Financial & Trading Glossary
A comprehensive A-Z reference guide to financial market terminology, risk metrics, and macroeconomics.
Ask Price
The lowest price a seller is willing to accept for an asset or currency pair.
Bid Price
The highest price a buyer is willing to pay for an asset.
Breakeven
The point at which gains equal losses, resulting in zero net loss or profit.
Central Bank Rate
The benchmark interest rate set by a central bank (e.g. Fed, ECB) influencing national inflation and currency valuation.
Drawdown
The peak-to-trough decline during a specific record period of an investment account.
Equity
Total account balance plus or minus current floating unrealized profits or losses.
FOMC
Federal Open Market Committee — the branch of the US Federal Reserve that sets national monetary policy.
Liquidity Sweep
When price rapidly breaches key high/low levels to execute pending stop orders before reversing.
Lot Size
A standardized measurement unit of quantity in forex trading (1 Standard Lot = 100,000 units).
Pip
Percentage in Point — the smallest standard unit of price movement for a currency pair (usually 0.0001).
Risk-Reward Ratio
The proportion of potential loss to potential profit on a trade setup.
Stop Loss
An automated order placed with a broker to buy or sell once the stock reaches a certain price, capping maximum loss.