Glossary

Japanese candle

Graphical representation of a period containing open, high, low, and close.

• #Pattern

Body

Rectangle between open and close of a candle. Measures the winning side’s conviction.

• #Pattern

Wick

Thin line above or below the body. Indicates a level rejection.

• #Pattern

Marubozu

Candle with no notable wicks: one side controlled the whole session.

• #Pattern

Doji

Candle whose open and close are nearly identical. Pure indecision.

• #Pattern

Hammer

Small body on top, long lower wick. Low rejection at the end of a downtrend.

• #Pattern

Engulfing

Candle whose body fully engulfs the previous candle’s body.

• #Pattern

Morning star

Three‑candle bullish reversal at the end of a downtrend.

• #Pattern

Trend

Sequence of highs and lows in one direction: HH/HL up, LL/LH down.

• #Level
• #Trend

Range

Oscillation zone between support and resistance, no clear trend.

• #Level

Support

Level where buyers historically step in and stop a decline.

• #Level

Resistance

Level where sellers historically step in and stop a rise.

• #Level

BoS (break of structure)

Clean break beyond the last key point of the sequence. Confirms a shift.

• #Level
• #Trend

Pullback

Temporary counter‑move within a larger trend.

• #Level

Fakeout

Level break that returns inside. Liquidity hunt, not a signal.

• #Level

Multi‑timeframe

Combined read across multiple timeframes to align trend, timing, entry.

• #Level

Psychological level

Round number (100, 1.10, 10,000) where many orders cluster.

• #Level

1% rule

Never risk more than 1% of capital on a single trade.

• #Sizing

Position size

Unit quantity computed from accepted risk and stop distance.

• #Sizing

Stop

Automatic exit order placed where the setup becomes invalid.

• #Sizing

Expectancy

(Win rate × Avg win) − (Loss rate × Avg loss). The engine of a system.

• #Basics

R:R (Risk/Reward)

Ratio between potential loss and potential gain of a trade.

• #Basics

Drawdown

Temporary decline of capital from its last peak.

• #Basics

Risk of ruin

Probability of going to zero under given parameters.

• #Basics

Pyramiding

Adding to a winning position in steps, never to a losing one.

• #Basics

Trailing stop

Stop that follows price in the favourable direction and never moves back.

• #Sizing

Spread

Gap between ask and bid prices.

• #Order

Slippage

Gap between expected order price and actually executed price.

• #Order

Leverage

Position multiplier. Amplifies gains and losses equally.

• #Order

Margin

Collateral held by the broker to maintain a leveraged position.

• #Order

Pip

Smallest price change of an FX pair (usually 0.0001).

• #Order

Lot

FX size unit. 1 standard lot = 100,000 base units.

• #Order

Order block

Zone where an institution placed orders. Potential future support.

• #Order
• #Volume

VWAP

Volume Weighted Average Price: volume‑weighted average price over the session.

• #Order
• #Volume

FOMO

Fear of missing out. Pushes you to enter after most of the move is gone.

• #Bias

Revenge trading

Re‑entering after a loss to "make it back". Destroys expectancy.

• #Bias

Anchoring

Bias that anchors your decision to an arbitrary past price (entry, high, etc.).

• #Bias

Tilt

Emotional state where decision quality drops. Recognise it, stop.

• #Bias

Trade journal

Logbook: entries, reasons, exits, R earned, lesson. Builds your statistics.

• #Bias

Pre‑mortem

Before opening a trade: describe how it will fail and accept the scenario.

• #Bias