Reference

The jargon,
in plain English.

121 terms you will meet in the guides, on a broker platform or in market commentary — defined without assuming you already know three other terms first.

AskBasics: The lowest price a seller is currently willing to accept. You buy at the ask.
Balance sheetFundamental: A snapshot of what a company owns and owes on a given date. Assets equal liabilities plus equity.
Base currencyForex: The first currency in a pair. In GBP/USD, the pound is the base — buying the pair means buying pounds.
BidBasics: The highest price a buyer is currently willing to pay. You sell at the bid.
BOSSmart money: Break of structure — price making a new high in an uptrend (or new low in a downtrend), confirming the existing sequence continues.
Bracket orderOrders: An entry submitted together with its stop-loss and take-profit. The single best habit for enforcing a plan.
Break of structureTechnical: Price making a new high in an uptrend (or new low in a downtrend), confirming the existing sequence continues.
Breaker blockSmart money: A failed order block that price traded through, then returns to from the other side — now acting in the opposite role.
BreakoutTechnical: Price moving decisively beyond a defined level. A genuine breakout closes beyond the level on expanding volume; a false break wicks through and closes back inside.
BrokerBasics: The firm that executes your trades. Its spreads, commissions and execution quality directly determine whether a small edge survives.
Buy-side liquiditySmart money: Resting buy orders above the market — mostly stop-losses from short positions and breakout buy stops. A magnet above price.
CandlestickTechnical: A chart element showing four prices for one period: open, high, low and close. The body spans open to close; the wicks reach the extremes.
Carry tradeForex: Borrowing in a low-yielding currency to hold a higher-yielding one, collecting the differential. Profitable until the exchange rate moves against you sharply.
Central bankMacro: The institution setting a country's monetary policy — the Federal Reserve, Bank of England, European Central Bank. Its rate decisions influence every asset class.
CFDInstruments: Contract for difference — a leveraged derivative tracking an asset's price without ownership. Banned for retail clients in some jurisdictions.
Change of characterTechnical: The first break of a prior swing point against the trend — a warning that control may be shifting, not a reversal signal.
CHoCHSmart money: Change of character — the first break of a prior swing point against the trend. A warning that control may be shifting, not a reversal signal on its own.
ConfluenceTechnical: Several independent factors pointing to the same level or conclusion. Genuine confluence uses different types of evidence, not five indicators computed from the same price.
ContangoInstruments: When later-dated futures cost more than nearer ones. Rolling positions forward then costs money — the reason some commodity ETFs fall in a year the commodity rose.
CorrelationRisk: The degree to which two assets move together. Five correlated positions are effectively one larger position, and in a crisis correlations converge.
CPIMacro: Consumer Price Index — the headline inflation measure. One of the highest-impact scheduled releases in any calendar.
CrossForex: A currency pair not involving the US dollar, such as EUR/GBP.
Discount rateFundamental: The rate used to convert future cash flows into today's value. When interest rates rise, the discount rate rises and asset values fall.
DisplacementSmart money: A sharp, large-bodied move that breaks structure decisively. The filter that separates a meaningful order block or gap from a meaningless one.
DivergenceTechnical: When price and an oscillator disagree — for example price makes a higher high while momentum makes a lower high. A warning, not a timing tool.
DividendFundamental: A cash payment to shareholders. On the ex-dividend date the share price drops by roughly the dividend — that is not a sell-off.
DojiTechnical: A candle whose open and close are nearly identical, producing almost no body. Indicates indecision.
DovishMacro: Favouring looser policy — lower rates to support growth. Typically weakens the currency.
DrawdownRisk: The decline from an equity peak to a trough. Recovery is asymmetric — a 50% drawdown requires a 100% gain to break even.
Earnings seasonFundamental: The weeks each quarter when most companies report. A period of elevated, scheduled, binary risk.
EMATechnical: Exponential moving average — weights recent periods more heavily, so it turns faster and produces more false signals.
EPSFundamental: Earnings per share. A company's net profit divided by its share count.
Equal highsSmart money: Two or more highs at nearly the same price. Obvious to everyone, so stops cluster just above them — a prime liquidity target.
EquilibriumSmart money: The 50% level of a dealing range, dividing premium from discount.
ETFInstruments: Exchange-traded fund — a basket of assets trading like a single share. Check whether it holds the physical asset or futures.
ExchangeBasics: A central venue with one visible order book and published volume, such as the London Stock Exchange.
ExpectancyRisk: The average result per trade: (win rate × average win) − (loss rate × average loss). The number that determines whether a strategy makes money.
Fair value gapSmart money: A three-candle pattern where the middle candle moves so fast that the outer wicks never overlap, leaving a band of prices at which buyers and sellers never met. Also called an imbalance. Abbreviated FVG.
False breakTechnical: A move through a level that immediately reverses, often after triggering the stops clustered just beyond it.
Fibonacci retracementTechnical: Horizontal levels at set percentages of a prior move (38.2%, 50%, 61.8%) used to anticipate where a pullback may end.
FillOrders: The execution of an order. A partial fill means only some of your requested quantity was completed.
Free cash flowFundamental: Operating cash flow minus capital expenditure. The cash genuinely left over, and one of the hardest figures to manipulate.
Fundamental analysisFundamental: Estimating an asset's value from real-world factors — earnings, rates, supply and demand — rather than from price behaviour.
FuturesInstruments: A standardised contract to buy or sell an asset at a set future date. Contracts expire, which introduces rollover costs.
FVGSmart money: Fair value gap — an untraded band of prices left by a fast move. See Fair value gap.
GapBasics: When a market reopens at a materially different price from where it closed. Stops cannot protect you across a gap — only position size can.
Golden crossTechnical: The 50-period moving average crossing above the 200. Widely reported, but a lagging signal that performs poorly in ranging markets.
GTCOrders: Good-till-cancelled. An order that stays live until filled or cancelled. Review these — a forgotten order can fire weeks later.
GuidanceFundamental: Management's forecast for future performance. Often moves the share price more than the reported results themselves.
HalvingCrypto: A scheduled reduction in the rate of new Bitcoin issuance. Known years in advance, and therefore at least partly anticipated by the market.
HawkishMacro: Favouring tighter policy — higher rates to fight inflation. Typically supports the currency.
ImbalanceSmart money: Any area where trade was one-sided, leaving a gap in the price record. See Fair value gap.
IndexInstruments: A measure of a basket of assets, such as the S&P 500 or FTSE 100. Check its weighting before assuming it represents a whole market.
InducementSmart money: A minor high or low that attracts entries and stops before the real move, effectively supplying the liquidity for it.
InflationMacro: The rate at which prices rise. Central banks typically target around 2%; inflation data drives rate expectations and therefore markets.
Interest rateMacro: The cost of borrowing money, set at the short end by the central bank. The gravitational force behind all asset pricing.
Kill zoneSmart money: A specific window when a session's liquidity is at its richest, most often the first hours of the London and New York opens.
LeverageRisk: Controlling a position larger than your capital using borrowed funds. It does not create an edge — it amplifies the consequence of ordinary volatility.
Limit orderOrders: An instruction to trade only at a specified price or better. Guarantees price, not execution.
LiquidationCrypto: The forced closure of a leveraged position when margin is exhausted. Cascading liquidations produce the violent moves crypto is known for.
LiquidityBasics: How easily an asset can be traded without moving its price. In a liquid market there are plenty of orders on both sides; in an illiquid one, your own order shifts the price against you.
Liquidity sweepSmart money: A move through an obvious high or low that triggers the stop orders resting there, then reverses. The stops provide the fills a large order needs.
LotForex: A standardised trade size. A standard lot is 100,000 units; mini, micro and nano lots are successively smaller.
MACDTechnical: Moving Average Convergence Divergence. Measures the gap between two EMAs. Its histogram slope is more useful than its crossover.
Major pairsForex: The most heavily traded pairs, all involving the US dollar — EUR/USD, GBP/USD, USD/JPY and USD/CHF. Tightest spreads and best liquidity.
MarginRisk: The capital your broker requires you to hold against a leveraged position.
Margin callRisk: A demand for more funds when losses erode your margin. Ignore it and positions are closed for you, at whatever price is available.
Market capFundamental: Share price multiplied by shares outstanding — the market's valuation of the whole company.
Market makerBasics: A firm that continuously quotes both a bid and an ask, profiting from the spread rather than from price direction.
Market orderOrders: An instruction to trade immediately at the best available price. Guarantees execution, not price.
Market structureTechnical: The sequence of swing highs and lows that defines whether a market is trending or ranging. The single most important read on any chart.
Mitigation blockSmart money: An order block that price returns to so an earlier position can be closed at a better price.
Moving averageTechnical: The mean price over the last N periods, recalculated each bar. Used to filter noise and define trend, not to predict.
Non-farm payrollsMacro: Monthly US employment data, released on the first Friday. Reliably moves currencies, bonds and equities.
OCOOrders: One-cancels-other. Two linked orders where filling one automatically cancels the other — the standard way to hold a stop and a target simultaneously.
Operating marginFundamental: Operating income as a percentage of revenue. A clean read on the efficiency of the core business.
OptionInstruments: A contract giving the right, but not the obligation, to buy or sell at a set price before a set date.
Order blockSmart money: The last opposing candle before a move that breaks structure — the area a significant position is inferred to have been built. Traded as a supply or demand zone identified by consequence rather than shape.
Order bookBasics: The live list of all resting buy and sell orders at each price level. It is the market's actual anatomy — price moves by consuming the orders in it.
OTCBasics: Over-the-counter — traded through a dealer network rather than a central exchange. Forex and most CFDs work this way, which is why there is no single official price.
OverboughtTechnical: A high oscillator reading. It describes sustained buying pressure; in a strong trend it can persist for weeks and is not a sell signal.
OvertradingRisk: Taking trades that do not meet your criteria, usually from boredom or a wish to recover a loss.
P/E ratioFundamental: Share price divided by earnings per share. Reflects what the market expects — a low P/E is a question to investigate, not a bargain signal.
PipForex: The standard price increment in forex — the fourth decimal place for most pairs, the second for JPY pairs.
Position sizingRisk: Calculating how many units to trade so that hitting your stop costs a predetermined amount. Derived from the stop distance — never the reverse.
Premium and discountSmart money: The upper and lower halves of a defined trading range. The idea is to sell in premium and buy in discount rather than at equilibrium.
PullbackTechnical: A temporary counter-trend move within a larger trend. Distinguishing a pullback from a reversal is the central question in most trading.
Quote currencyForex: The second currency in a pair, in which the price is expressed.
R-multipleRisk: A result expressed as a multiple of the amount risked. Making twice what you risked is +2R. Normalises results across instruments and account sizes.
RangeTechnical: A market moving sideways between a definable ceiling and floor. Trend logic applied inside a range is expensive.
Real yieldMacro: The interest rate minus expected inflation — the return in actual purchasing power. The key driver of gold, which pays no income of its own.
ResistanceTechnical: A price area where selling has previously been strong enough to halt an advance.
Revenge tradingRisk: Trading immediately after a loss to win it back, with larger size and looser criteria. The most reliable way to turn a bad day into a disaster.
Risk of ruinRisk: The probability of losing so much capital that recovery becomes impractical. Rises sharply with position size, even when the strategy has a genuine edge.
Risk-on / risk-offMacro: Market-wide regimes. Risk-on favours equities and high-beta currencies; risk-off favours the dollar, yen, franc and government bonds.
Risk-reward ratioRisk: Potential profit divided by potential loss. A 2:1 ratio means targeting twice what you risk.
ROEFundamental: Return on equity — net income divided by shareholder equity. How much profit is generated on owners' capital.
RSITechnical: Relative Strength Index. Compares recent gains to recent losses on a 0–100 scale. High readings mean persistent strength — not that an asset is due to fall.
Self-custodyCrypto: Holding your own private keys rather than leaving assets on an exchange. Removes exchange failure risk and adds the permanent risk of losing the keys.
Sell-side liquiditySmart money: Resting sell orders below the market — stop-losses from long positions and breakout sell stops.
SessionBasics: A period when a particular financial centre is actively trading. Liquidity follows sessions around the globe.
Short sellingInstruments: Selling an asset you do not own, aiming to buy it back cheaper. Losses are theoretically unlimited, because price can rise without bound.
SlippageBasics: The difference between the price you expected and the price you actually got. Worst in fast markets, thin books and around news.
SMATechnical: Simple moving average — weights every period in the lookback equally. Smoother and slower than an EMA.
SpreadBasics: The gap between the bid and the ask. It is a cost you pay the moment you enter a trade — you are immediately down by the spread.
StablecoinCrypto: A token designed to hold a fixed value, usually against the US dollar. The peg depends entirely on the quality of its backing.
Stop-limitOrders: A stop that triggers a limit order rather than a market order. Protects against a terrible fill, at the risk of not being filled at all.
Stop-lossOrders: An order that triggers once price reaches a set level, closing a losing position. It becomes a market order when triggered, so it guarantees exit but not the exit price.
SupportTechnical: A price area where buying has previously been strong enough to halt a decline. Best drawn as a zone, not a line.
SwapForex: Interest paid or earned for holding a position overnight, reflecting the interest rate differential between the two currencies.
Swing high / lowTechnical: A local peak or trough on the chart. These points define market structure and give stops a logical place to sit.
Take profitOrders: A limit order that closes a position at a predetermined profit target.
TickerBasics: The short code identifying an instrument, such as AAPL for Apple.
TimeframeTechnical: The period each candle represents. Higher timeframes carry more weight; professionals read top-down from high to low.
Trailing stopOrders: A stop that follows price at a fixed distance as the trade moves in your favour, and never moves backwards.
TrendTechnical: A sequence of higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend). A mechanical definition you can check, not a feeling.
Value trapFundamental: A stock that looks cheap on current numbers but is cheap because its earnings are deteriorating.
VolatilityBasics: How much and how quickly a price moves. High volatility means larger swings in both directions — it is not the same thing as risk, but it determines how wide your stop must be.
VolumeBasics: The number of units traded in a period. Rising volume behind a move suggests genuine participation; a big move on thin volume is less trustworthy.
WickTechnical: The thin line above or below a candle body, marking the high or low. A long wick shows price reached that level and was rejected.
Yield curveMacro: The relationship between bond yields and their maturities. An inversion — short rates above long — has historically preceded recessions.