Pip
The smallest standard price move in a currency pair — usually 0.0001 (or 0.01 for JPY pairs).
Academy reference
Trading Glossary
Every term used across the six Academy modules, defined in plain English. Terms inside the lessons link straight to their entry here.
Basics
Liquidity
How easily an asset can be bought or sold without significantly affecting its price. EUR/USD is highly liquid — tight spreads, instant fills, little slippage; exotic pairs and low-volume crypto are not.
Volatility
How much and how quickly price moves over a given period. Gold and GBP/JPY are high-volatility; it drives stop distance, position size and risk, and spikes around high-impact news.
Bull / Bear
Bull markets rise, bear markets fall. A bullish trader expects prices to go up, a bearish trader expects them to fall.
Bid / Ask
The bid is the price you can sell at, the ask is the price you can buy at. The gap between them is the spread — you enter every trade slightly in the red by that amount.
Timeframe
The period each candle represents — 5m, 1H, 4H, daily. Higher timeframes are slower but more reliable; lower timeframes give precision and more noise.
Demo account
A free practice account using live market prices and virtual money. The place to test a plan for 50 trades before risking anything real.
CFD
Contract for difference — a leveraged product that tracks an asset's price so you can go long or short without owning it.
NFP (Non-Farm Payrolls)
The monthly US employment report, released the first Friday of each month. One of the highest-impact scheduled events for USD pairs, gold and indices — expect a sharp spike and wider spreads at the release.
CPI (inflation)
The Consumer Price Index, the headline measure of inflation. It shapes expectations for central bank interest-rate decisions, which is why a surprise reading moves currencies hard.
Interest rate decision
A central bank's scheduled announcement of its policy rate. Higher rates tend to attract capital and support a currency; the market reacts to the surprise versus expectations, not to the number itself.
Economic calendar
A schedule of upcoming data releases with an impact rating (high, medium or low), the previous value, the forecast and the actual result once published.
Costs & Leverage
Spread
The difference between the bid and ask price. Lower spreads mean lower trading costs.
Leverage
Borrowed capital that lets you control a larger position with a small deposit. E.g. 1:100 leverage.
Lot Size
A standardized contract size. 1 standard lot = 100,000 units of the base currency.
Margin
The deposit required to open a leveraged trade — a fraction of the total position size.
Swap (rollover)
The interest charged or paid for holding a position overnight, based on the rate difference between the two currencies.
Commission
A flat fee per lot charged by some account types, usually paired with a much tighter raw spread.
Equity
Your balance plus or minus the floating profit and loss of open trades — the account's real value right now.
Margin call
A broker warning that your equity has fallen too close to the margin your open positions require — typically when the margin level (equity ÷ used margin) drops near 100%. Add funds or reduce size, or a stop out follows.
Stop out
The level (often around 50% margin level) at which the broker automatically closes your positions, starting with the biggest loser, to stop the account going negative. It is not optional and it is not a stop loss you chose.
Free margin
Equity minus the margin already used by open trades — the buffer that absorbs floating losses and funds new positions.
Slippage
The difference between the price you expected and the price you actually got. Worst around news releases and in thin liquidity.
Orders & Risk
Stop Loss
An order that automatically closes a losing trade at a preset price to limit risk.
Take Profit
An order that closes a trade automatically at a preset profit target.
Breakeven
Moving your stop loss to the entry price so the trade can no longer lose. Usually done once price has travelled one unit of risk (1R) in your favour.
Trailing stop
A stop loss that follows price at a fixed distance as the trade moves in your favour, locking in gains while leaving room for the trend to run.
Risk-to-reward (R)
How much you stand to make compared with what you risk. Risking 20 pips to make 40 is 1:2. One unit of risk is called 1R.
Position size
How many lots you trade, calculated from your account size, your risk percentage and your stop distance — not from how confident you feel.
Drawdown
The fall from an account's peak to its trough. A 50% drawdown needs a 100% gain to recover, which is why small losses matter so much.
Weekend gap
The difference between Friday's close and Sunday/Monday's open, caused by news while the market was shut. Price can open beyond your stop loss, so the trade fills at the first available price — worse than the level you set.
Price Action
Support
A price level where buyers have repeatedly stepped in and stopped the fall. Reversal candles mean far more when they form here.
Resistance
A price level where sellers have repeatedly capped the rally. Bearish reversal candles mean far more when they form here.
Trend
The prevailing direction of price: higher highs and higher lows is an uptrend, lower highs and lower lows is a downtrend. A pattern's meaning depends entirely on the trend it appears in.
Reversal
A change in direction: the side that was in control gives it up. Candlestick reversal patterns are only signals at an extreme — in the middle of a range they are noise.
Continuation
Price pauses and then resumes in the same direction. A 'failed' reversal pattern is very often a continuation signal.
Confirmation
The candle after the pattern that proves it: a close beyond the pattern's extreme in the expected direction. Without it, the pattern is only a possibility.
Rejection
Price trades into a level and is pushed straight back out, leaving a long wick. Rejection is the raw signal behind hammers, shooting stars and tweezers.
Exhaustion
The trend's fuel runs out — bodies shrink, wicks grow, and progress stalls. The small middle candle of a morning or evening star is textbook exhaustion.
Swing high / swing low
A local peak (swing high) or trough (swing low) on the chart. These are the reference points patterns form at and the levels stops usually sit beyond.
Liquidity sweep (stop run)
A quick push beyond an obvious high or low to trigger resting stop orders, followed by an immediate reversal. Often what a long wick or engulfing candle is really showing you.
Volume
How much was traded during a period. A reversal candle backed by above-average volume carries far more weight than the same shape on quiet volume.
Confluence
Several independent reasons pointing to the same trade at the same price — a level, the trend, a rejection wick and a confirming close. More confluence, better odds.
Range (sideways market)
Price oscillating between a flat ceiling and a flat floor with no new highs or lows. Fade the edges, never chase the middle.
Breakout
Price closing outside a range or level. The reliable version comes back to retest the broken level and holds; the first push through is often false.
Role reversal
Broken resistance tends to become support and broken support tends to become resistance. The old ceiling becomes the new floor.
Supply zone
The area a sharp sell-off launched from, where sellers overwhelmed buyers. Drawn as a band rather than a line, and strongest while still untested.
Demand zone
The area a sharp rally launched from, where buyers overwhelmed sellers. Price often returns to it before continuing higher because unfilled orders remain there.
Imbalance (inefficiency)
A stretch of price where one side dominated so completely that the other side barely traded. Markets tend to revisit imbalanced areas so both sides can transact.
Fair value gap (FVG)
A three-candle imbalance where candle three's low sits above candle one's high (bullish), or candle three's high sits below candle one's low (bearish). Price often fills the gap before continuing.
Momentum
The speed and force behind a move. Fading momentum — shrinking bodies, a flattening MACD histogram — warns that a trend is tiring even while price still edges on.
Candlesticks
Candlestick
One bar on the chart showing four prices for a period: the open, high, low and close. Green means it closed above its open, red means it closed below.
Body (real body)
The thick part of a candle, measured from the open to the close. A big body means one side dominated the whole period; a small body means the period ended near where it started.
Wick (shadow)
The thin line above or below the body, marking the high and low. A long wick shows price was pushed there and rejected before the candle closed.
Open
The first traded price of the candle's period — the top of a red body, the bottom of a green body.
Close
The last traded price of the period. The close is the most important price on a candle because it shows who finished the period in control.
Doji
A candle whose open and close are almost identical, leaving a near-invisible body. It signals balance and indecision, not direction.
Engulfing
A two-candle pattern where the second candle's body completely covers the first candle's body, showing that one side reversed the entire previous period.
Harami (inside candle)
A candle whose whole body sits inside the previous candle's body. It shows momentum contracting — the trend has stopped expanding.
Marubozu
A candle with a full body and little to no wick: one side controlled the period from open to close.
Midpoint (50% level)
The halfway point of a candle's body. Closing beyond a prior candle's midpoint is the test that separates a real reversal attempt (piercing line, dark cloud cover) from a shallow pullback.
Gap
An empty space between one candle's close and the next candle's open. Common in stocks and at the weekly forex open; in 24-hour forex it usually appears as a fast wick instead.
Indicators
Moving average (SMA / EMA)
The average closing price over the last N candles, plotted as a line. An SMA weights every candle equally; an EMA weights recent candles more, so it turns faster.
RSI (Relative Strength Index)
A 0-100 momentum gauge comparing recent up closes to down closes. Above 70 is overbought, below 30 oversold — a measure of speed, not a reversal signal on its own.
MACD
The difference between a fast and slow EMA, plotted against a signal line with a histogram. Crossovers flag momentum shifts; a shrinking histogram flags a fading move.
Bollinger Bands
A 20-period average with bands set a couple of standard deviations away. Bands squeeze when volatility is low and expand on breakouts.
Divergence
Price makes a new high or low but the indicator does not, showing the new extreme came with less force. A warning to wait for confirmation, not an entry by itself.
Psychology & Plan
Scalping
A very short-term style: many trades a day held seconds to minutes for small targets. Needs constant screen time, fast execution and tight spreads, because costs dominate the results.
Day trading
Opening and closing every position within the same day, so nothing is held overnight. No swap costs and no weekend gap risk, but it demands several focused hours during your session.
Swing trading
Holding trades for days to weeks to capture a larger price swing. Low daily time commitment and wider stops, but positions carry overnight swap and weekend gap risk.
Position trading
The longest style: trades held weeks to months on fundamental and higher-timeframe technical trends. Very few decisions, very wide stops, and small position sizes.
Trading plan
A one-page written document defining your markets, hours, setup, risk, exits, routine and review — decided before money is at stake.
Trading journal
A record of every trade with the reason, a screenshot and an emotional note. Patterns in your own behaviour appear within twenty entries.
Tilt (revenge trading)
Trading to recover a loss rather than because a setup exists. The fix is a hard daily loss limit and physically leaving the screen.
Discipline
Following rules specific enough to be broken, on every occasion, including the boring weeks. Scored on process, not on profit.
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