Short definitions of the terms you will see on MT5 and in our market analysis. Select a term to read more and see related terms.
Trading by a computer program that places and closes orders when set rules are met.
The laws that require brokers to check who their clients are and to watch for suspicious payments.
Buying and selling the same asset in different places at the same time to profit from a small price difference.
The price you buy at. It is the higher of the two prices quoted.
Average True Range: an indicator of how far price usually moves in one bar, averaged over a set number of bars (14 by default).
Adding to a losing trade at a worse price. It increases the amount you can lose if the price keeps moving against you.
The first currency in a forex pair. In EUR/USD the base is the euro, priced in US dollars.
A long market decline, often defined as a major index losing a fifth or more of its value from a recent high.
The price you sell at. It is the lower of the two prices quoted.
The first cryptocurrency, launched in 2009 by an anonymous developer or group. It is the largest by market value.
The UK's central bank. It sets Bank Rate, the main interest rate for sterling.
Japan's central bank. It sets interest rates for the yen.
A technical indicator plotting standard deviations above and below a moving average to show volatility ranges.
A long market rise, often defined as a major index gaining a fifth or more from a recent low.
France's main stock index: the 40 largest companies listed on Euronext Paris.
A chart bar that shows the open, high, low and close for a period. The body runs from open to close, and the thin lines (wicks) mark the high and low.
Borrowing in a low-interest currency to hold a higher-interest one, to earn the difference in rates. A move in the exchange rate can wipe that out.
A derivative that pays the difference between an asset's entry and exit price without you owning the underlying.
A flat fee per lot charged by some account types (typically ECN) in exchange for tighter raw spreads.
A monthly measure of inflation based on the prices of a basket of consumer goods and services. Markets often move sharply when it is released.
Digital currencies such as Bitcoin and Ethereum, recorded on public networks secured by cryptography.
Germany's main stock index: the 40 largest companies on the Frankfurt Stock Exchange.
Opening and closing all positions within the same trading day to avoid overnight risk and swap charges.
A broker model where your orders are matched internally instead of being routed to external liquidity providers.
A practice account with virtual money and the broker's live prices.
The fall in account equity from a high to the next low, usually shown as a percentage.
An automated trading program that runs on MT5 and places trades according to a coded strategy.
The central bank of the euro area. It sets interest rates for the euro.
A model in which a broker passes client orders to outside liquidity providers instead of taking the other side itself.
Your balance plus or minus the profit or loss on open positions. It changes with every price move.
The second-largest cryptocurrency. Its network runs smart contracts and most decentralised-finance (DeFi) applications.
The US Federal Reserve committee that sets US interest rates. It meets eight times a year.
Two currencies quoted against each other, such as EUR/USD or GBP/JPY.
Equity minus used margin: the money available to open new positions.
The UK's main stock index: the 100 largest companies on the London Stock Exchange.
Evaluating assets based on economic data, monetary policy, corporate earnings, and geopolitical factors.
A jump in price with no trading in between, usually over a weekend or after major news.
The total value of a country's economic output, usually published each quarter.
Gold, quoted in US dollars as XAU/USD. Traders often buy it when other markets fall, though it does not always rise at those times.
Opening a position that offsets the risk on one you already hold, in the same instrument or a related one.
High-frequency trading: automated strategies run by firms that hold positions for a second or less and trade many thousands of times a day.
An index tracks the value of a group of shares, such as the S&P 500, Nasdaq 100, DAX or FTSE 100.
The rate at which prices of goods and services rise, which reduces what money can buy.
The cost of borrowing in a currency, set by its central bank. Higher rates tend to strengthen a currency.
The checks a broker makes to confirm who a client is before opening an account.
The ratio of the position you control to the margin you put up. At 1:100, each $1 of margin controls $100 of position.
An order to buy or sell at a set price or better.
How easily you can buy or sell without moving the price. More liquidity usually means tighter spreads.
A bank or trading firm that streams buy and sell prices to brokers.
Buying an instrument expecting the price to rise. Opposite of short.
A standard trade size. A standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro lot 1,000.
Moving Average Convergence Divergence: a trend and momentum indicator built from two moving averages and a signal line.
The money set aside from your account to open and hold a leveraged position. It is released when you close the trade.
A warning that your margin level has fallen to the broker's margin-call level. Add funds or close positions to avoid a stop-out.
Equity divided by used margin, shown as a percentage. It tells you how close you are to a margin call.
An order to buy or sell at the next available price. In a fast market the fill can differ from the price you saw.
MetaTrader 5, a trading platform made by MetaQuotes for forex and for CFDs on shares, indices, commodities and crypto.
An index of the 100 largest non-financial companies listed on the Nasdaq. Technology companies carry most of the weight.
A policy under which the broker resets your balance to zero if losses take it below zero, so you do not owe more than you deposited. You can still lose your whole deposit.
The monthly US jobs report. It is usually released on the first Friday of the month at 8:30 a.m. New York time.
Open, high, low, close: the four prices that make up each candle or bar on a chart.
Crude oil. WTI is the US benchmark and Brent is the main international benchmark.
A term from 'smart money' trading: the last falling candle before a rally, or the last rising candle before a decline, read as a sign of large orders.
A list of the buy and sell orders waiting at each price for an instrument. It shows market depth.
The standard unit of price movement in forex: 0.0001 on most pairs and 0.01 on pairs quoted in Japanese yen.
One tenth of a pip: the fifth decimal place on most pairs and the third on yen pairs.
The number of lots in a trade, worked out from how much you are willing to lose and the distance to your stop-loss.
Measures the prices producers receive for their goods. Traders watch it as an early sign of where consumer prices (CPI) are heading.
A large financial firm that provides credit, trade clearing and access to liquidity for other brokers and hedge funds.
The second currency in a forex pair. In EUR/USD the quote currency is the US dollar, which prices one euro.
Australia's central bank. It sets interest rates for the Australian dollar.
A new price a broker offers when it will not fill your order at the price you asked for.
A price level where rises have stalled before, as sellers stepped in. If price breaks above it, it often acts as support.
Limiting how much you can lose on each trade and on your account as a whole.
The size of the possible loss compared with the possible gain. 1:2 means risking $1 to aim for $2.
Relative Strength Index: a momentum indicator from 0 to 100. Readings above 70 are called overbought and below 30 oversold.
Very short-term trading: positions held for seconds to minutes, aiming for small gains on many trades.
A bank account a broker designates for client money, kept apart from its own operating funds. How much legal protection this gives depends on the broker's regulator and jurisdiction.
A measure of return for the risk taken: the strategy's return minus a cash benchmark rate, divided by the volatility of returns. Higher is better.
Selling first and buying back later, to gain if the price falls.
A precious metal that is also used in industry. Its price usually moves more than gold's.
The difference between the price you asked for and the price your order filled at. It can be in your favour or against you.
An index of 500 large US companies.
The difference between the bid and the ask. It is what you pay to open a position and close it again at once.
An order that closes a losing trade at a price you set. In a fast market or a gap it can fill at a worse price.
An order that becomes a market order when price reaches a level you set.
The broker closes your open positions automatically when your margin level falls to its stop-out level.
Straight-through processing: a model in which a broker passes orders on to liquidity providers.
A price level where falls have stalled before, as buyers stepped in. If price breaks below it, it often acts as resistance.
Overnight financing charge or credit on positions held past the broker's daily rollover time.
Holding positions for several days to a few weeks to catch larger moves than day trading.
An order that closes a winning trade when price reaches a level you set.
Using price and volume patterns on charts to forecast future price direction.
The smallest price change in a market, one step up or down.
A stop-loss that follows the price as it moves your way and stays put when it moves against you.
The share of the labour force that is looking for work. Most major economies publish it monthly.
How much and how often prices change. Higher volatility means larger, faster moves in both directions.
A remote computer you rent to keep MT5 and your EAs running when your own computer is off.
A sharp move one way and then back, which can stop out traders on both sides.
The income an investment pays, as a percentage of its price: interest on bonds, dividends on shares.
A market where one side's gain equals the other side's loss, before costs.
A demo account uses live prices and virtual money. You can see how margin, swap and stop-loss orders work before you trade with your own money.
CFDs use leverage. You can lose money quickly, and you can lose all of the money you deposit. Only trade with money you can afford to lose.
