Trading Glossary
A comprehensive glossary of trading terms — from XAUUSD and pips to leverage and stop-loss — with direct, quotable definitions.
What is XAUUSD? (the gold symbol)
XAUUSD defined: the symbol for trading gold against the dollar, what its moves mean, and how contract size works.…
glossaryWhat is a Pip in trading?
Definition of a Pip: the smallest standard unit of price change in forex and gold, and how its money value is calculated…
glossaryWhat is a Lot?
Lot size defined: standard, mini and micro contracts, and how size determines pip value and your risk.…
glossaryWhat is Leverage?
Leverage defined: how it works, what it actually changes, and nominal versus effective leverage.…
glossaryWhat is a Stop-Loss?
Stop-loss defined: how it works, where to place it, and why it does not guarantee an exit price across gaps.…
glossaryWhat is the Spread?
Spread defined: the bid-ask gap, how to compute its money cost, and when it widens.…
glossaryWhat is Balance in a trading account?
Balance in a trading account defined: how it differs from equity, and why it alone does not measure account health.…
glossaryWhat is Equity in trading?
Equity defined: the live value of a trading account, how it is calculated, and why it is the number that decides your po…
glossaryWhat is Margin in trading?
Margin defined: the amount held against a position, how the formula works, and why it is not a cost.…
glossaryWhat is Free Margin?
Free margin defined: what remains of equity after held margin, and how it moves with floating profit and loss.…
glossaryWhat is Margin Level?
Margin level defined and calculated, and what each level means in practice before a margin call and stop-out.…
glossaryWhat is a Margin Call?
Margin call defined: when it happens, how it differs from a stop-out, and what to do when it arrives.…
glossaryWhat is a Stop Out?
Stop-out defined: when the broker executes it, which positions close first, and how to calculate its price in advance.…
glossaryWhat is Swap in trading?
Swap defined: where it comes from, when it is tripled, and how it accumulates on longer-held positions.…
glossaryWhat is Slippage?
Slippage defined: why it happens, when it worsens, and how it differs from broker error.…
glossaryWhat is Liquidity in markets?
Liquidity defined: how it drives spread and slippage, and when it thins during the day.…
glossaryWhat is Volatility in trading?
Volatility defined: how it is measured, and why position size must change with it even at a fixed risk percentage.…
glossaryWhat is Drawdown in trading?
Drawdown defined with the mathematics of recovery, and why it decides survival more than win rate does.…
glossaryWhat is the Risk-to-Reward Ratio?
Risk-to-reward defined, with the win rate each ratio requires, and why the ratio alone is not enough.…
glossaryWhat is Expectancy in trading?
Expectancy defined and calculated from your trade record, and why it is the single decisive measure.…
glossaryWhat is a Market Order?
Market order defined: immediate execution at the best available price, when it fits, and why it guarantees the fill but …
glossaryWhat is a Limit Order?
Limit order defined: buying below the market or selling above it, and why it guarantees price rather than execution.…
glossaryWhat is a Stop Order?
Stop order defined: how it converts to a market order on trigger, and why the fill price is not guaranteed.…
glossaryPending orders: which one does your setup need?
Pending orders explained: limit versus stop in both directions, and how to choose the right one for your method.…
glossaryWhat is a Take Profit order?
Take profit defined: how it derives from the risk-to-reward ratio, and why it is set before entry.…
glossaryWhat is a Trailing Stop?
Trailing stop defined: how it works, choosing the trail distance, and when it costs more than it protects.…
glossaryWhat is risk per trade, and how do you set it?
Risk per trade: how to set it, why the percentage stays fixed while size varies, and how it relates to losing streaks.…
glossaryWhat does moving your stop to break-even mean?
The break-even stop: when it is a sound decision, and why it is not the free move it appears to be.…
glossaryWhat is Risk of Ruin?
Risk of ruin explained: why a high risk percentage kills a profitable system, and how to estimate it in practice.…
glossaryWhat is Hedging in trading?
Hedging defined: how it freezes a loss instead of removing it, and its real cost against simply closing.…
glossaryWin rate: what it measures and what it does not
Win rate: how it is calculated, why it is insufficient alone, and the number that must always accompany it.…
glossaryWhat is Profit Factor?
Profit factor: how it is calculated, how to read it, and what it hides despite its simplicity.…
glossaryWhat is an R-Multiple and why use it?
The R-multiple: how it standardises measurement across different trades, and turns a record into analysable data.…
glossarySupport and resistance: what the levels are and how they swap roles
Support and resistance: why they are zones rather than lines, and why they swap roles after a break.…
glossaryWhat is a trend, and how do you define one objectively?
Trend defined by the structure of highs and lows, how to know it has ended, and why it decides which strategy is valid.…
glossaryWhat is a price range, and how do you trade it?
Ranges explained: how to recognise one, why trend strategies fail inside it, and how the rules change.…
glossaryBreakouts: telling the genuine from the false
Breakouts: separating genuine from false, and why the retest of the broken level is the key test.…
glossaryFOMO in trading: the fear of missing out
FOMO: its measurable signature in your trade record, and why it produces the worst entries.…
glossaryRevenge trading: what it is and how to spot it in your record
Revenge trading: its signature in the record, and why it converts an ordinary drawdown into ruin.…
glossaryOvertrading: why it destroys a real edge
Overtrading: how costs consume the edge, and how to measure whether you are actually doing it.…
glossaryLoss aversion: how it inverts your risk-to-reward
Loss aversion: how it inverts realised risk-to-reward, and how to detect it in your own numbers.…
glossaryWhat is an Order Book?
The order book: how its depth sets spread and slippage, and why a retail forex trader rarely sees one.…
glossaryMarket makers: who they are and how they shape your fill
Market makers: how they provide liquidity, why they withdraw around news, and what that means for your fill.…
glossaryWhat does a trade actually cost to execute?
Full execution cost: how to add up its components, and how to measure it against risk rather than in dollars alone.…
glossaryPrice gaps: why they break a risk plan
Price gaps: why they happen, how they void the guarantee of a stop loss, and how to limit exposure.…
glossaryWhat is the Non-Farm Payrolls report?
Non-Farm Payrolls: when it lands, why it moves gold and the dollar, and what happens to an open position at release.…
glossaryWhat is the Consumer Price Index?
CPI explained: headline versus core, and why gold reacts to the core figure.…
glossaryRate decisions: why the market moves before the announcement
Rate decisions: why they are priced in advance, and why the bigger move comes from the statement rather than the number.…
glossaryThe economic calendar, and how to actually read it
The economic calendar: reading forecast against previous, and why it is a risk tool rather than a forecasting one.…
glossaryWhat is an Expert Advisor in MetaTrader?
Expert Advisors: what they actually do, what they do not, and how to evaluate one before running it live.…
glossaryBacktests: what they are and why they flatter
Backtesting: what it proves and what it does not, and the assumptions that make results look better than reality.…
glossaryTrading VPS: what it is and when you actually need one
Trading VPS: when it is genuinely necessary, and when it is spending with no effect on results.…
glossaryTimeframes: what they are and how to choose one
Timeframes: how they set stop distance and cost ratio, and why analysis and execution must use the same one.…
glossaryECN accounts: are they actually cheaper?
ECN accounts: how they differ from a market-maker account, and how to compute which is cheaper for your size and style.…
glossaryTrading commission: what it is and how it is charged
Trading commission: how it is charged per lot, and why an account with one can still be cheaper overall.…
glossaryRequotes: what they are and why they happen
Requotes: how they differ from slippage, when they occur, and what they say about your execution model.…
glossaryCorrelation: how it silently multiplies your risk
Correlation: how it turns two trades into one doubled risk, and how to compute real exposure.…
glossaryWhat real diversification looks like in trading
Diversification: why holding several instruments is not diversification, and the practical test of real independence.…
glossaryThe daily loss limit, and how to set one
The daily loss limit: deriving it from your per-trade risk, and why it stops a bad day before it becomes a drawdown.…
glossaryThe Sharpe ratio, and what it adds to a return figure
The Sharpe ratio: how it is computed, what it adds to raw return, and the limits worth knowing.…
glossaryThe equity curve, and what it reveals
The equity curve: how to read it, the patterns it exposes, and why the shape matters more than the final point.…
glossaryOverconfidence in trading, and how to measure it
Overconfidence in trading: its measurable signature in your record, and why it appears specifically after wins.…
glossaryConfirmation bias in trading
Confirmation bias in trading: its signature in your record, and how to test an idea instead of collecting evidence for i…
glossaryRecency bias in trading
Recency bias in trading: why three trades feel like enough to change a system, and how to measure it.…
glossaryThe sunk cost fallacy in trading
The sunk cost fallacy: why adding to a loser feels logical, and how it actually multiplies your risk.…
glossaryAnchoring bias in trading
Anchoring bias in trading: how your entry price becomes a false standard, and how to break the attachment.…
glossarySwing highs and swing lows
Swing points: the base unit of market structure, how to identify one, and the comparison rule most readers get wrong.…