Glossary
Forex Trading Glossary
Definitive dictionary of the most-used forex trading terms — each entry pairs a 2-sentence "what is it" answer with deeper explanation for traders who want the full context.
التنفيذ· 4
Spread
The difference between the bid (sell) price and the ask (buy) price of a financial instrument — the broker's primary cost.
ECN
Electronic Communication Network — a broker model that routes orders to external liquidity providers instead of filling in-house.
Slippage
The difference between the price you expected to fill at and the price you actually filled at — usually negative during volatility.
Liquidity Provider (LP)
A Tier-1 bank, prime broker, or inter-bank ECN that quotes bid/ask prices to retail brokers — the wholesale source of forex liquidity.
إدارة المخاطر· 9
Leverage
A multiplier on your deposit that lets you control a position larger than your capital — 1:30 means $30 of position per $1 of margin.
Drawdown
The peak-to-trough decline in an account's equity, usually expressed as a percentage of the peak.
Stop Loss
An automatic order that closes a position at a pre-set price to cap loss — the foundational risk-management tool.
Take Profit
An automatic order that closes a position at a pre-set profit level — locks in gains without monitoring.
Margin Call
A broker alert (or forced closure) when your account equity falls below the margin required to maintain open positions.
Risk-Reward Ratio (RR)
The ratio between the dollars risked and dollars targeted on a trade — 1:2 means risking $1 to potentially make $2.
Trailing Drawdown
A maximum-loss floor that follows the account's peak equity upward — so giving back profit can breach it even while still in profit.
Daily Drawdown
The maximum a prop firm account may lose in a single trading day — typically 4-5%, reset at a fixed server time.
Static Drawdown
A fixed maximum-loss floor on a prop firm account — set once at the start and never trails upward with profit.
الحساب· 15
Lot
A standardized position size in forex. 1 standard lot = 100,000 units of the base currency. Mini = 10,000. Micro = 1,000. Cent = 100.
Swap
The interest paid (or earned) for holding a forex position past the daily 17:00 ET rollover.
Rebate
A per-lot cashback paid to the trader from the broker's IB commission — typically $2-$15 per standard lot.
Prop Firm
A company that provides trading capital ($5k-$4M) to individuals who pass a paid evaluation called a "Challenge."
Profit Split
The share of trading profits a prop-firm-funded trader keeps — typically 80-90%, with the firm taking the remainder.
Evaluation (Challenge)
The paid test phase a trader must pass to earn a funded prop firm account — hit a profit target without breaching the drawdown rules.
Funded Account
A live prop firm trading account, backed by the firm's capital, granted to a trader after they pass the evaluation.
Payout
The withdrawal of a trader's profit share from a funded prop firm account, paid on a fixed cycle.
Profit Target
The profit a trader must reach in a prop firm evaluation phase to pass — typically 8-10% of the account size.
Scaling Plan
A prop firm program that increases a funded trader's account size as they hit consistent payout and profit milestones.
Consistency Rule
A prop firm rule that rejects a pass if too much of the total profit came from a single day or trade — forcing steady, repeatable results.
News Trading Restriction
A prop firm rule that bans opening or holding positions during the minutes around a high-impact economic news release.
Verification (Phase 2)
The second evaluation phase on a two-step prop firm challenge — usually a smaller profit target proving the Phase 1 pass was repeatable.
Reset Fee
A discounted fee — typically 50-70% of the original challenge price — paid to immediately retry a failed prop firm evaluation without buying a brand-new account.
Minimum Trading Days
The minimum number of separate days a trader must place at least one trade during a prop firm evaluation — typically 4 to 10 days.
السوق· 6
Pip
The smallest standardized price move on a forex pair — 0.0001 on most pairs, 0.01 on JPY pairs.
Liquidity
The depth of buyers and sellers in a market — high liquidity = tight spreads, easy fills; low liquidity = wide spreads, slippage.
Volatility
The magnitude of price changes over time — measured most commonly as the standard deviation of daily returns.
Trading Session
One of four major forex trading windows defined by financial center business hours — Sydney, Tokyo, London, New York.
Fundamental Analysis
Analysis of economic data, central bank policy, and macro events to predict currency movements — the macro complement to technical analysis.
Technical Analysis
Analysis of price charts and indicators to predict future price movements — the chart-driven complement to fundamental analysis.
الاستراتيجية· 5
Scalping
A trading style that takes many small profits from very short holding periods — typically seconds to minutes per trade.
Swing Trading
A trading style that holds positions for hours to multiple days, targeting larger directional moves on higher timeframes.
Expert Advisor (EA)
An automated trading program for MetaTrader 4/5 that executes trades based on pre-programmed rules.
Smart Money Concepts (SMC)
A trading framework based on identifying institutional order flow — liquidity grabs, order blocks, and market structure shifts.
Order Block
A consolidation zone on a chart where institutional traders are believed to have accumulated positions before a directional move.
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