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The lowest price a seller is willing to accept. When you buy, you pay the ask price.
Average True Range - measures volatility by averaging the range of price movement.
Average Directional Index - measures trend strength regardless of direction.
The highest price a buyer is willing to pay. When you sell, you receive the bid price.
A market characterized by rising prices and optimism.
A market characterized by falling prices and pessimism.
When price moves beyond a defined support or resistance level.
Volatility indicator with bands that expand/contract based on price volatility.
Moving your stop loss to entry price so the trade has no risk of loss.
The first currency in a forex pair - what you're buying or selling.
Example: In EUR/USD, EUR is the base currency
Strong upward move followed by consolidation - signals continuation of uptrend.
Strong downward move followed by consolidation - signals continuation of downtrend.
A chart type showing open, high, low, and close prices for a time period.
Contract for Difference - a derivative product that lets you trade price movements without owning the asset.
U-shaped recovery followed by small pullback - bullish continuation pattern.
Parallel trend lines containing price movement.
Period where price trades in a range without clear direction.
A candlestick where open and close are nearly equal, showing market indecision.
When price and an indicator move in opposite directions, often signaling reversal.
The decline from a peak to a trough in your account balance.
Price hits resistance twice at similar levels, forming an M shape. Bearish reversal.
Price hits support twice at similar levels, forming a W shape. Bullish reversal.
A two-candle pattern where the second candle completely covers the first.
A three-candle bearish reversal pattern: green candle, small body, red candle.
Your account balance plus or minus any unrealized profits/losses from open positions.
Exponential Moving Average - gives more weight to recent prices than SMA.
Foreign Exchange - the market for trading currencies.
The amount of money available to open new positions.
Mathematical ratios (23.6%, 38.2%, 61.8%) used to identify potential support/resistance.
A bullish reversal pattern with a small body at top and long lower shadow.
Taking an opposite position to reduce risk on an existing trade.
Three peaks with middle one highest - classic bearish reversal pattern.
A comprehensive indicator showing support, resistance, momentum, and trend direction.
A standardized unit of currency. Standard lot = 100,000 units, Mini = 10,000, Micro = 1,000.
Using borrowed capital to increase potential returns. 10:1 leverage means $1,000 controls $10,000.
Buying an asset expecting the price to rise.
How easily an asset can be bought or sold without affecting its price.
The amount required to open and maintain a leveraged position.
A three-candle bullish reversal pattern: red candle, small body, green candle.
An indicator that smooths price data by creating an average over a set period.
Moving Average Convergence Divergence - shows relationship between two moving averages.
A warning that your equity has fallen below the required margin level.
On-Balance Volume - measures buying and selling pressure using volume.
The smallest price movement in forex, typically the 4th decimal place for most pairs.
Example: EUR/USD moving from 1.1050 to 1.1051 is a 1 pip move
A temporary reversal in the direction of the prevailing trend.
Determining how much capital to risk on a single trade.
Adding to a winning position as it moves in your favor.
Practicing trading with simulated money instead of real capital.
Small symmetrical triangle that forms after a strong move - continuation pattern.
Calculated levels used to identify potential support and resistance.
The second currency in a forex pair - what you're measuring the base currency in.
Example: In EUR/USD, USD is the quote currency
A price level where selling pressure is expected to prevent further rise.
Relative Strength Index - measures speed and change of price movements (0-100 scale).
Example: RSI above 70 = overbought, below 30 = oversold
The potential profit compared to potential loss on a trade.
Example: Risking $100 for potential $300 gain = 1:3 R:R
The difference between the bid and ask price. This is essentially a cost of trading.
Example: If bid is $100 and ask is $100.50, the spread is $0.50
Selling an asset expecting the price to fall, with the intent to buy back cheaper.
A price level where buying pressure is expected to prevent further decline.
An order to automatically close a position at a specified price to limit losses.
The difference between expected price and the actual execution price.
Adding to a position gradually rather than all at once.
Closing portions of a winning trade at different price targets.
When the broker automatically closes your positions because margin is too low.
The interest paid or earned for holding a position overnight.
Simple Moving Average - the average price over a set number of periods.
Momentum indicator comparing closing price to price range over time (0-100).
An order to automatically close a position at a target price to lock in gains.
A stop loss that moves with the price to lock in profits as the trade moves in your favor.
The minimum price movement of an instrument.
Price consolidation between converging trendlines - can break either direction.
A line connecting swing highs or lows to identify the direction of trend.
The number of shares or contracts traded in a given period.
The degree of price variation over time. High volatility = larger price swings.
Volume Weighted Average Price - average price weighted by trading volume.
Converging trendlines that slope in the same direction - typically reversal pattern.