements - that apply to your account, see the relevant Trading pages rather than this glossary.
These definitions describe general trading and financial-market terminology and are provided for educational purposes. Pairmetric Trading Ltd is authorised and regulated by the Financial Services Commission (FSC) of Mauritius (Licence Number GB26206074); for the specific trading conditions - spreads, swap rates or margin requirements - that apply to your account, see the relevant Trading pages rather than this glossary.
Glossary FAQs
Terms are grouped alphabetically. Use the A-Z navigation to jump to a letter, or use the search bar to look up a specific term directly.
The glossary is being built out letter by letter, and new terms are added regularly, so check back as more letters are completed.
Yes - type any word into the search bar, such as 'margin call' or 'pip', to jump straight to its definition.
No - the glossary explains general trading and financial-market terminology. For the specific spreads, swap rates or margin requirements on your account, see the relevant Trading pages.
Visit the Trading Courses and Trading Lessons pages to see these concepts explained step by step within a structured curriculum.
If you have more questions visit
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