Forex Trading Concepts

These flashcards cover key vocabulary and concepts essential for understanding Forex trading.

Support

The lowest price point at which a security tends to stop falling and may begin to rise again.

Resistance

The highest price point at which a security tends to stop rising and may begin to fall again.

Bull Market

A market condition characterized by rising prices.

Bear Market

A market condition characterized by falling prices.

Candlestick Chart

A financial chart that displays the high, low, opening, and closing prices of an asset within a specific time frame.

False Breakout

When the price breaks through a level of support or resistance but quickly reverses direction.

Trend Line

A straight line that connects significant price points and is used to identify trend direction.

Fibonacci Retracement

A technical analysis tool that uses horizontal lines to indicate support or resistance levels based on the Fibonacci sequence.

Moving Average (MA)

A commonly used technical indicator that smooths out price data by creating a constantly updated average price.

Risk Management

The process of identifying, assessing, and controlling financial risks in trading.

Drawdown

The reduction of one's capital after a series of losing trades.

Position Sizing

Determining the amount of capital to allocate to a given trade based on risk tolerance and account size.