ADX
Average Directional Index. Measures trend strength on a 0 to 100 scale. Above 25 suggests a real trend; below 20 suggests range. Doesn't tell you direction, only conviction.
Trader's reference The forex
The forex
glossary.
202 essential trading terms defined in plain English. From pip and lot to order block and FVG. Filter by category, search, or browse alphabetically.
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A5 terms
Ascending Triangle
Flat horizontal resistance with a rising lower trendline. Buyers push higher each time; sellers cap at the same level. Usually breaks upward.
Asian Session
The forex trading session covering Tokyo, Singapore, and Sydney activity, roughly 6 PM to 3 AM ET. Generally the lowest-volatility session.
Ask Price
The price at which you can buy the base currency in a pair. Always slightly higher than the bid; the difference is the spread.
ATR
Average True Range. Measures average price movement over N candles. Used to size stops and targets relative to current volatility. Wider ATR = wider stops.
B17 terms
Bank of England (BOE)
The UK central bank. Rate decisions and Monetary Policy Reports move GBP pairs sharply; the Governor's tone is watched as closely as the rate itself.
Bank of Japan (BOJ)
The Japanese central bank. Famous for ultra-low rates and yield-curve control. Surprise policy shifts can move JPY pairs hundreds of pips in minutes.
Base Currency
The first currency listed in a pair (EUR in EUR/USD). The pair's price tells you how much quote currency it takes to buy one unit of the base.
Bear Flag
A short consolidation that slopes slightly upward inside a downtrend. Breakdown out of the flag continues the prior leg lower.
Bearish
Expecting price to fall. A bearish candle closes below its open; a bearish market makes lower highs and lower lows.
Bid Price
The price at which you can sell the base currency. Always slightly lower than the ask; the difference is the spread.
Body (of a candle)
The thick rectangle between a candle's open and close. Indicates the net move during that time period.
Bollinger Bands
A middle moving average plus upper and lower bands set at standard deviations above and below. Bands expand with volatility and contract during consolidation.
Break Even Stop
Moving your stop loss to the entry price once a trade is moderately in profit. Locks in a no-loss outcome while you let the winner run.
Break of Structure (BOS)
When price closes through the most recent swing high (uptrend) or swing low (downtrend). Confirms the existing trend rather than reverses it.
Breakout
When price closes through a previous support or resistance level. A real breakout is confirmed by the candle close, not just a wick.
Broadening Wedge
Higher highs and lower lows that fan out from each other. Reflects rising volatility and indecision. Often resolves with a strong directional move.
Bull Flag
A short consolidation that slopes slightly downward inside an uptrend. Breakout from the flag typically continues the prior leg higher.
Bullish
Expecting price to rise. A bullish candle closes above its open; a bullish market makes higher highs and higher lows.
Buy Limit
An order to buy at a specific price below the current market. Used to buy a pullback into support.
Buy Stop
An order to buy at a specific price above the current market. Used to enter on a breakout.
Buyside Liquidity
Resting buy-stop orders sitting above a swing high. Price often runs into them before reversing, because stops trigger entries that fuel the move.
C16 terms
Candlestick
A chart bar showing the open, high, low, and close of a single time period. Body color indicates whether the period closed up (bullish) or down (bearish).
Carry Trade
Borrowing in a low-rate currency to buy a higher-rate one, pocketing the interest differential. Profitable in calm markets, brutal in volatile ones.
CCI
Commodity Channel Index. Measures how far price has deviated from its statistical mean. Readings above +100 suggest overbought, below -100 oversold.
Central Bank
A nation's monetary authority (Federal Reserve, ECB, Bank of Japan). Sets interest rates and money supply; its decisions move currency markets.
Challenge / Evaluation
A prop firm's audition. You trade a demo account to specific profit targets without violating drawdown rules. Pass and you get a funded account.
Change of Character (CHoCH)
When price breaks the prior swing structure in the opposite direction of the trend. Often the first signal of a potential reversal before BOS confirms it.
Commission
A flat fee per lot that some brokers charge in addition to (or instead of) a spread. ECN-style accounts typically have tight spreads but charge commission.
Confluence
When multiple independent factors agree on a level or direction. The more confluence (S&R, trendline, fib, session timing), the stronger the setup.
Consistency Rule
A prop firm restriction capping the share of total profit any single day can contribute (often 30 to 50%). Forces traders to build profit over many days, not one outlier.
Consolidation
A period of sideways price action between defined levels. Often precedes a breakout. The longer the consolidation, the bigger the eventual move.
Consumer Confidence
Survey-based gauge of household sentiment about the economy and personal finances. Rising confidence supports the currency by signalling spending and growth.
Continuation Pattern
A chart pattern (flag, pennant, triangle) that resumes the prior trend after a brief pause. Less reliable than reversal patterns, easier to trade.
CPI
Consumer Price Index. A measure of inflation. Higher-than-expected CPI typically strengthens the currency because it implies central bank rate hikes.
Cross Pair
Any pair that doesn't include USD (EUR/GBP, AUD/JPY). Wider spreads than majors.
Cup and Handle
A rounded bottom (the cup) followed by a small downward consolidation (the handle), then a breakout. Bullish continuation; classic on weekly and daily charts.
Currency Pair
Two currencies quoted together (EUR/USD, GBP/JPY). Trading forex always means trading one currency relative to another.
D15 terms
Daily Drawdown
A prop firm rule capping your maximum loss in any single trading day, usually 5% of account size. Breaching it ends your challenge.
Dark Cloud Cover
A two-candle bearish reversal. A strong bullish candle, then a bearish candle that opens above the prior high and closes below the prior candle's midpoint.
Demo Account
A practice account funded with virtual money on a broker's live price feed. Useful for testing execution and strategy without capital risk. Doesn't simulate slippage perfectly.
Descending Triangle
Flat horizontal support with a falling upper trendline. Sellers push lower each time; buyers defend the same level. Usually breaks downward.
Diamond Top
A rare reversal pattern resembling a diamond shape after an uptrend. Combines broadening then narrowing structure. Confirmed by a breakdown of the lower edge.
Divergence
When price and an indicator (RSI) move in opposite directions. Often signals trend exhaustion before a reversal.
Doji
A candle with virtually no body. Open and close are nearly equal. Indicates indecision at a key level.
Donchian Channel
An envelope made of the highest high and lowest low over N candles. Classic breakout system: buy a new N-high, sell a new N-low.
Double Bottom
A reversal pattern with two roughly equal lows separated by a peak. Confirmed when price closes above the middle peak (the neckline).
Double Top
A reversal pattern with two roughly equal highs separated by a trough. Confirmed when price closes below the middle trough (the neckline).
Dovish
Central bank language signalling lower rates, slower hikes, or stimulus. Typically weakens the currency because lower rates attract less capital.
Dragonfly Doji
A doji with a long lower wick and no upper wick. Found at bottoms; reflects intraday selling fully rejected by buyers. Bullish at support.
Drawdown
The peak-to-trough decline in your account equity. A 10% drawdown means you lost 10% from your highest point.
Drawdown Reset
Some prop firms allow you to reset a busted challenge for a fee, restarting from zero with the same rules. Cheaper than buying a new challenge slot.
DXY (Dollar Index)
Measures USD against a basket of six currencies (EUR, JPY, GBP, CAD, SEK, CHF). Strong DXY usually means weak EUR/USD and weak gold.
E9 terms
ECB
European Central Bank. Sets monetary policy for the Eurozone. Rate decisions plus the press conference 45 minutes later are the highest-impact EUR events.
ECN Broker
An Electronic Communication Network broker that routes your order directly to liquidity providers. Tight spreads, transparent execution, usually with a per-lot commission.
Economic Calendar
A schedule of upcoming high-impact news events (CPI, NFP, central bank rate decisions). Pros check it every morning to avoid trading during volatile releases.
EMA
Exponential Moving Average. Weights recent prices more heavily than older ones. Reacts faster than the SMA. The 20 and 50 EMAs are common dynamic support/resistance.
Engulfing Candle
A candle whose body fully covers the prior candle's body. Bullish engulfing at support and bearish engulfing at resistance are strong reversal signals.
Equal Highs / Equal Lows
Two or more swing points at nearly the same price. They mark obvious liquidity above (equal highs) or below (equal lows) that price often sweeps before reversing.
Equity
The current value of your trading account including open profits and losses. Different from balance, which only updates when a trade closes.
Evening Star
A three-candle bearish reversal at the top of an uptrend. Strong bullish candle, then a small-bodied indecision candle, then a strong bearish candle. Reliable at resistance.
Exotic Pair
A pair involving an emerging-market currency (USD/TRY, USD/ZAR). High spreads, high volatility, high risk. Avoided by most retail traders.
F9 terms
Fair Value Gap (FVG)
A three-candle pattern where the middle candle's range leaves a gap between the wicks of the first and third. Price often revisits the gap to rebalance before continuing.
Fakeout
A failed breakout. Price pokes above resistance or below support but closes back inside the range. Often engineered to trap retail breakout traders.
Falling Wedge
Lower highs and lower lows converging into a narrowing slope down. Despite the bearish slope, usually resolves with a bullish breakout.
Fibonacci Retracement
A tool that maps potential pullback levels (38.2%, 50%, 61.8%, 78.6%) on a prior swing move. Used to find entries during trends.
FOMC
Federal Open Market Committee. The Federal Reserve's policy-setting body. Their rate decisions and press conferences are the most impactful USD events.
Forex
Foreign exchange. The global market where currencies trade against each other. Decentralized, open 24/5, average daily volume over $7 trillion.
Funded Account
An account you trade with the prop firm's capital, not your own. You keep a percentage of profits (the profit split).
Funded Phase
The stage after you pass evaluation: you trade real or simulated capital under live conditions, with payouts every 2 to 4 weeks if you stay rule-compliant.
Funded Trader
A trader who has passed a prop firm's evaluation and is trading the firm's capital. Required to follow rules for ongoing access.
G3 terms
GDP
Gross Domestic Product. The total value of goods and services a country produces in a quarter. Stronger-than-expected GDP typically strengthens the currency.
Gravestone Doji
A doji with a long upper wick and no lower wick. Found at tops; reflects intraday buying fully rejected by sellers. Bearish at resistance.
GTC (Good Till Cancelled)
An order that remains active until it fills or you cancel it manually. Useful for setting pending limits days in advance without daily re-entry.
H10 terms
Hammer
A bullish reversal candle with a small body at the top and a long lower wick. Forms at the bottom of a downtrend; shows aggressive buying off a low.
Hanging Man
Same shape as a hammer (small body, long lower wick) but appearing at the top of an uptrend. Warns of potential reversal; needs bearish confirmation.
Harami
A two-candle pattern where a small candle is fully contained within the prior larger candle's body. Signals trend weakness or pause; not a strong standalone signal.
Hawkish
Central bank language signalling higher rates, faster hikes, or tightening. Typically strengthens the currency because higher rates attract capital.
Head and Shoulders
A reversal pattern with three peaks, the middle peak (head) being the highest. A break of the "neckline" connecting the two valleys confirms the reversal.
Hedging
Opening an offsetting position to neutralize risk on an existing trade. Banned by most US brokers and many prop firms; allowed in some international accounts.
Heikin Ashi
A modified candle type that averages each candle's OHLC with the prior, producing smoother trends. Useful for visual trend reading; not for precise entries.
High Wave Candle
A candle with a small body and long wicks on both sides. Reflects high volatility plus indecision. Often appears at potential turning points.
Higher High (HH)
A new peak above the previous peak. Defines an uptrend in market structure.
Higher Low (HL)
A pullback bottom that's higher than the previous pullback. Combined with HH, confirms an uptrend.
I8 terms
Ichimoku Cloud
A five-line indicator that shows trend, momentum, and support/resistance at a glance. The cloud (kumo) acts as a dynamic zone; price above is bullish, below bearish.
Imbalance
A zone where price moved aggressively in one direction, leaving little overlap between candles. Markets often return to fill imbalances before continuing.
Industrial Production
Monthly measure of output from factories, mines, and utilities. Bellwether for economic strength; strong prints support the currency.
Inside Bar
A candle whose entire range is contained within the previous candle's range. A consolidation signal; often precedes a breakout in either direction.
Instant Funded
A prop firm product that skips the evaluation. You pay a higher fee upfront and trade live capital immediately, usually with tighter drawdown rules.
Interest Rate
The cost of borrowing money in a currency, set by the central bank. Higher rates strengthen a currency (carry trade demand).
Inverse Head and Shoulders
A bullish reversal: three troughs with the middle one deepest. A close above the neckline confirms the reversal of a downtrend.
Inverted Hammer
A small-bodied candle with a long upper wick at the bottom of a downtrend. Hints at reversal; needs a strong follow-through candle to confirm.
L11 terms
Leverage
Trading with borrowed capital. 1:100 leverage means $1,000 controls $100,000 of currency. Amplifies both gains and losses.
Limit Order
An order to enter at a specific price or better. Won't fill at a worse price than specified.
Liquidity
How easily an asset can be bought or sold without moving the price. Major pairs during the London-NY overlap have the highest liquidity.
Liquidity Sweep
A quick wick or candle that takes out an obvious high or low, triggers resting stops, then reverses. Common at session opens and around equal highs/lows.
Liquidity Void
A range of price where almost no trading happened on the way down (or up). Price often retraces back through the void quickly because there's no resistance inside it.
London Session
Roughly 3 AM to 12 PM ET. The most volatile session globally; sets the tone for EUR, GBP, and CHF moves.
Long Position
A trade that profits if price rises. You buy now intending to sell higher later. "Going long" = buying.
Long-Legged Doji
A doji with long wicks on both ends. Even more pronounced indecision than a regular doji. Carries weight at major levels, not in mid-range chop.
Lot
A standardized trade size. Standard lot = 100,000 base currency units. Mini lot = 10,000. Micro lot = 1,000.
Lower High (LH)
A bounce peak lower than the previous peak. Defines a downtrend in market structure.
Lower Low (LL)
A new bottom below the previous bottom. Combined with LH, confirms a downtrend.
M13 terms
MACD
Moving Average Convergence Divergence. Plots the difference between two EMAs plus a signal line. Used for momentum shifts and divergence against price.
Major Pair
A currency pair involving USD plus another G10 currency (EUR/USD, GBP/USD, USD/JPY, AUD/USD, USD/CAD, USD/CHF, NZD/USD). Tightest spreads.
Margin
The collateral required by your broker to open a leveraged position. With 1:100 leverage, you need 1% of position size as margin.
Margin Call
A broker demand to deposit more funds because your equity has fallen too close to required margin. Ignoring it triggers position liquidation.
Margin Level
Equity divided by used margin, expressed as a percentage. Below 100% means open positions are at risk of forced closure.
Market Order
An order to buy or sell at the current market price immediately. Fills instantly but at whatever bid/ask is live at execution.
Marubozu
A candle with a full body and no (or barely any) wicks. Reflects total dominance by one side. Strong continuation signal in the direction of the candle.
Max Drawdown
A prop firm's hard limit on total account loss from the starting balance or highest equity. Hit it and you lose the account permanently.
MFI
Money Flow Index. RSI weighted by volume. Reads overbought above 80 and oversold below 20. Stronger signal than RSI when divergence appears.
Mitigation Block
The last candle (or zone) before a strong move that broke structure. Price often returns to "mitigate" the unfilled order, then continues the trend.
Morning Star
A three-candle bullish reversal at the bottom of a downtrend. Strong bearish candle, then a small indecision candle, then a strong bullish candle. Reliable at support.
Moving Average (MA)
A line plotting average price over a defined period (20, 50, 200). Common reference for dynamic support/resistance and trend direction.
Multi-Timeframe Analysis
Reading the same chart on multiple timeframes (Daily, 4H, 1H) to align bias from higher to lower frames. The pro standard for entry timing.
N2 terms
New York Session
Roughly 8 AM to 5 PM ET. The most-traded forex hours when overlapping with London (8 to 11 AM ET). Highest volume and best for institutional setups.
Non-Farm Payrolls (NFP)
Monthly US jobs report released the first Friday of each month. The highest-impact USD news event; can move major pairs 100+ pips in seconds.
O3 terms
OCO Order
One Cancels the Other. A paired order where filling one (e.g. take profit) automatically cancels the other (e.g. stop loss). Standard exit mechanism on most platforms.
Order Block
The last opposite-coloured candle before a sharp move that broke structure. Treated as a zone where institutions placed orders; price often returns to retest it.
Outside Bar
A candle whose range fully engulfs the prior candle's range (higher high AND lower low). High volatility, often at turning points; direction depends on the close.
P22 terms
Parabolic SAR
Stop And Reverse. Plots a dot above or below each candle that flips sides when the trend changes. Useful for trailing stops in strong trends, noisy in ranges.
Partial Close
Closing a portion of an open position (often half) to lock in some profit while letting the rest run with a moved stop. Standard scaling-out tactic.
Payout
The amount paid to a funded trader from accumulated profits. Most firms pay weekly, biweekly, or monthly, and require a minimum profit before the first payout.
PCE
Personal Consumption Expenditures. The Fed's preferred inflation gauge, broader than CPI. Hotter PCE pushes the Fed toward higher rates and strengthens USD.
Pending Order
Any order that won't execute until price reaches a specific level. Includes Buy Limit, Buy Stop, Sell Limit, Sell Stop.
Pennant
A short symmetrical triangle that forms after a sharp move (the "flagpole"). Continuation pattern; breakout from the pennant usually resumes the original direction.
Piercing Line
A two-candle bullish reversal. Strong bearish candle, then a bullish candle that opens below the prior low and closes above the prior candle's midpoint.
Pin Bar
A candle with a small body and a long wick rejecting a level. Long lower wick at support is bullish; long upper wick at resistance is bearish.
Pip
The standard unit of price change in forex. For most pairs, the 4th decimal (0.0001). For JPY pairs, the 2nd decimal (0.01).
Pip Value
The dollar value of one pip of movement on your trade size. For a standard lot on EUR/USD, one pip ≈ $10. Pip value is what links pip distance to dollar risk.
Pipette
One-tenth of a pip. The 5th decimal on most pairs (0.00001). Modern brokers quote in pipettes for tighter spreads.
Pivot Points
Daily, weekly, or monthly support/resistance levels calculated from the prior period's high, low, and close. Widely watched by intraday traders.
PMI
Purchasing Managers' Index. Survey of business conditions across manufacturing or services. Above 50 = expansion; below 50 = contraction. Leading economic indicator.
Position Sizing
The calculation of how many lots to trade based on account risk and stop distance. Formula: (Account × Risk%) ÷ (Stop pips × Pip value).
PPI
Producer Price Index. Measures wholesale-level inflation before it reaches consumers. Often a leading indicator of CPI.
Premium and Discount
Splitting a price range in half: the upper half is "premium" (overvalued, prefer shorts), the lower half is "discount" (undervalued, prefer longs). Pulled from ICT methodology.
Profit Cap
A ceiling some prop firms put on monthly profit before a mandatory withdrawal cycle. Caps both your payout and the firm's exposure.
Profit Split
The percentage of profits a funded trader keeps. Common splits are 70/30, 80/20, 90/10 in the trader's favor.
Profit Target
A specific dollar or percentage gain a prop firm requires to pass an evaluation, typically 8 to 10% on phase 1.
Profit Withdrawal
Pulling realized profits out of a funded account. Most firms require minimum payout amounts and may pause trading during processing.
Prop Firm
A proprietary trading firm that funds qualified traders with the firm's capital. Trader passes an evaluation, then keeps a profit split.
Pullback
A temporary counter-trend move within a larger trend. The retracement against the main direction. Best place to enter with the trend.
Q2 terms
Quantitative Easing (QE)
A central bank policy of buying bonds to inject money into the economy. Lowers yields and typically weakens the currency.
Quote Currency
The second currency in a pair (USD in EUR/USD). The pair's price is quoted in this currency: 1.0850 means 1 EUR costs 1.0850 USD.
R12 terms
Range
A market that oscillates between defined support and resistance levels without trending. Range trading means buying support and selling resistance.
Rectangle Pattern
Price oscillating between two horizontal levels for multiple swings. Trade either as a range (until breakout) or wait for the breakout in either direction.
Reset Fee
A discounted price some prop firms charge to restart a failed challenge with the same account size. Cheaper than buying a new challenge from scratch.
Resistance
A price level where selling pressure has historically overcome buying. Marks the top of a range; price often rejects from it.
Retail Sales
Monthly measure of consumer spending at retail outlets. A leading economic indicator; strong prints typically strengthen the currency.
Reversal Pattern
A chart pattern signaling the end of a trend (head and shoulders, double top, double bottom). Higher reliability than continuation patterns.
Rising Wedge
Higher highs and higher lows converging into a narrowing slope up. Despite the bullish slope, usually resolves with a bearish breakdown.
Risk of Ruin
The mathematical probability of blowing your account given your win rate, R:R, and position sizing. Risking 1% per trade keeps it near zero.
Risk per Trade
The fixed percentage of account equity you put at risk on any single trade. 1% is the standard for professional risk management.
Risk-On / Risk-Off
Market mood. "Risk-on" = traders favour growth assets (AUD, NZD, equities). "Risk-off" = capital flows to safe havens (JPY, CHF, gold, USD).
Risk-to-Reward (R:R)
The ratio between potential loss and potential profit on a trade. 1:2 R:R means risking $100 to make $200. Higher R:R lowers required win rate.
RSI
Relative Strength Index. Momentum oscillator from 0 to 100. Above 70 is overbought, below 30 is oversold. More useful for divergence than absolute reading.
S23 terms
Safe Haven
An asset that strengthens when risk appetite collapses. Classics: JPY, CHF, USD, gold. Used as a flight-to-quality during crises.
Scaling Plan
A prop firm's program for increasing your account size as you hit profit milestones. Some firms scale to $200K, $500K, or more.
Sell Limit
An order to sell at a specific price above the current market. Used to short into resistance.
Sell Stop
An order to sell at a specific price below the current market. Used to enter on a breakdown.
Sellside Liquidity
Resting sell-stop orders sitting below a swing low. Price often runs into them before reversing, because triggered stops fuel the move down.
Session Overlap
When two trading sessions are open simultaneously. The London-NY overlap (8 to 11 AM ET) is the highest-volume window in forex.
Settlement
The point at which a trade is finalized and currencies are exchanged. Spot forex settles T+2 (two business days after the trade).
Shooting Star
A small-bodied candle with a long upper wick at the top of an uptrend. Reflects buyers exhausted at the highs. Bearish reversal at resistance.
Short Position
A trade that profits if price falls. You sell now intending to buy back lower later. "Going short" = selling.
Slippage
The difference between the price you expected and the price you actually filled at. Common during news releases and on illiquid pairs.
SMA
Simple Moving Average. Plots the unweighted mean of price over N candles. Slower to react than the EMA. The 200 SMA is the classic long-term trend filter.
Spinning Top
A candle with a small body and roughly equal wicks above and below. Reflects indecision; meaningful at major levels, noise otherwise.
Spot Forex
The most common form of forex, where currency is bought or sold for immediate delivery (within 2 business days). The retail standard.
Spread
The difference between bid and ask price. Your trade starts in the red by this amount. Tighter is better; major pairs have the tightest spreads.
Stochastic
Momentum oscillator comparing current close to recent range. Reads overbought above 80 and oversold below 20. Best in ranging markets, weak in strong trends.
Stop Loss
An order that closes a losing trade at a predefined price to cap the loss. Non-negotiable for any professional trader.
Stop Run
A move designed (intentionally or organically) to trigger clusters of stop orders before reversing. Often happens around obvious round numbers and prior swing points.
STP Broker
Straight Through Processing. Routes your orders to liquidity providers without a dealing desk. Faster execution than market-maker brokers, less conflict of interest.
Support
A price level where buying pressure has historically overcome selling. Marks the bottom of a range; price often bounces from it.
Swap (Rollover)
The interest credit or debit applied to positions held overnight, reflecting the interest-rate differential between the two currencies.
Swing High
A local peak in price action. Used to identify market structure and place stops for shorts.
Swing Low
A local bottom in price action. Used to identify market structure and place stops for longs.
Symmetrical Triangle
Lower highs and higher lows converging to a point. Pure compression pattern; breakout direction is not predetermined, so wait for the close.
T12 terms
Take Profit
An order that closes a winning trade at a predefined price target. Locks in profit without you needing to be at the screen.
Three Black Crows
Three consecutive long bearish candles, each opening within the prior body and closing near its low. Strong bearish continuation or reversal at resistance.
Three White Soldiers
Three consecutive long bullish candles, each opening within the prior body and closing near its high. Strong bullish continuation or reversal at support.
Tick
The smallest possible price change in any market. In forex, usually equal to one pipette.
Trade Balance
The difference between a country's exports and imports. A persistent surplus tends to support the currency; a widening deficit pressures it.
Trade Plan
A written set of rules covering setups, entries, stops, targets, risk per trade, and conditions for skipping a trade. The line between trading and gambling.
Trading Day Minimum
A prop firm rule requiring a minimum number of trading days before you can pass evaluation or request a payout. Stops one-lucky-trade passes.
Trailing Stop
A stop loss that moves with price as the trade goes in your favor. Locks in profit while leaving room for the trend to continue.
Trend
The overall direction of price over a given timeframe. Uptrend = higher highs and higher lows. Downtrend = lower highs and lower lows.
Trendline
A diagonal line drawn along multiple swing highs or swing lows. Acts as dynamic support or resistance.
Triple Top
Three peaks at roughly the same level, separated by two troughs. More reliable than a double top because more attempts have failed at the level.
Tweezer Tops / Bottoms
Two consecutive candles with matching highs (tweezer top) or matching lows (tweezer bottom). Reflects rejection at the same level. Stronger with confluence.
U1 term
Unemployment Rate
Monthly percentage of the labor force without a job. Falling unemployment supports the currency by signalling tighter labor and likely rate hikes.
V4 terms
Verification Phase
The second stage of a two-step prop firm challenge. Usually a lower profit target (5%) and the same drawdown rules. Confirms phase-1 performance wasn't a fluke.
VIX
The volatility index on the S&P 500. Often called the "fear gauge." High VIX correlates with USD/JPY weakness and risk-off flows across forex.
Volume
The number of contracts or lots traded in a period. In forex it's tick volume (a proxy). Confirms breakouts: a real breakout has rising volume.
VWAP
Volume Weighted Average Price. The average price for the day weighted by traded volume. Institutional benchmark; price above VWAP is bullish bias intraday.
W4 terms
Weekend Holding Rule
Some prop firms forbid holding positions over the weekend due to gap risk. Failure to close before Friday's close violates the rule.
Wick (Shadow)
The thin line above and below a candle's body, showing the high and low reached during that period. Long wicks indicate rejection.
Williams %R
Momentum oscillator from -100 to 0. Above -20 is overbought, below -80 is oversold. Functionally similar to stochastic but inverted.
Win Rate
The percentage of trades that close profitable. With 1:1 R:R you need above 50% to profit; with 1:3 R:R you need just 26%.
Y1 term
Yield Curve
A line plotting government bond yields across maturities. An inverted curve (short rates above long) historically precedes recessions and currency weakness.
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