REX TRADING SIGNAL
Forex glossary
65 plain-language definitions. Search by term or browse alphabetically.
Ask
The price at which a dealer offers to sell the base asset to you.
ATR
Average True Range, a measure of recent ranges that includes gaps relative to the prior close.
Backtest
A historical simulation of a rule, sensitive to data quality, costs and implementation assumptions.
Base currency
The first currency in a pair, whose units are being priced.
Basis risk
Risk that a hedge and the exposure it is intended to offset move differently.
Bid
The price at which a dealer offers to buy the base asset from you.
Breakout
A move beyond a predefined price boundary under a stated rule.
Candlestick
A display of open, high, low and close over one period.
Carry trade
An exposure seeking a financing advantage while retaining exchange-rate and other risks.
Central bank
An institution responsible for monetary functions defined by its mandate and jurisdiction.
CFD
A contract for difference referencing price changes rather than necessarily delivering the underlying asset.
Correlation
A measure of co-movement over a stated dataset; it can change and does not prove causation.
Counterparty risk
The risk that the other party fails to meet its obligations.
CPI
Consumer Price Index, a measure of price changes for a defined consumer basket under an agency’s methodology.
Currency cross
A currency pair that does not include the US dollar.
Divergence
A mismatch between a price extreme and a corresponding indicator extreme.
Diversification
Spreading exposures so outcomes are not wholly driven by the same risks.
Drawdown
The decline from a prior equity peak to a later value, usually expressed as a percentage.
DXY
A specific US dollar index with a defined currency basket; it is not every possible measure of dollar strength.
Economic calendar
A schedule of releases and events, usually with time, expected values and importance labels.
Equity
Account balance adjusted for open-position profit or loss and applicable charges.
Expectancy
Average expected outcome per trade under a model, including winning and losing outcomes and costs.
False breakout
A move beyond a boundary that fails to continue according to the strategy’s definition.
Fibonacci retracement
Proportional levels drawn between chosen swing endpoints; their usefulness requires testing.
Free margin
Equity minus margin in use, subject to a platform’s definitions.
Futures
Standardized exchange-traded contracts with specified terms, including expiration or settlement rules.
GDP
Gross Domestic Product, a measure of production within an economy during a specified period.
Hedge
An offsetting exposure intended to reduce a specified risk, potentially adding cost or basis risk.
Heikin Ashi
A transformed candle display whose values are not necessarily executable market prices.
Leverage
The ratio of exposure to the capital supporting it.
Limit order
An order that restricts the execution price but may never fill.
Liquidity
The ability to trade size with limited delay and price impact under prevailing conditions.
Look-ahead bias
Using information in a historical decision that was not available at that time.
Lot
A contract-size convention; a standard forex lot commonly represents 100,000 base units, while other products differ.
MACD
An indicator built from differences between exponential moving averages and a signal line.
Margin
Collateral required to support a position; it is not the maximum possible loss.
Margin call
A notification or condition related to insufficient margin under the provider’s rules.
Market order
An order seeking execution at available prices rather than guaranteeing a price.
Moving average
A rolling calculation that smooths historical observations.
NFP
Nonfarm payroll employment, part of the US employment report; revisions and other components also matter.
Notional value
The amount of market exposure represented by a position.
Out-of-sample
Data kept separate from rule selection to test how a method generalizes.
Overfitting
Adapting a model so closely to a sample that it captures noise rather than a stable relationship.
Pip
A conventional quote increment, often 0.0001 for non-JPY pairs and 0.01 for JPY pairs; check the instrument.
Pipette
A fraction of a pip, commonly one tenth.
Pivot point
A calculated reference level derived from a prior period’s prices, not a guaranteed turning point.
Quote currency
The second currency in a pair, used to express the price of the base currency.
R multiple
An outcome divided by the original planned cash risk of that trade.
Range
A price interval or a market condition described by repeated movement between boundaries.
Real yield
A yield adjusted for an inflation measure or expectation; the exact definition matters.
Resistance
A defined price area where prior behavior suggests supply or reduced buying; it can fail.
Risk-on / risk-off
Shorthand for broad risk appetite; assets can disagree and the label is not a trade signal.
Risk-reward ratio
A comparison of planned loss and planned gain; the ratio alone does not establish an edge.
RSI
A momentum calculation comparing recent gains and losses; extreme values do not guarantee reversal.
Slippage
The difference between an expected or requested execution price and the actual fill.
Spread
The difference between the current ask and bid; one part of transaction cost.
Stop out
Forced position reduction or liquidation when a margin threshold is breached.
Stop-limit order
A stop trigger followed by a limit order; execution may fail if the market passes the limit.
Stop-loss order
An instruction intended to exit at a trigger; ordinary stops do not guarantee the final execution price.
Support
A defined price area where prior behavior suggests demand or reduced selling; it can fail.
Swap
A financing adjustment associated with holding certain retail forex or CFD positions overnight.
Tick size
The smallest permitted price increment for a particular instrument.
Tick value
The cash value of one tick for a specified contract size, converted when needed.
Trend
A directional pattern measured over a specified timeframe and definition.
Volatility
The variability of price changes over a stated window and sampling method.
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