Key Terms:

  • PIP – Point in Percentage (0.0001)

  • Position Size – The leverage you use for a position (10,000, 20,000, 30,000)

  • Candle – The body of the full candlestick

  • Wick – The highest and lowest point of a time frame

  • Base Currency

  • CFD – Contract for difference

  • Margin – The amount of money you need to place a trade

  • Margin Call – When your equity drops below a certain amount

  • Market Order – Entering the market at the current rate

  • Entry Order – Entering the market at a rate of your choosing

  • Leverage – The amount of money the broker is putting into your account (400:1 generally speaking)

  • Volume – The position size you take

  • Contract Size – The position size of a CFD

  • Long/Buy – Buy position

  • Short/Sell – Sell position

  • Spread – The brokerage fee

  • Slippage – When the market opens at a different rate to the close from Friday to Monday

  • Swaps – The overnight fees

  • Stop Loss – Where your trade will close at a loss

  • Take Profit – Where your trade will close at a profit

  • Consolidation – The market is trending sideways

  • Bullish – Positive view

  • Hawkish – Positive view

  • Bearish – Negative View

  • Dovish – Negative View

  • Sentiment – Overall direction of the market

  • Technical Analysis – Interpreting the charts and candlestick patterns

  • Fundamental Analysis – The news, global economy

  • Negative Trend – The price is moving lower

  • Positive Trend – The price is moving higher

  • Ascending Wedge – The price is moving higher in a narrowing band

  • Descending Wedge – The price is moving lower in a narrowing band

  • Pull Back – When the market has a correction from a large move

  • Support – A key level below the market price

  • Resistance – A key level above the market price

  • Break Out – When the price breaks below or above a support or resistance level

  • Cable – The GBP

  • Greenback – The USD

  • Hedge – Placing the same trade in the opposite direction

  • Handle – A key level on the charts

  • Kiwi – The NZD

  • Loonie – The CAD

  • Liquidation – You do not have sufficient equity to hold positions

  • Liquidity – The amount of money in circulation