Glossary
Trading terms, in plain English.
No jargon for its own sake. These are the words you'll meet across Forex, Crypto, Gold, Bank Nifty, Nifty, F&O and Stocks — defined clearly, the way we use them. Education, not advice.
- Ask
- The price at which the market (or your broker) will sell an instrument to you — the higher side of the quote.
- Bank Nifty
- NIFTY Bank — an Indian index of the most liquid, large-cap banking stocks listed on the NSE. Very actively traded in F&O.Read: how to trade Bank Nifty →
- Bid
- The price at which the market will buy an instrument from you — the lower side of the quote.
- Breakout
- When price moves beyond a defined support or resistance level, often signalling the start of a new move.Read: breakout trading explained →
- Call option (CE)
- A contract giving the right, not the obligation, to buy an underlying at a set strike price before expiry.Read: call vs put options →
- Confluence
- When several independent signals or factors point the same way, strengthening the case for a setup.
- Drawdown
- The peak-to-trough decline in account equity, usually shown as a percentage. Surviving drawdowns is central to longevity.Tool: drawdown recovery calculator →
- Expectancy
- The average amount you can expect to win or lose per trade over many trades, given your win rate and average R.Tool: compounding & R calculator →
- Expiry
- The date on which a futures or options contract settles. Indian index options have weekly and monthly expiries.Read: options expiry day explained →
- F&O
- Futures and Options — derivative contracts whose value derives from an underlying index or stock, allowing leveraged positions.Read: F&O options basics →
- Leverage
- Using borrowed capital to control a position larger than your deposit. It amplifies both gains and losses.Read: leverage & margin explained →
- Liquidity
- How easily an instrument can be bought or sold without moving its price. Deep liquidity means tighter spreads and cleaner fills.
- Long
- A position that profits if the price rises. To 'go long' is to buy expecting an increase.
- Lot
- A standardised trade size. In Forex a standard lot is 100,000 units of the base currency; mini and micro lots are smaller.Tool: pip value calculator →
- Margin
- The capital your broker requires you to post to open and hold a leveraged position.Read: leverage & margin explained →
- Margin call
- A demand to add funds (or have positions closed) when your equity falls below the maintenance margin requirement.Read: what is a margin call? →
- Nifty 50
- The benchmark index of India's NSE, comprising 50 of the largest, most liquid companies across sectors.Read: Nifty 50 explained →
- Pip
- The smallest standard price move in a Forex pair, usually the fourth decimal place (0.0001) for most pairs.Read: what is a pip? →
- Position sizing
- Calculating how large a trade to take so that hitting your stop loses only a fixed, small percentage of your account.Tool: position size calculator →
- Put option (PE)
- A contract giving the right, not the obligation, to sell an underlying at a set strike price before expiry.Read: call vs put options →
- R-multiple
- A way to express trade outcomes in multiples of the amount risked (R). A win of 2R made twice what you risked.Tool: compounding & R calculator →
- Regime filter
- A check that assesses whether current market conditions (liquidity, news, volatility) are favourable before allowing a trade.
- Resistance
- A price zone where selling has historically capped a rise — a ceiling.Read: support & resistance basics →
- Risk-reward ratio
- The ratio of potential reward to the risk on a trade. A 1:3 trade risks one unit to potentially make three.Tool: risk-reward calculator →
- Short
- A position that profits if the price falls. To 'go short' is to sell expecting a decline.
- Slippage
- The difference between the expected price of a trade and the price at which it is actually executed.
- Spread
- The difference between the bid and ask price. A narrower spread means lower cost to enter and exit.
- Stop-loss
- A pre-set order that closes a trade at a defined level to cap your loss if price moves against you.Read: stop-losses explained →
- Strike price
- The fixed price at which an option can be exercised.
- Support
- A price zone where buying has historically been strong enough to pause or reverse a decline — a floor.Read: support & resistance basics →
- Take-profit
- A pre-set order that closes a trade at a target level to bank a gain.
- Theta
- The rate at which an option loses value as time passes (time decay), all else equal.
- Trend
- The general direction of price over a period — up, down or sideways (ranging).
- Volatility
- The degree of price variation over time. Higher volatility means larger moves and larger risk.Read: volatility explained →
- Win rate
- The percentage of trades that close profitable. On its own it says little without the average risk-reward.Tool: break-even win rate →
- XAU/USD
- The ticker for spot gold priced in US dollars — the standard way gold is quoted in Forex and CFD platforms.Read: how to trade gold (XAU/USD) →