Glossary

Displacement is a strong, impulsive one-directional move that breaks market structure and leaves a fair value gap behind it, signalling genuine intent.

Ote Meaning in Trading: the short answer from the KenMacro desk. Optimal trade entry (OTE) is the ICT model for entering pullbacks at the 62-79% Fibonac…

Mitigation block meaning: an order block revisited in the trend direction where original participants manage exposure, supporting continuation rather than reversal.

Breaker Block: the short answer from the KenMacro desk. Breaker block meaning: a failed order block that flips role, becoming support or resistance afte…

Inducement Trading: the short answer from the KenMacro desk. Inducement is the obvious liquidity level that baits traders in before price sweeps deeper…

Supply and demand zones mark price areas where sharp moves originated, signalling buyer or seller imbalance. The desk explains how they form and why they matter.

Market structure is the sequence of swing highs and lows defining trend or range. The desk explains BOS, CHoCH, and higher-timeframe context.

Change of Character: the short answer from the KenMacro desk. Change of character (CHoCH) marks the first swing-point break against the prevailing trend…

Break of structure (BOS) means price closing beyond a prior swing high or low in the trend direction, confirming continuation rather than reversal.

Liquidity sweep meaning explained: when price spikes beyond a high or low, triggers clustered stops, then reverses. The desk view on stop hunts and order flow.

Fair value gap (FVG) explained: the three-candle imbalance left by fast price delivery, why it acts as a magnet, and how the desk treats it.

Order block meaning: the last opposing candle before a structure-breaking displacement, marking where institutional orders likely sat before price moved.

Support and resistance zones are price ranges where buyers or sellers have historically defended. The desk explains how to map and use them.

Force Index explained: Alexander Elder’s oscillator multiplies price change by volume to gauge buying and selling pressure behind each market move.

Fibonacci retracement explained: how traders use 0.382, 0.5 and 0.618 pullback levels to map corrections within a prevailing price trend.

Head and shoulders is a three peak reversal pattern with a neckline trigger. The desk explains structure, confirmation, and how traders read it.

Candlestick chart deep dive: how Japanese OHLC bars are built, what each wick and body shows, and how price action traders read them on any timeframe.

Chartist explained: a trader who reads price charts, patterns and structure rather than fundamentals to make decisions. Methods, tools and practical use.

Fundamental analysis is the framework traders use to value currencies and assets through macro data, interest rates, and balance sheet conditions.

Technical analysis is the study of price charts, patterns, and indicators to forecast market direction. The desk explains how it works in forex trading.

Put call parity explained: the no-arbitrage equation linking European call and put prices to the strike, forward, and risk-free discount factor.

Delta spread is the net delta between two related option positions. The desk explains how traders read it, hedge it, and use it to size directional risk.

Delta hedging neutralises an option position’s directional exposure by trading the underlying. The desk explains the mechanics, frequency, and costs involved.

Strip options strategy combines two puts and one call at the same strike and expiry, a bearish volatility play used when traders expect a large downside move.

Straddle explained: a long call and long put at the same strike and expiry, used by traders to position for a large move in either direction.

Butterfly spread is a limited-risk options strategy using three strikes. The desk explains structure, payoff, and when traders deploy it.

Average rate option is an Asian option whose payoff settles against the average price of the underlying over a fixed window, not the spot at expiry.

Compound option explained: a layered derivative giving the holder the right to buy or sell another option. See pricing, uses, and risks for traders.

Exotic option explained: how non-standard payoffs like barriers, binaries and Asians work, who uses them, and why they price differently to vanilla options.

Vanilla option explained: a standard call or put with fixed strike and expiry, no exotic features. The desk covers pricing, hedging and trader use cases.

Binary options are fixed payout digital contracts paying all or nothing on a yes or no question. The desk explains structure, pricing, and regulatory status.

Knock-out option explained: a barrier option that voids when price touches the trigger. The desk breaks down mechanics, pricing and trader use cases.

Knock-in option: a barrier option that only activates when the underlying touches a specified trigger level. The desk breaks down structure, pricing, and use.

Barrier option explained: how knock-in and knock-out triggers activate or extinguish payoffs, why banks price them, and how traders use them in FX.

American option explained: a contract giving the holder the right to exercise at any point up to and including the expiry date, unlike European style.

Carry is the interest differential earned or paid for holding a forex or futures position overnight. The desk explains how carry shapes positioning.

Rollover in forex is the process of swapping an overnight position to the next value date, with interest credited or debited based on rate differentials.

Interest rate swap (IRS) explained: how banks and funds exchange fixed for floating cash flows, why swap rates matter, and how the desk reads them.

Swap explained: a derivative contract exchanging cash flows, either fixed for floating rates or two currencies, used by banks, funds and corporates.

Forward rate is the FX price agreed today for settlement on a future value date. The desk explains how forwards are priced, used and quoted.

Forward points convert the interest rate differential between two currencies into a price adjustment for FX forward and swap contracts.

Outright forward explained: a single-leg FX forward contract to buy or sell currency at a fixed rate on a future date, distinct from FX swaps.

Forward contract explained: how OTC bilateral agreements lock in a future price, who uses them, and how they differ from futures on regulated exchanges.

A futures contract is a standardised exchange traded agreement to buy or sell an asset at a fixed price on a future date. The desk explains the mechanics.

Derivatives are contracts whose value comes from an underlying asset. The desk explains futures, options, swaps and CFDs for retail and macro traders.

Short squeeze explained: how forced covering by short sellers triggers rapid price rises, why it happens, and how traders identify and manage the risk.

Selling short means borrowing an asset, selling it, and buying it back lower to pocket the difference. The desk explains the mechanics and risks.

Buy on margin means purchasing securities or currency with borrowed broker funds, using your account equity as collateral against the loan exposure.

Stop out price is the broker level that triggers automatic position liquidation when your margin ratio falls below the safety threshold.

Margin call explained: when broker equity falls below required margin, the broker demands more collateral or begins closing positions to limit exposure.