Macro Glossary

Macro Glossary

Updated 20 May 2026 · 60 of 60 terms live

Every trading term defined the way the desk actually uses it. Macro drivers, forex mechanics, indicators, orders and risk, broker structure, sentiment and regime. Trader voice, no marketing copy.

Macro Drivers

12 terms

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

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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

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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

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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

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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

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IORB (Interest on Reserve Balances)

IORB is the interest rate the Federal Reserve pays banks on the reserves they hold at the Fed

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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

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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

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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

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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

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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

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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

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Forex Mechanics

12 terms

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

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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

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Leverage

Leverage is the ratio of the notional value of a position to the margin posted to hold it

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Lot size

Lot size is the contractual position size for a forex trade, measured in units of the base currency

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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)

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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)

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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

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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

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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

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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

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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)

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Weekend gap

A weekend gap is the difference between the Friday close and the Sunday open price in forex, gold and indices CFDs

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Indicators and Reads

10 terms

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)

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ATR (Average True Range)

ATR (Average True Range) is a volatility indicator developed by J

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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

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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

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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

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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

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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

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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

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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

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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

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Orders and Risk

8 terms

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

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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

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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

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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

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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

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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

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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)

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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

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Broker and Prop

8 terms

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

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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

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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

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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

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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

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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

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Regulatory tier

Regulatory tier is the informal classification of forex broker regulators by the rigour of their enforcement and client-protection rules

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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

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Sentiment and Regime

10 terms

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

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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

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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

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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

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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

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Mean reversion

Mean reversion is the statistical tendency of asset prices to return toward a long-term average after extreme moves

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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

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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’

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Regime shift

A regime shift is a durable transition between macro states that fundamentally changes the cross-asset correlations and dominant drivers

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Risk-on vs risk-off

Risk-on and risk-off are the two cross-asset macro regimes that classify market sentiment

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