Glossary

Value at Risk (VaR) measures the statistical worst case loss on a portfolio over a set horizon at a chosen confidence level. The desk explains.

Win rate measures the share of trades closing in profit. The desk explains how to read it alongside risk reward, expectancy, and sample size.

Expectancy is the average profit or loss per trade, probability weighted across wins and losses. The desk explains how to calculate and use it.

Risk reward ratio compares a trade’s potential profit to its potential loss. Learn how the desk uses it to size positions and filter setups.

Risk per trade is the fixed share of account equity exposed on each setup. The desk explains sizing, drawdown maths and how professionals apply it.

Heikin Ashi candles smooth price action to highlight trend direction. The desk explains the formula, practical uses, limits, and common trader pitfalls.

Ichimoku cloud explained: how the kumo, Tenkan, Kijun, Senkou and Chikou lines combine into a single trend and momentum framework for traders.

Death cross explained: the 50 day moving average crossing below the 200 day, a classic bearish trend signal, and how traders actually use it.

Golden cross explained: when the 50-day moving average crosses above the 200-day, why traders watch it, and how the desk interprets the signal in context.

Pin bar is a rejection candle with a long wick and small body. Learn how the desk reads pin bars at key levels for reversal signals in forex markets.

Engulfing pattern explained for retail traders: how the second candle body engulfs the first to signal a potential bullish or bearish reversal.

Hammer candlestick is a single-bar reversal pattern with a long lower wick at support, showing buyers rejecting lower prices after a decline.

Doji candlestick explained: when open equals close, the candle signals market indecision. Learn how traders read doji patterns at key support and resistance.

Candlestick charts show open, high, low and close for a period. The desk explains structure, reading conventions and how traders actually use them.

False breakout explained: how price pierces a key level, traps breakout traders, then reverses sharply. Definition, examples, and how the desk reads them.

Breakout explained: when price closes through a key support or resistance level with volume, signalling a potential shift in market structure and direction.

Demand zone meaning in price action and SMC: an area of unfilled buy orders where institutions accumulated, often triggering bullish reactions on retest.

Supply zone meaning in trading: a price area holding unfilled sell orders where institutional offers tend to cap rallies and reverse short-term trend.

Resistance level is a price ceiling where selling pressure has repeatedly capped advances. The desk explains how traders identify, validate and trade these zones.

Support level explained: the price floor where buyers historically step in, how it forms, and how the desk reads it across forex and macro markets.

New York session explained: US forex trading hours, the London overlap window, and why this period concentrates the largest share of daily FX volume.

London session is the European FX window that delivers the deepest liquidity, tightest spreads, and largest daily ranges in global currency markets.

Asian session explained: Tokyo trading hours, typical liquidity, JPY and AUD behaviour, and how the desk reads ranges before London opens.

Weekend gap is the price jump between Friday close and Sunday open in forex. The desk explains causes, risks, and how traders manage exposure across weekends.

Trailing stop explained: a dynamic stop order that follows price at a fixed distance, protecting open profit while letting winning trades continue to run.

OCO order means one cancels other: two paired pending orders where execution of one automatically cancels the second. Used to bracket breakouts and ranges.

Take profit order explained: how this resting limit order closes a winning FX position at a pre-set price, plus how retail and institutional desks use it.

Stop order explained: a trigger order that becomes a market order when price hits a set level, used by FX traders for entries, exits and risk control.

Market order in FX: an instruction to execute immediately at the next available price. The desk breaks down slippage, fills, and when to use it.

Limit order explained: a pending instruction to execute at a specified price or better. The desk breaks down how it works, when it fills and when it slips.

Market impact is the adverse price move caused by your own order consuming liquidity. The desk explains how it works and why size matters in FX.

Bid-ask spread is the gap between the price you can sell at and buy at. The desk breaks down how it works, why it widens, and what traders pay.

Exotic currency pairs pit a major currency against an emerging market unit. The desk breaks down USDZAR, USDTRY, USDMXN mechanics, costs and risks.

Minor currency pairs are non-USD crosses like EUR/GBP, EUR/JPY and GBP/JPY. Learn how they price, where liquidity sits and how traders use them.

Major currency pairs are the seven most liquid FX crosses, all quoted against the US dollar, accounting for the bulk of daily global FX volume.

Forward guidance is how central banks signal future policy intent. The desk explains its mechanics, types, and how traders position around it.

Nominal interest rate is the stated yield on a loan or bond before inflation adjustment. The desk explains how traders use it across rates and FX.

Real interest rate explained: the nominal yield minus expected inflation, why TIPS proxy it, and how rate differentials move the dollar and gold.

Parallel shift in the yield curve means short, medium and long yields move up or down by a similar amount. Here is what it signals for traders.

Yield curve twist happens when short and long-end rates move in opposite directions. The desk explains the mechanics, drivers and trading read-across.

Yield curve flattening explained: how bull and bear flatteners form, what they signal about growth and Fed policy, and how macro traders read the move.

Yield curve steepening means long rates rise faster than short rates. The desk explains bull and bear steepeners and what they mean for macro traders.

The 3m10y spread is the Fed’s preferred recession gauge. The desk explains how it inverts, what it signals, and how macro traders read it.

SNB sets Swiss monetary policy and intervenes in FX to manage the franc. Learn how the Swiss National Bank moves CHF pairs and what traders watch.

BoC is the Bank of Canada, the central bank that sets the policy rate and shapes CAD pricing across rates, oil-linked flows, and forex markets.

RBA stands for Reserve Bank of Australia, the central bank that sets the cash rate and steers AUD. The desk explains its mandate and market impact.

BoJ stands for Bank of Japan, Japan’s central bank running ultra easy policy, yield curve control and a key driver of JPY and global carry trades.

BoE means the Bank of England, the UK central bank setting Bank Rate and shaping sterling. The desk explains its policy tools, MPC schedule and market impact.

ECB is the European Central Bank, setting interest rates and monetary policy for the euro area. Learn how its decisions move EUR pairs and bonds.

FOMC is the Federal Reserve committee that sets US interest rates. The desk explains its structure, meeting schedule, and market impact for traders.