The 100 Most Important Trading Terms

Alphabetically sorted list with the 100 most important trading terms (related to MetaTrader MT4/MT5, CFDs, Expert Advisors, indicators, charts, templates, order types, stops, trailing, breakeven, pips/points, spread, slippage, swap, etc.) and short explanations:

1. Arbitrage
   Exploiting price differences of the same asset in different markets or contracts for risk-free profit.
2. Ask Price
   The price at which the market (broker) is willing to sell – traders buy at the ask.
3. Order Size
   The volume of an order, often in lots in Forex, or contract units in CFDs.
4. Order Book
   Overview of all open limit and stop orders in a market segment.
5. Execution Type
   The type of order execution, e.g. “Instant Execution” or “Market Execution”.
6. Average True Range (ATR)
   A volatility indicator that measures the average trading range over a period.
7. Backtesting
   Testing a trading strategy using historical price data in the Strategy Tester.
8. Base Currency
   The first currency listed in a currency pair (e.g. EUR in EUR/USD).
9. Bear Market
   Market environment with predominantly falling prices and pessimistic sentiment.
10. Beta
    Measure of an asset’s volatility compared to the overall market.
11. Bid Price
    The price at which the market (broker) is willing to buy – traders sell at the bid.
12. Bollinger Bands
    Volatility channel around a moving average (typically ±2 standard deviations).
13. Breakeven Point
    The price level at which a trade shows neither profit nor loss.
14. Breakout
    A price move breaking out of a chart formation (e.g. range, triangle).
15. Broker
    Intermediary between trader and interbank market; provides trading platform and accounts.
16. Broker Server
    The broker’s technical infrastructure that receives and executes orders.
17. Carry Trade
    Exploiting interest rate differences between two currencies by going long on the higher-yielding currency.
18. CFD (Contract for Difference)
    Derivative that reflects the price difference of an asset without physical ownership.
19. Chart
    Graphical representation of price movements, e.g. line, bar, or candlestick charts.
20. Chart Analysis
    Technical analysis of price movements with patterns, lines, and indicators.
21. Chart Pattern
    Formations like head-and-shoulders, triangle, or flag that signal targets or reversals.
22. Closing Price
    The last price of a period (candle/bar).
23. Confirmation
    A second indicator or price action confirms a signal.
24. Correlation
    Statistical measure (-1 to +1) of how two assets move in relation to each other.
25. Cross Pair
    A currency pair without the USD as a reference (e.g. EUR/GBP).
26. Custom Indicator
    A user-programmed indicator in MQL4/MQL5.
27. Daily Candle
    A candlestick that shows the price movement of one trading day.
28. Delta
    An option measure (0–1) indicating how the option price changes relative to the underlying asset.
29. Derivative
    A financial instrument whose value is derived from an underlying asset (e.g. CFD, option, future).
30. Depth of Market (DOM)
    Display of liquidity available at different price levels.
31. Divergence
    Discrepancy between indicator and price action, often a reversal signal.
32. Drawdown
    Decline from the last equity peak to the following trough, in % or absolute terms.
33. ECN (Electronic Communication Network)
    A network that matches orders directly between participants, without a dealing desk.
34. Equity
    Account balance plus/minus unrealized profit/loss of open positions.
35. Equity Stop
    An automatic stop-loss based on a maximum equity loss.
36. Execution Delay
    Time between order placement and actual execution.
37. Expert Advisor (EA)
    An automated trading robot in MQL4/MQL5 that executes strategies independently.
38. Expiration
    Date on which a derivative (option, future) expires.
39. Fibonacci Retracement
    Horizontal lines at 23.6%, 38.2%, 61.8% to identify pullback levels.
40. Forex (Foreign Exchange)
    The global currency market where currencies are traded.
41. Free Margin
    Available funds in the account not tied up as margin.
42. Fundamental Analysis
    Assessment of assets based on economic, financial, and political data.
43. Gap
    Price gap when the opening price is above/below the prior closing price.
44. Moving Average (MA)
    Indicator that smooths prices over a specific period.
45. Grid Trading
    Strategy placing buy/sell orders at fixed intervals.
46. Hedging
    Risk mitigation by holding offsetting positions.
47. High
    Highest price of a period (candle/bar).
48. High-Frequency Trading (HFT)
    Algorithmic trading with very high transaction speed and short holding times.
49. Ichimoku Kinko Hyo
    Multi-component indicator with Tenkan, Kijun, Senkou Span lines and cloud.
50. Initial Margin
    Required collateral to open a position.
51. Correlation (again)
    Describes how closely two markets/instruments move together (positive/negative).
52. Account Size
    Total capital available in a trading account.
53. Price
    Current trading price of an asset.
54. Leverage
    Ratio between trading volume and own capital.
55. Limit Order
    Order executed only at the specified or better price.
56. Liquidity
    Measure of how easily an asset can be traded without large slippage.
57. Lot
    Standard trade size; 1 lot = 100,000 units of the base currency in Forex.
58. Long Position
    Buying an asset in anticipation of rising prices.
59. MACD (Moving Average Convergence Divergence)
    Trend-following oscillator based on moving averages and signal line.
60. Margin
    Collateral required to open a leveraged position.
61. Margin Call
    Warning that free equity has dropped below a threshold; positions may be closed.
62. Market Maker
    Broker model where the broker itself acts as counterparty to trades.
63. Market Order
    Immediate execution at the best available price.
64. Momentum
    Indicator measuring the speed of price movement.
65. NAV (Net Asset Value)
    Net asset value of a fund or portfolio per share.
66. News Trading
    Strategy based on market reactions to economic news.
67. Open Price
    First traded price of a new period.
68. Overbought
    Condition indicating excessive buying pressure (e.g. RSI > 70).
69. Oversold
    Condition indicating excessive selling pressure (e.g. RSI < 30).
70. Pending Order
    Order that is activated when a specific price level is reached (limit/stop).
71. Pip
    Smallest price change in Forex (usually 0.0001) or a CFD tick.
72. Position Sizing
    Determining trade volume based on risk and money management rules.
73. Profit Factor
    Ratio of gross profits to gross losses of a strategy.
74. Quote Currency
    The second currency in a pair (e.g. USD in EUR/USD).
75. Range
    Sideways movement between support and resistance levels.
76. Realized Profit/Loss
    Actual profit/loss from closed positions.
77. Resistance
    Price level where selling pressure is expected, often halting rallies.
78. Risk Management
    Rules and techniques to limit losses and protect capital.
79. Rollover
    Carrying a position overnight with interest adjustment (swap).
80. Scalping
    Short-term strategy with very quick entries and exits capturing small moves.
81. Session
    Trading hours of major markets (e.g. London, New York, Tokyo).
82. Sharpe Ratio
    Return/risk measure (excess return divided by volatility).
83. Short Position
    Selling an asset in anticipation of falling prices.
84. Slippage
    Difference between expected and actual execution price, especially in high volatility.
85. Spread
    Difference between ask and bid price; main cost factor in Forex/CFDs.
86. Stop-Loss
    Automatic order that closes a position when a set loss level is reached.
87. Stop Order
    Pending order triggered when a price level is exceeded (stop-buy/stop-sell).
88. Strategy Tester
    MT tool for backtesting and optimizing Expert Advisors.
89. Swap
    Interest adjustment applied when holding a position overnight.
90. Take Profit
    Automatic order that closes a position when a set profit target is reached.
91. Technical Analysis
    Chart and indicator study to forecast future price movements.
92. Template
    Saved chart configuration (colors, indicators, timeframes) reusable on other charts.
93. Tick
    Smallest possible price change; in Forex = pip, in stocks = cent.
94. Time and Sales
    Log of all executed trades with time and price.
95. Timeframe
    Time interval of a candlestick or bar (e.g. M1, H1, D1).
96. Trailing Stop
    Dynamic stop-loss that follows price by a set distance to lock in profits.
97. Trend
    Direction of price movement over a defined period (up, down, sideways).
98. Trendline
    Straight line connecting highs or lows, visually showing a trend.
99. Turnover
    Total traded volume of contracts or currencies within a period.
100. Volatility
     Measure of price fluctuation intensity; basis of many risk and options models.