Risk
#position-size
Position Size
Position size is the amount of a market, asset, lot size, contract size, or unit size taken on a trade. It should be based on risk, account size, stop-loss distance, and instrument specifications.
📖 Trading Glossary
Trading terms explained clearly.
A practical glossary for traders learning forex, funded accounts, risk management, technical analysis, Fibonacci, execution, and trading psychology.
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Risk
#risk-per-trade
Risk Per Trade
Risk per trade is the amount of capital a trader is willing to lose if a single trade fails. Serious traders usually define this before entering the market.
Risk
#risk-reward-ratio
Risk / Reward Ratio
Risk/reward ratio compares the potential loss on a trade against the potential gain. For example, risking 1 to make 2 creates a 1:2 risk/reward profile.
Risk
#r-multiple
R-Multiple
R-multiple expresses trade performance in relation to the amount risked. A +2R trade made twice the original risk, while a -1R trade lost the planned risk.
Risk
#stop-loss
Stop Loss
A stop loss is a pre-planned exit level used to limit risk if the market moves against the trade. It is one of the most important risk-control tools in trading.
Risk
#take-profit
Take Profit
A take-profit level is a planned exit point where a trader intends to close a trade for profit if the market reaches the target.
Risk
#drawdown
Drawdown
Drawdown is the decline from an account high to a lower balance or equity level. It measures how much capital has been lost from a previous peak.
Risk
#max-drawdown
Maximum Drawdown
Maximum drawdown is the largest allowed or recorded loss from a high point. In funded trading, breaching max drawdown can result in account failure.
Funding
#trailing-drawdown
Trailing Drawdown
Trailing drawdown is a loss limit that moves upward as the account grows, usually until it reaches a lock point. Traders must understand how it is calculated before trading funded accounts.
Funding
#daily-loss-limit
Daily Loss Limit
Daily loss limit is the maximum amount an account may lose in a trading day. In funded trading, breaching this rule can lead to account failure.
Funding
#funded-account
Funded Account
A funded account gives a trader access to trading capital under defined rules, limits, payout terms, and risk controls set by the funding provider.
Funding
#evaluation
Evaluation
An evaluation is a trading assessment where a trader must meet profit targets and risk rules before becoming eligible for a funded account.
Funding
#instant-funding
Instant Funding
Instant funding allows a trader to begin with a funded account without completing a traditional evaluation phase first, subject to specific rules and drawdown limits.
Funding
#profit-target
Profit Target
A profit target is the amount of profit a trader must reach to complete an evaluation phase or planned trade objective.
Funding
#consistency-rule
Consistency Rule
A consistency rule limits how much of a trader’s total profit can come from one outsized trading day. It is designed to encourage stable trading behaviour.
Execution
#pip
Pip
A pip is a standard unit of price movement in forex. Pip size depends on the currency pair and quote format.
Execution
#pip-value
Pip Value
Pip value is the money value of a one-pip movement for a given position size. It helps traders calculate risk and potential reward in forex trades.
Execution
#lot-size
Lot Size
Lot size refers to the standardized trading volume used by a broker or platform. In forex, one standard lot typically represents 100,000 units of the base currency.
Execution
#spread
Spread
Spread is the difference between the bid and ask price. It is a trading cost and can affect entries, exits, stop placement, and short-term strategy performance.
Execution
#slippage
Slippage
Slippage occurs when an order is filled at a different price than expected. It can happen during volatile markets, news events, or low-liquidity conditions.
Execution
#leverage
Leverage
Leverage allows traders to control a larger market position with a smaller amount of margin. It can amplify both gains and losses.
Execution
#margin
Margin
Margin is the amount of capital required to open or maintain a leveraged position. Margin requirements vary by market, platform, broker, and account type.
Technical Analysis
#candlestick
Candlestick
A candlestick displays price movement over a chosen time period, typically showing open, high, low, and close. Candlesticks help traders read market behaviour.
Technical Analysis
#wick
Wick
A wick is the thin line above or below a candlestick body, showing price rejection, volatility, or movement beyond the open and close.
Technical Analysis
#support
Support
Support is a price area where buying interest may appear and slow or reverse a decline. It is not a guarantee that price will hold.
Technical Analysis
#resistance
Resistance
Resistance is a price area where selling pressure may appear and slow or reverse an advance. Traders use it as part of market structure analysis.
Technical Analysis
#market-structure
Market Structure
Market structure describes how price forms highs, lows, trends, ranges, breaks, and shifts. It helps traders understand context before planning entries.
Technical Analysis
#higher-high
Higher High
A higher high occurs when price creates a peak above the previous significant high. It can be part of an uptrend structure.
Technical Analysis
#lower-low
Lower Low
A lower low occurs when price creates a low beneath the previous significant low. It can be part of a downtrend structure.
Technical Analysis
#trend
Trend
A trend is a directional market movement. Uptrends generally form higher highs and higher lows, while downtrends form lower lows and lower highs.
Technical Analysis
#breakout
Breakout
A breakout occurs when price moves beyond a key support, resistance, range, or structure level. Traders should confirm context before acting on breakouts.
Technical Analysis
#fibonacci-retracement
Fibonacci Retracement
Fibonacci retracement uses percentage levels to measure potential pullback areas within a larger market move. It is often used with trend and structure analysis.
Technical Analysis
#fibonacci-extension
Fibonacci Extension
Fibonacci extension levels are used to project possible target areas beyond the original price swing. They can support trade planning and target selection.
Technical Analysis
#confluence
Confluence
Confluence occurs when multiple independent pieces of analysis point toward the same area or idea. It can strengthen a trading plan but does not remove risk.
Psychology
#trading-plan
Trading Plan
A trading plan is a written framework that defines strategy, risk, rules, setups, execution process, review habits, and when not to trade.
Psychology
#trading-journal
Trading Journal
A trading journal records trades, decisions, emotions, mistakes, screenshots, and lessons. It helps traders identify patterns and improve over time.
Psychology
#revenge-trading
Revenge Trading
Revenge trading happens when a trader tries to quickly win back losses through emotional or impulsive trades. It is one of the most dangerous habits in trading.
Psychology
#overtrading
Overtrading
Overtrading means taking too many trades, often from impatience, boredom, emotional pressure, or lack of rules. It can damage discipline and account performance.
Psychology
#discipline
Discipline
Discipline is the ability to follow a trading plan, respect risk limits, avoid emotional decisions, and accept that not every market condition requires a trade.
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