- Ask
- The price at which the market will sell to you — the price you pay when buying. Always slightly above the bid; the difference is the spread.
- Base currency
- The first currency in a forex pair — the thing being bought or sold. In EUR/USD, the euro is the base; the price is what one euro costs in dollars.
- Bid
- The price at which the market will buy from you — the price you receive when selling. Sits just below the ask.
- Candlestick
- A chart element recording four prices for a period: open, high, low, close. The body shows who won the period; the wicks show rejected attempts.
- Circuit-breaker (personal)
- A pre-written rule that halts your trading after a defined loss (e.g. −3R in a week). Its job is to stop operator damage from compounding a normal drawdown.
- Drawdown
- The decline from an account's peak to its subsequent low, in percent or R. Every system produces drawdowns; recovery required grows faster than the loss.
- Economic calendar
- The schedule of data releases and policy events (rates, CPI, NFP, results) with forecast and previous values. Impact ratings forecast volatility, not direction.
- Expectancy
- The average result per trade in R: (win rate × avg win) − (loss rate × avg loss). The number that reconciles win rate with win size — and the only honest measure of a system.
- Fair value gap (FVG)
- A range that price crossed so fast it traded only once, in one direction — an imbalance the market may revisit. A marker of one-sided trade, not a guarantee of a fill.
- Forex (FX)
- The global market for exchanging currencies, traded in pairs around the clock from Monday in Asia to Friday in New York. The largest market in the world by volume.
- Futures contract
- An agreement to buy or sell an asset at a fixed price on a fixed date, traded on margin. P&L moves one-for-one with the underlying — in both directions.
- Gap
- A jump between one period's close and the next period's open with no trading between, usually caused by news landing while the market was shut.
- Hedging
- Taking a position to reduce an existing risk rather than to speculate — like a fund buying puts to insure a portfolio. Hedgers often take the other side of speculators' trades.
- Killzone
- A session window where institutional order flow concentrates — typically the London and New York opens. Price behaviour during these windows carries more information.
- Leverage
- Controlling a position larger than your capital by depositing margin. It multiplies gains and losses equally: at 1:100, a 1% adverse move consumes the entire margin.
- Liquidity
- The presence of resting orders available to trade against. Stops below lows and above highs form pools that large participants need in order to fill size.
- Liquidity sweep
- A push through an obvious level that triggers the resting stops there, often followed by reversal. In auction terms: size got filled where the orders were.
- Lot
- The unit of position size in forex: standard (100,000 units, ≈$10/pip), mini (10,000, ≈$1/pip), micro (1,000, ≈$0.10/pip). Lot size — not the market — decides survivability.
- Margin
- The deposit required to open a leveraged position. If losses approach the margin, the broker closes positions (margin call) — the account's hard floor.
- Market maker
- A participant quoting both bid and ask continuously, earning the spread and hedging exposure. The reason you can transact instantly without a matching human on the other side.
- Market structure
- The skeleton of swing highs and lows a market leaves behind. An uptrend is a sequence of higher highs and higher lows; it breaks when the last higher low gives way.
- Option
- The right — not the obligation — to buy (call) or sell (put) at a strike price before expiry, bought for a premium. Buyer risk is capped at the premium; seller risk is not.
- Order block
- The zone of the last opposite-coloured candle(s) before a strong impulsive move — where large orders transacted. Price returning there often meets the same interest.
- Pip
- The standard unit of forex price movement — the fourth decimal for most pairs (second for JPY pairs). EUR/USD moving 1.0850 → 1.0860 is 10 pips.
- Position sizing
- Calculating quantity from risk: risk amount ÷ stop distance. The wider the stop, the smaller the position — rupee risk stays constant.
- Priced in
- Already reflected in the current price because participants positioned for it in advance. Markets react to the surprise versus expectations, not to the news itself.
- Quote currency
- The second currency in a forex pair — what you pay with. In EUR/USD at 1.0850, dollars are the quote: one euro costs 1.0850 of them.
- R (risk unit)
- Your planned risk per trade, used as a universal measuring stick: a trade that makes twice its risk is +2R. Thinking in R turns losses into budgeted business costs.
- Range
- A sideways market oscillating between a zone of buying interest below and selling interest above. Inside ranges, strength gets sold and weakness gets bought — trend logic bleeds.
- Sell-the-news
- The fade that follows an event whose outcome matched expectations: with no surprise to reprice, early positioning takes profit and the pre-event drift reverses.
- Slippage
- The difference between the price you requested and the price you were filled at, largest during fast markets and news events. A real cost that widens around red-calendar releases.
- Spread
- The gap between bid and ask — the cost of entering a trade. Every position starts slightly behind by the spread; it widens sharply during volatile events.
- Stop-loss
- A resting order that exits your position at the price where your trade idea is proven wrong. It belongs at the idea's invalidation point, not at a comfortable rupee number.
- Swing high / swing low
- A peak with lower highs on both sides (swing high) or its mirror (swing low) — the market's decision points, where entries, exits and stops actually happened.
- Time decay
- The daily erosion of an option's time value, accelerating toward expiry. The reason an option buyer can be right on direction and still lose money.
- Whipsaw
- A violent move in both directions within minutes, typical when an event's headline and details conflict. The reason professionals rarely trade the first candle after a release.