Forex Trading Glossary
Definitions and explanations for every forex and trading term
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Base Currency - The first currency listed in a currency pair (e.g., EUR in EUR/USD).Bear Market - A market condition characterized by falling prices and negative sentiment.Bid Price - The price at which a broker will buy a currency pair from a trader.Bid-Ask Spread - The difference between the bid and ask price of a currency pair.Bollinger Bands - A technical analysis indicator that measures volatility using standard deviations.Broker - A company that provides access to the forex market for retail traders.Bull Market - A market condition characterized by rising prices and positive sentiment.Buy Limit - A pending order to buy at a price below the current market price.Buy Stop - A pending order to buy at a price above the current market price.
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CFD (Contract for Difference) - A derivative product that lets traders speculate on price movements without owning the underlying asset.Candlestick Chart - A charting method that displays open, high, low, and close prices as visual "candles."Carry Trade - A strategy that profits from the interest rate differential between two currencies.Commission - A fee charged by a broker per trade, separate from the spread.Copy Trading - A feature that allows traders to automatically replicate the trades of experienced traders.Correlation - The statistical relationship between the price movements of two currency pairs.Cross Currency Pair - A currency pair that does not include the US dollar (e.g., EUR/GBP).Currency Pair - Two currencies quoted together showing their exchange rate (e.g., EUR/USD).cTrader - A trading platform known for fast execution and advanced charting tools.
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Day Trading - A trading style where all positions are opened and closed within the same trading day.Demo Account - A practice trading account funded with virtual money for risk-free learning.Depth of Market (DOM) - A display showing the volume of buy and sell orders at different price levels.Divergence - When price moves in the opposite direction of a technical indicator, signaling a potential reversal.Drawdown - The peak-to-trough decline in account equity, expressed as a percentage.
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ECN (Electronic Communication Network) - A system that matches buy and sell orders directly between market participants.EUR/USD - The most traded currency pair globally, representing the euro against the US dollar.Equity - The total value of a trading account including unrealized profits and losses.Exchange Rate - The price of one currency expressed in terms of another currency.Exotic Pair - A currency pair that includes one major currency and one from an emerging economy.Expert Advisor (EA) - An automated trading program that runs on MetaTrader platforms.
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