Real yields, the dollar, inflation gauges, central-bank plumbing. The variables that move every cross-asset trade.
Breakeven inflation
Breakeven inflation is the difference between a nominal Treasury yield and the matching-tenor TIPS yield, expressed as a percentage
Read the definition
Core CPI
Core CPI is the Consumer Price Index excluding the food and energy components, which are the most volatile and the most exposed to supply shocks
Read the definition
Cross-currency basis swap
A cross-currency basis swap is an agreement to exchange floating interest payments in two currencies, typically against a notional principal
Read the definition
DXY (US Dollar Index)
The DXY is the ICE US Dollar Index, a fixed-weight geometric average of the dollar against six major currencies, dominated by the euro at roughly 57.6 percent of the basket, followed by the yen, sterling, Canadian dollar
Read the definition
FOMC dot plot
The FOMC dot plot is the Summary of Economic Projections chart released quarterly at the March, June, September and December meetings, where each FOMC member anonymously plots a dot for their year-end view of the appropr
Read the definition
IORB (Interest on Reserve Balances)
IORB is the interest rate the Federal Reserve pays banks on the reserves they hold at the Fed
Read the definition
Neutral rate (r-star)
The neutral rate, often denoted r-star, is the real federal funds rate that would prevail when the economy is operating at full employment and inflation is stable at the 2 percent target
Read the definition
ON RRP (Overnight Reverse Repurchase Facility)
The ON RRP is the Federal Reserve’s Overnight Reverse Repurchase Facility, in which eligible counterparties (primary dealers, money market funds, GSEs, and other approved institutions) lend cash to the Fed overnight agai
Read the definition
PCE (Personal Consumption Expenditures price index)
PCE is the Personal Consumption Expenditures price index published by the Bureau of Economic Analysis, the Federal Reserve’s preferred measure of inflation
Read the definition
Real yield
Real yield is the nominal bond yield minus expected inflation over the matching tenor, usually proxied by the TIPS yield in US markets
Read the definition
Repo rate
The repo rate is the interest rate on a repurchase agreement, where one party sells securities (usually US Treasuries) to another with an agreement to repurchase them at a higher price the next day
Read the definition
Term premium
Term premium is the compensation investors require for holding a long-dated bond rather than rolling a sequence of short-dated bonds with the same average maturity
Read the definition
Pips, lots, leverage, spread, slippage and the working machinery of forex execution. The plumbing that decides what a correct call is actually worth.
ECN account
An ECN (Electronic Communications Network) account routes client orders directly into a network of liquidity providers, who compete to fill the trade, with the broker earning a per-lot commission rather than a marked-up
Read the definition
Gap risk
Gap risk is the risk that price moves discontinuously from one level to another without trading at the prices in between, leaving any stop placed within the gap to fill at the first tradeable price beyond it
Read the definition
Leverage
Leverage is the ratio of the notional value of a position to the margin posted to hold it
Read the definition
Lot size
Lot size is the contractual position size for a forex trade, measured in units of the base currency
Read the definition
Margin call
A margin call is the broker’s notification that account equity has fallen close to the margin required to hold open positions, expressed as a margin level percentage (equity divided by used margin times 100)
Read the definition
Pip
A pip is the smallest standard price increment in a foreign exchange pair, equal to 0.0001 on most major pairs (the fourth decimal place) and 0.01 on yen-denominated pairs (the second decimal place)
Read the definition
Raw spread vs standard spread account
A raw-spread (ECN-style) account passes the underlying interbank bid-ask spread through to the trader with little or no broker markup, and charges an explicit per-lot commission instead
Read the definition
Requote
A requote is the broker’s response to an order request when the original price is no longer available, offering the trader a new price (usually worse) and asking them to accept or reject the modified terms
Read the definition
Slippage
Slippage is the difference between the price at which a market or stop order is submitted and the price at which it is actually filled, expressed in pips
Read the definition
STP execution
STP (Straight Through Processing) execution routes client orders directly to a liquidity provider for fulfilment, without a broker dealing desk taking the other side
Read the definition
Swap rate (rollover)
The swap rate, also called rollover, is the interest debited or credited to a forex position held past the broker’s daily rollover time (typically 22:00 UTC)
Read the definition
Weekend gap
A weekend gap is the difference between the Friday close and the Sunday open price in forex, gold and indices CFDs
Read the definition
ATR, VIX, MOVE, breadth, COT and the gauges the desk actually reads before sizing. Volatility, sentiment and positioning, defined for traders.
ADP Employment Report vs NFP
The ADP National Employment Report estimates monthly change in US private non-farm employment using data from ADP’s payroll-processing customer base (roughly a quarter of all US private payrolls)
Read the definition
ATR (Average True Range)
ATR (Average True Range) is a volatility indicator developed by J
Read the definition
Breadth thrust
A breadth thrust is a sharp expansion in market participation measured by indicators such as the Zweig Breadth Thrust (advancing issues divided by total issues on the NYSE rising from below 0.40 to above 0.615 within 10
Read the definition
COT (Commitments of Traders) report
The COT report is the weekly Commitments of Traders report published by the US Commodity Futures Trading Commission, showing aggregate futures positioning by trader category as of the previous Tuesday’s close
Read the definition
ISM PMI vs S&P Global PMI
The ISM Manufacturing PMI is the diffusion index published monthly by the Institute for Supply Management, with a 50 reading indicating no change from the prior month, above 50 expansion, and below 50 contraction
Read the definition
MOVE index
The MOVE index is the ICE BofA MOVE Index, a yield-curve-weighted average of the implied volatility of one-month Treasury options across the 2, 5, 10 and 30-year maturities
Read the definition
NFP surprise
The NFP (Non-Farm Payrolls) surprise is the difference between the actual monthly change in US non-farm employment as reported by the Bureau of Labor Statistics and the consensus forecast going into the release
Read the definition
Put-call ratio
The put-call ratio is the ratio of put option volume to call option volume over a defined period, usually one trading day, on a single underlying or aggregated across an exchange
Read the definition
Retail sentiment (DSI)
Retail sentiment refers to the directional positioning of retail traders, measured via broker positioning data (OANDA Order Book, Saxo, IG client positions) or sentiment surveys such as the Daily Sentiment Index (DSI) wh
Read the definition
VIX (CBOE Volatility Index)
The VIX is the CBOE Volatility Index, a real-time measure of the implied 30-day volatility of S&P 500 index options, annualised and expressed as a percentage
Read the definition
Stop losses, take profit ladders, OCO orders, R-multiples and position sizing. The discipline that decides how long an account survives.
Drawdown vs maximum drawdown
Drawdown is the percentage decline in account equity from a recent peak (high-water mark) to the current value
Read the definition
OCO order
An OCO (One Cancels the Other) order pairs two resting orders, typically a take profit and a stop loss, so that the execution of one automatically cancels the other
Read the definition
Position sizing formula
The position sizing formula is the deterministic calculation that converts a target risk percentage and a stop loss distance into the appropriate position size for a trade
Read the definition
R-multiple
An R-multiple is the result of a trade expressed as a multiple of the dollar risk taken, where 1R equals the absolute distance from entry to stop loss in monetary terms
Read the definition
Risk per trade
Risk per trade is the percentage of total account equity that is lost if a position’s stop loss is hit at the planned level
Read the definition
Stop loss
A stop loss is a resting order that closes an open position when price reaches a specified adverse level, capping the realised loss on the trade
Read the definition
Take profit ladder
A take profit ladder is a multi-stage exit strategy that closes portions of an open position at successive price targets (commonly TP1, TP2, TP3)
Read the definition
Trailing stop
A trailing stop is a dynamic stop-loss order that moves in the favourable direction as price advances but does not move back when price retraces, locking in successive levels of profit while leaving the position open for
Read the definition
A-book vs B-book, regulator tiers, segregated funds, FIFO, prop-firm scaling and consistency. The structural rules that decide where and how to trade.
A-book vs B-book broker model
An A-book broker passes client orders directly to external liquidity providers and earns from spread markup or commission, taking no market risk on the trade itself
Read the definition
FIFO rule
The FIFO (First-In First-Out) rule is the CFTC and NFA requirement that US forex brokers close the oldest open position in a given currency pair first when a client places a closing order, before any newer positions in t
Read the definition
NDD vs market maker broker model
An NDD (No Dealing Desk) broker routes client orders to external liquidity providers for execution, taking no market risk on the trade and earning from spread markup or per-lot commission
Read the definition
Negative balance protection
Negative balance protection (NBP) is the rule that a retail trading account cannot end with a negative balance after losses on open positions, even if extreme market gaps or flash crashes push the position past zero befo
Read the definition
Prop firm consistency rule
A prop firm consistency rule caps the percentage of total monthly profit that can come from any single trading day, typically 30 to 45 percent
Read the definition
Prop firm scaling rule
A prop firm scaling rule is the policy by which a profitable funded trader’s account balance is increased after meeting defined profit milestones, typically monthly
Read the definition
Regulatory tier
Regulatory tier is the informal classification of forex broker regulators by the rigour of their enforcement and client-protection rules
Read the definition
Segregated funds
Segregated funds is the regulatory requirement that client deposits be held in bank accounts that are legally separate from the broker’s own operating capital, with daily reconciliation between client positions and the s
Read the definition
Risk-on, risk-off, regime shifts, carry, momentum and central-bank pivots. The cross-asset backdrop the desk reads before the chart.
Carry trade
A carry trade is a strategy that borrows in a low-yielding currency and invests in a higher-yielding currency, earning the interest rate differential as a steady positive return
Read the definition
Central bank pivot
A central bank pivot is the formal turning of a central bank’s policy stance from tightening to easing (or vice versa), marked by language changes in official communication and confirmed by a first rate move in the new d
Read the definition
Currency intervention
Currency intervention is direct action by a central bank or finance ministry to influence the foreign exchange value of its currency, escalating through three stages: verbal jawboning, sterilised intervention (FX sales o
Read the definition
Divergence
A divergence in trading occurs when price makes a new high or low while a momentum indicator (RSI, MACD, momentum oscillator) fails to confirm with a matching new extreme
Read the definition
Dovish vs hawkish central bank stance
A dovish central bank stance prioritises growth and employment over inflation control, favouring lower interest rates and accommodative policy
Read the definition
Mean reversion
Mean reversion is the statistical tendency of asset prices to return toward a long-term average after extreme moves
Read the definition
Momentum
Momentum is the empirical tendency of assets that have risen over a recent lookback period to continue rising, and assets that have fallen to continue falling
Read the definition
Narrative shift
A narrative shift is a change in the dominant story or framework the market is using to price a macro outlook (from ‘soft landing’ to ‘hard landing’, from ‘higher for longer’ to ‘cuts coming’, from ‘AI productivity boom’
Read the definition
Regime shift
A regime shift is a durable transition between macro states that fundamentally changes the cross-asset correlations and dominant drivers
Read the definition
Risk-on vs risk-off
Risk-on and risk-off are the two cross-asset macro regimes that classify market sentiment
Read the definition
The complete glossary index. Every definition the desk has published, linked for quick navigation.