Forex Trading Glossary

Currencies

How Pipnotic measures a currency on its own, not just one pair.

Currency strength: How a currency is doing against all of its tracked pairs at once: the average percentage move of every pair that contains it over a lookback, counted positive when it is the base and negative when it is the quote. See today's ranking →
Currency index: One price series for one currency, such as EURX for the euro, built from the same pairs as currency strength. A rising index means the currency is gaining against the rest. See the indexes →
Base and quote currency: In EUR/USD the euro is the base and the dollar the quote: the price is how many dollars one euro costs. The pair rises when the base strengthens or the quote weakens.
Pip: The standard unit of a forex price move: 0.0001 for most pairs and 0.01 for yen pairs.
Percentile (strength): Where today's strength reading sits in that currency's own history: the 90th percentile means stronger than 90% of its past readings.

The levels and shapes Pipnotic draws on the chart for you.

Buy and sell zones: Price areas where the market paused and then left sharply, leaving orders that may not have been filled. A buy zone sits below price and is where buyers stepped in; a sell zone sits above it and is where sellers did. Pipnotic detects them automatically and can alert you when a new one confirms.
Swing high and swing low: A bar whose high (or low) is the highest (or lowest) of the bars on each side of it. Pipnotic's automatic trendlines use three bars on each side, two on W1.
Trendline: A straight line through two or more swing highs (a falling line) or swing lows (a rising line). On Pipnotic a swing within 0.25 ATR of the line counts as a touch, and the line runs as a ray to the right edge of the chart.
Broken trendline: A trendline that a candle has crossed. Pipnotic ends the line at the break and can show it dashed.
Liquidity sweep: A brief move beyond a recent swing high or low, where stop orders cluster, followed by a move back inside.
ATR (Average True Range): The average size of a bar's range, including gaps from the previous close, usually over 14 bars. Used to size stops and as a yardstick for distances on the chart.

Other ways to draw price besides candles.

Heikin-Ashi: Candles built from averaged prices, which smooth out noise and make trends easier to see. Their opens and closes are not real traded prices.
Renko: A chart of fixed-size bricks that ignores time: a new brick forms only when price moves a set distance.
Point and figure: Columns of X (rising) and O (falling) that record only price moves of a set box size, with a reversal needing several boxes.

Is the market trending or ranging?

Market regime: Whether a market is trending up, trending down, breaking out, trending weakly or ranging. Pipnotic classifies it from ADX, the EMA(10)/EMA(30) relationship and ATR expansion.
ADX (Average Directional Index): A 0–100 measure of trend strength, not direction. Readings above about 25 are usually read as a trend.
Hurst exponent: A measure of whether a series tends to keep going (above 0.5), revert (below 0.5) or move at random (about 0.5).

Who holds what: futures traders and company insiders.

COT report: The CFTC's weekly Commitments of Traders report, which splits open interest in US futures into commercial hedgers, large speculators and small traders. See this week's report →
Speculators (non-commercials): Funds and large traders who hold futures for profit rather than to hedge.
Commercials: Businesses that use futures to hedge real exposure, such as an exporter's currency income or a miner's gold output.
COT Index: A group's current net position within its range over a lookback, here three years: 0 is the most short and 100 the most long it has been.
SEC Form 4: The filing US company insiders make within two business days of trading their own company's shares.
Insider cluster: Three or more insiders buying shares of the same company on the open market within 30 days.

What holding a position overnight earns or costs.

Carry: Holding the higher-yielding currency of a pair to earn the interest-rate difference between the two.
Swap (rollover): The interest a broker pays or charges for holding a position overnight, set by the rate difference minus the broker's markup. It can be negative on both sides.
Triple swap: The day a broker charges or pays three nights of swap to cover the weekend, usually Wednesday for forex.

How trades and track records are measured.

Position size: How many lots to trade so that hitting the stop loses the amount you chose to risk.
R multiple: A trade's result divided by the amount risked on it: losing the full stop is −1R, making twice the risk is +2R.
Expectancy: The average result per trade in R over a set of trades: win rate × average win − loss rate × average loss.
Drawdown: The fall from a peak in account equity to the following low, usually given as the largest one.

Currency strength today Currency indexes COT positioning

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Market data for information and education, not investment advice. Trading carries a high risk of loss.