Glossary

Trading basics

Bid and ask — The two sides of a price. You sell at the bid and buy at the ask; the gap between them is the spread.

Spread — The cost of entering and leaving a trade, built into the price rather than charged separately.

Lot — A unit of position size. In currencies one standard lot is 100,000 units of the base currency.

Pip — The smallest normal price step in a currency pair — 0.0001 for most, 0.01 for yen pairs.

Market order — Buy or sell now, at the current price.

Limit order — An instruction to trade at a better price than the current one, if it arrives.

Stop order — An instruction to trade at a worse price than the current one — used to enter on a breakout.

Stop loss — The price at which a losing trade closes automatically.

Take profit — The price at which a winning trade closes automatically.

Break-even — Moving your stop to your entry price, so the trade can no longer lose.

Partial close — Closing part of a position and leaving the rest running.

Measuring performance

Equity — What your account is worth right now, including open trades.

Balance — What your account is worth excluding open trades.

Realised P&L — Profit or loss on trades you have actually closed.

Drawdown — How far you have fallen from your highest point.

Win rate — The percentage of your trades that made money. On its own it means very little.

Profit factor — Money made divided by money lost. Above 1.0 is profitable.

Expectancy — What one average trade is worth to you.

R — One unit of the risk you took. A trade that makes twice what you risked made 2R.

MAE (maximum adverse excursion) — How far a trade went against you before it finished. Large MAE on winners means your stops are surviving on luck.

MFE (maximum favourable excursion) — How far a trade went in your favour. Much larger than what you took means you are closing early.

Sharpe ratio — Return measured against how much your results bounce around.

Sortino ratio — The same idea, but only counting downside movement.

TradifyFX terms

Session — One run through a piece of market history.

Strategy name — The label that groups your sessions, trades and chart setup together.

Replay — Moving forward through recorded history with the future hidden.

Bar by bar — Each step prints one finished candle.

Tick by tick — Each step advances a minute, and the candle builds in front of you.

Discipline score — How closely you followed the rules you set yourself at the start of the session.

Companion chart — An extra chart for context. It shares the clock but does not place trades.

Prop firm terms

Prop firm — A company that funds traders who pass its evaluation.

Challenge — The evaluation itself: hit a profit target without breaking the risk rules.

Profit target — How much you must make to pass.

Daily loss limit — The most you may lose in one day. Breaking it fails you immediately.

Maximum drawdown — The furthest you may fall from your peak across the whole attempt.

Two-step / one-step / instant funding — Common shapes of challenge, differing in how many stages there are and how tight the limits get.