Trading glossary: all the Forex, Crypto and Stocks vocabulary
Just starting or want to clarify a term? The ActuTrading glossary gathers the 34 most-used trading concepts, explained without jargon, with concrete examples. Pip, lot, spread, leverage, halving, DeFi, RSI, drawdown… everything you need to trade with confidence.
▸Forex· 6 terms
Pip
A pip is the smallest price movement on the Forex market, usually the 4th decimal (or 2nd for JPY pairs).
Lot
A Forex lot is 100,000 units of the base currency. Mini-lots (10,000), micro-lots (1,000) and nano-lots (100) also exist.
Spread
The spread is the gap between the ask (buy) price and bid (sell) price of a pair. It's the broker's hidden commission on each trade.
Leverage
Leverage lets you open a position much larger than your actual capital. 30:1 leverage = trade $30,000 with $1,000 collateral.
Margin
Margin is the collateral your broker locks to open a leveraged position. Calculated as a % of the position size.
Carry trade
Strategy of borrowing in a low-yield currency to invest in a high-yield currency and pocket the rate differential.
▸Crypto· 9 terms
Halving
The Bitcoin halving cuts miner rewards in half every 4 years. A scarcity mechanism that reduces BTC inflation.
Stablecoin
Cryptocurrency pegged to a stable asset (usually US dollar) to avoid crypto volatility. USDT, USDC are the leaders.
DeFi
Decentralized finance: blockchain protocols that replicate banking services (loans, exchanges, derivatives) without intermediaries.
Staking
Lock cryptos to secure a Proof-of-Stake network and earn rewards (3-15% APY depending on chains).
Smart contract
Self-executing code on a blockchain that activates automatically when predefined conditions are met. Foundation of DeFi.
Wallet
Software or hardware that stores the private keys giving access to your cryptos. 2 types: hot (online) and cold (offline).
Gas fees
Transaction fees on blockchains (Ethereum, Solana). Paid to validators for executing the smart contract. Fluctuate with network congestion.
HODL
Crypto buy-and-hold strategy through volatility. Born from a viral typo in 2013, now a community philosophy.
Layer 2
Scalability solutions built on Ethereum (Arbitrum, Optimism, Base) that cut gas fees by 90%+ while inheriting security.
▸Trading· 10 terms
Stop-loss
A stop-loss is an automatic order that closes your position as soon as a preset loss threshold is hit. It's your mandatory airbag.
Take-profit
A take-profit is an automatic order that closes your position when a profit target is hit. It locks in gains without supervision.
CFD
A CFD (Contract for Difference) is a derivative that lets you speculate on the rise or fall of an asset without owning it.
Slippage
Slippage is the gap between the requested price and the actual fill price of an order, due to liquidity or market speed.
Drawdown
Drawdown is the maximum decline of a trading account from a peak to a trough. Measures temporary loss before recovery.
Short selling
Short selling means betting on an asset's decline by selling it without owning it, to buy it back lower.
Volatility
Volatility measures the amplitude and speed of an asset's price changes. High volatility = higher risk and opportunity.
Liquidity
Market liquidity measures the ability to absorb orders without moving price much. High liquidity = tight spreads, low slippage.
ETF
An ETF (Exchange Traded Fund) is a stock-exchange-listed fund replicating an index, sector or commodity. Ultra-low fees vs active funds.
DCA
DCA (Dollar Cost Averaging) means investing a fixed amount at regular intervals, regardless of price. Smooths out volatility.
▸Technical analysis· 6 terms
RSI
The RSI (Relative Strength Index) measures the speed and magnitude of price moves on 0-100. >70 = overbought, <30 = oversold.
MACD
The MACD (Moving Average Convergence Divergence) compares two moving averages to detect changes in trend and momentum.
Support and resistance
Price levels where supply and demand reverse: support below current price (buying), resistance above (selling).
Bollinger bands
Volatility indicator made of a moving average flanked by 2 bands at ±2 standard deviations. Measures price over-extension.
ATR
ATR (Average True Range) measures an asset's average volatility over N periods. Critical to calibrate stops and take-profits.
Fibonacci retracement
Charting tool projecting likely support/resistance levels (38.2%, 50%, 61.8%) based on the Fibonacci sequence.
▸Economy· 3 terms
NFP
NFP (Non-Farm Payrolls) is the monthly US non-farm employment report. Released the 1st Friday of each month, it's the most volatile Forex event.
CPI
CPI (Consumer Price Index) measures inflation: the price change of a basket of consumer goods and services.
FOMC
The FOMC (Federal Open Market Committee) is the Fed's policy-setting body. Meets 8 times/year, intensely watched by markets.
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The glossary is regularly updated. If a concept is missing, drop us a line at [email protected] and we'll add it.