Access all trading terms in Forex and technical analysis in one place. To get started, search for the term you have in mind.
A price level that prevents further decline; at this level, demand increases, and there is a higher chance of the price bouncing upward.
A price level that prevents further upward movement; this level can act as a point where the price trend shifts downward.
A zone where the probability of a trend reversal is higher than in other areas of the market. Standard support and resistance are always defined as zones rather than exact prices; these zones are known as PRZs.
A point where the direction of price movement changes. Pivots are used to identify trends, understand market structure, and draw support and resistance zones.
A line drawn by connecting pivot points to show the overall direction of the market. The higher the timeframe and the greater the number of valid touches, the more reliable the trendline becomes.
A moving average is an indicator used to identify the general direction of price over a specified period. By smoothing irregular fluctuations, it provides a clearer view of price trends.
An indicator used to detect overbought or oversold conditions. Traders use RSI to identify potential reversal zones, spot divergences, and assess trend strength.
An indicator used to measure trend strength and identify potential reversal zones. MACD uses moving averages to evaluate momentum, whether price movement is weakening or strengthening.
A tool used to measure volatility and identify periods of price compression or expansion. When the bands move closer together, the market is in a low-volatility or trading-range phase. As the distance between the bands increases, price volatility rises, and the market enters a more active phase.
Occurs when the price moves beyond a key level.
Valid breakout components:
After a breakout, the price often returns to retest the broken level before continuing its move.
Valid pullback components:
Volume shows the total number of executed buy and sell orders within a specific period. Higher volume indicates stronger buying or selling pressure within that candle.
The color of volume bars follows the candle color: green for bullish and red for bearish.
Show the value of one currency relative to another. The first currency in the pair is the base currency, and the second is the quote currency. The price of a currency pair indicates how much of the quote currency is needed to buy one unit of the base currency. For example, if EUR/USD is priced at 1.2000, it means you must pay 1.2000 USD to buy one euro.
A price level that prevents further upward movement; this level can act as a point where the price trend shifts downward.
The smallest unit of price movement in the Forex market. Profit and loss in trades are calculated based on the number of pips the price moves.
The difference between the bid price and the ask price. Spread is considered a trading cost, and its size varies depending on the account type and the chosen trading instrument.
A tool that allows traders to open positions much larger than their actual account balance. While leverage amplifies potential profits, it also increases potential losses. Using it requires precise risk management.
A portion of your account balance that the broker holds as collateral when you open a position. As long as the trade remains open, this amount is excluded from your free margin and cannot be used to open new positions.
A margin call occurs when your margin level drops to a point where your balance can no longer withstand further market fluctuations. In this situation, the broker alerts you to deposit additional funds or reduce the size of your open positions; otherwise, you may reach the stop-out level, leading to automatic position closure or liquidation.
A lot is the standard unit for measuring trade volume in Forex. One standard lot equals 100,000 units of the base currency. As trade size increases, the impact of each pip movement on profit and loss grows proportionally.
A predefined price level set by the trader. When the market reaches this level, the trade closes automatically to prevent further losses.
A predefined price level set by the trader to exit a profitable trade. Setting a take-profit level plays an important role in calculating the trade’s risk-to-reward ratio.
An agreement to buy or sell a commodity at a predetermined price on a specific date in the future. Futures are used for hedging, speculation, and price discovery.
The price at which a commodity is traded at the current moment. It serves as the benchmark for immediate (cash) transactions and reflects the asset’s real-time market value.
A market condition in which the futures price of a commodity is higher than its spot price. This typically occurs when storage, insurance, or carrying costs are high, or when the market expects prices to rise in the future.
A market condition where the spot price of a commodity is higher than its futures price. This often results from supply shortages, urgent demand, or reduced short-term availability, indicating that the current value of the commodity exceeds its expected future value.
The expenses associated with storing, insuring, and warehousing a commodity. These costs influence the final price of the asset.
The date on which a futures contract is settled. Settlement may occur through physical delivery of the commodity or through cash settlement. The delivery date marks the final fulfillment of the contract obligations.
The date on which a futures contract becomes invalid. After expiry, the trader must choose between settling, delivering, or rolling over the contract, as it enters the mandatory settlement phase.
The degree and speed of price fluctuations within a given period. Higher volatility indicates wider price swings and increased market risk.
The ease and speed with which an asset can be bought or sold. Higher liquidity means the asset can be converted to cash more quickly and with less price impact.
A risk-management strategy in which a trader opens an opposite position to reduce or offset the risk of an existing trade.
The total value of a company in the stock market, calculated by multiplying the current share price by the total number of outstanding shares.
A portion of a company’s profits is distributed annually to its shareholders.
A measure of a company’s profitability. EPS indicates how much profit shareholders receive per share at the end of a financial period (usually annually). Higher EPS reflects stronger profitability.
A valuation metric that shows how much investors are willing to pay for a company’s earnings. It is calculated by dividing the share price by the earnings per share.
Example:
Share price: 100
EPS: 20
P/E = 100 ÷ 20 = 5
Market price: 115
A P/E of 5 means the market is willing to pay 5 times the annual earnings for one share.An order placed at a specific price different from the current market price. It is executed only if the market reaches the specified price.
An order that is executed immediately based on the best available buy or sell price at the moment.
The degree of price fluctuation of a stock within a specific period. Higher volatility indicates greater risk.
Shares of large, profitable companies with stable long-term performance and lower risk for investors.
The process through which a company offers its shares to the public for the first time. IPOs typically attract high liquidity, as newly listed stocks often show strong early demand and growth potential.
A call option is a contract that gives the buyer the right to purchase an asset at the strike price. If the market price rises above the strike price in the future, the buyer profits by purchasing the asset at a lower price.
If the market moves downward, the buyer only loses the premium paid.
A put option is a contract that gives the buyer the right to sell an asset at the strike price. If the market price drops below the strike price in the future, the buyer profits by selling the asset at a higher price.
If the market moves upward, the buyer only loses the premium.
The predetermined price at which the asset can be bought or sold in an options contract. This price does not have to match the current market price.
The date after which an options contract becomes invalid. All buy or sell decisions must be made before this date; otherwise, the contract expires and loses its value.
The cost paid by the buyer to obtain the right to buy or sell (call or put). This amount is non-refundable, even if the option is not exercised.
An option’s price consists of intrinsic value plus time value.
The market’s expectation of how much the asset’s price may fluctuate in the future. Higher implied volatility increases the price of an option.
Represents the option’s real value at the current moment. It is calculated as the difference between the market price and the strike price.
Example:
Strike price: 100
Market price: 115
Intrinsic value = 15
Market price: 115
This means the contract has positive intrinsic value.The portion of an option’s price that reflects the time remaining until expiration and expected market volatility.
Example: If you hold a call option with a strike of 100 and the market is currently at 70, the intrinsic value is zero. However, due to future volatility, the price may rise above the strike before expiration, giving the option time value. As expiration approaches, this time value decreases and reaches zero at expiry.
Delta measures how much the price of an option will change if the underlying asset’s price moves by one unit. Higher delta means the option reacts more strongly to market price changes and moves more closely with the underlying asset.
Theta measures the rate at which an option’s time value decays. The closer the option gets to expiration, the faster this time decay occurs.
A put option is a contract that gives the buyer the right to sell an asset at the strike price. If the market price drops below the strike price in the future, the buyer profits by selling the asset at a higher price.
If the market moves upward, the buyer only loses the premium.
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