The risk-reward ratio compares how much you could win on a trade with how much you risk. Risking 50 pips to possibly make 100 is 1 to 2.
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The risk-reward ratio compares how much you could win on a trade with how much you risk. Risking 50 pips to possibly make 100 is 1 to 2.
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Going short means selling an asset you expect to fall, then buying it back later at a lower price. You profit from the difference.
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Going short means selling an asset you expect to fall, then buying it back later at a lower price. You profit from the difference.
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Going long means buying an asset because you expect its price to rise, so you can sell it later for more.
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Going long means buying an asset because you expect its price to rise, so you can sell it later for more.
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A candlestick is a chart bar that shows four prices for one period: the open, the high, the low and the close. The thick part is the body, the thin lines are the wicks.
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A candlestick is a chart bar that shows four prices for one period: the open, the high, the low and the close. The thick part is the body, the thin lines are the wicks.
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Drawdown is the fall in your account from its highest value to the lowest point after it, shown as a percentage of that peak.
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Drawdown is the fall in your account from its highest value to the lowest point after it, shown as a percentage of that peak.
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A breakout is when price moves beyond a level it respected before, such as a support or a resistance, and keeps going.
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A breakout is when price moves beyond a level it respected before, such as a support or a resistance, and keeps going.
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5 more terms you’ll hear everywhere. Save it before you need it.
📘 The Trader's Glossary: Part 2
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5 more terms you’ll hear everywhere. Save it before you need it.
📘 The Trader's Glossary: Part 2
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A trend is the general direction price is moving. An uptrend makes higher highs and higher lows. A downtrend makes lower highs and lower lows. Between them price can move sideways.
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A trend is the general direction price is moving. An uptrend makes higher highs and higher lows. A downtrend makes lower highs and lower lows. Between them price can move sideways.
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Resistance is a price area where rising prices have often stalled or turned down before, because sellers tend to show up there.
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Resistance is a price area where rising prices have often stalled or turned down before, because sellers tend to show up there.
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Support is a price area where falling prices have often stopped or bounced before, because buyers tend to show up there.
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Support is a price area where falling prices have often stopped or bounced before, because buyers tend to show up there.
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Volatility is how much and how fast a price moves. High volatility means large swings in a short time. Low volatility means small, slow moves.
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Volatility is how much and how fast a price moves. High volatility means large swings in a short time. Low volatility means small, slow moves.
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Liquidity is how easily you can buy or sell something without moving its price much. A liquid market has many buyers and sellers at almost every price.
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Liquidity is how easily you can buy or sell something without moving its price much. A liquid market has many buyers and sellers at almost every price.
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A bear market is a period when prices keep falling and fear is high. A common rule of thumb calls it a bear market when prices drop about 20% from a recent high.
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A bear market is a period when prices keep falling and fear is high. A common rule of thumb calls it a bear market when prices drop about 20% from a recent high.
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A bull market is a period when prices keep rising and most people are optimistic. A common rule of thumb calls it a bull market when prices rise about 20% from a recent low.
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A bull market is a period when prices keep rising and most people are optimistic. A common rule of thumb calls it a bull market when prices rise about 20% from a recent low.
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A lot is the standard unit of trade size. In forex, one standard lot is 100,000 units of the base currency. A mini lot is 0.1 (10,000 units) and a micro lot is 0.01 (1,000 units).
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A lot is the standard unit of trade size. In forex, one standard lot is 100,000 units of the base currency. A mini lot is 0.1 (10,000 units) and a micro lot is 0.01 (1,000 units).
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A take-profit is an order that closes your trade automatically when the price reaches the profit target you set in advance.
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A take-profit is an order that closes your trade automatically when the price reaches the profit target you set in advance.
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A stop-loss is an order that closes your trade automatically at a price you chose in advance. It caps how much one trade can lose.
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A stop-loss is an order that closes your trade automatically at a price you chose in advance. It caps how much one trade can lose.
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Margin is the part of your money the broker locks as a deposit while a leveraged position is open. It is not a fee. You get it back when the trade closes.
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Margin is the part of your money the broker locks as a deposit while a leveraged position is open. It is not a fee. You get it back when the trade closes.
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Leverage lets you control a position larger than your money by borrowing from the broker. At 1:100, each 1 in your account can control 100 in the market.
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Leverage lets you control a position larger than your money by borrowing from the broker. At 1:100, each 1 in your account can control 100 in the market.
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The spread is the gap between the price you can buy at (ask) and the price you can sell at (bid). It is the built-in cost of opening a trade, usually paid to the broker.
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The spread is the gap between the price you can buy at (ask) and the price you can sell at (bid). It is the built-in cost of opening a trade, usually paid to the broker.
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The smallest standard price move in forex, usually the fourth decimal place.
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The smallest standard price move in forex, usually the fourth decimal place.
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Can you match all the terms in this game? 👀💡
Comment below when you’ve matched them all! 🧠
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