BERITA FOREX

With all the squabbling around surging crude prices, now is as good a time as any to talk about where our oil comes out of the ground. For a long time, the Middle East has had a reputation for being the world’s petrol pump, but how true is this today? From the 1960s onwards, the Gulf has indeed been a dominant region for oil production, with Saudi Arabia contributing the bulk of exports and Iran, Iraq, the UAE and Kuwait bringing up the rear. Except for a brief period in the mid-1980s, the Middle East produced more oil than any other region on the planet, by a sizeable margin. The United States and Russia (at the time the Soviet Union) were typically the second and third largest producers respectively, while the rest of the world combined to fill in the gaps. From the Arab perspective however, the early days presented a major problem. At the time, oil extraction in the Gulf states was in the hands of Western oil companies, often called the “Seven Sisters”, including the likes of British Petroleum, Shell, Chevron, ExxonMobil, etc. Local governments in the Middle East received royalties but had little to no say over the decisions made by these companies. Despite sitting on vast reserves, the countries in question were almost powerless on the world stage. Something had to change. OPEC, or the Organisation of the Petroleum Exporting Countries, was formed in 1960 and included Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The group was founded to wrestle control of its hydrocarbon resources out of the hands of foreign powers and back into the hands of its member states. The group would gradually add new members to its roster, slowly gaining prominence and quietly clawing back control over the years that followed. Oil prices remained stable throughout the 1960s at around $2.50 per barrel (roughly $25 in today’s money), but by the next decade OPEC had doubled its membership count and had gained enough autonomy to allow the organisation to control the supply, and therefore price, of oil on the world stage. Things were about to change dramatically. In 1973, Egypt and Syria attacked Israel. As a result of Western support for Israel following the attack, OPEC imposed an oil embargo on the US and Western Europe, quadrupling prices within months and causing petroleum shortages. OPEC used its new-found might to launch an all-out price war, which it decisively won. The organisation proved, convincingly, that it had a stranglehold over global oil markets, which gave the United States a proverbial kick up the backside to secure its own position. OPEC’s strength would remain unchallenged over the following decades, and indeed until the modern era. But then something changed. Something changed because of a specific technological breakthrough. Something that would completely upend the international balance of crude oil production. Enter: shale. Extracting oil from shale rock is difficult, hence why it was not done at scale until recently. Fracking was first tested all the way back in the 1940s but did not become economically viable until much more recently. In the early 2000s, hydraulic fracturing, combined with horizontal drilling, suddenly made extracting oil from shale an industrial possibility. This turned out to be a game changer. The US sits upon massive shale fields, the most prominent of which being the Permian Basin. If these shale fields were the vault, then fracking was the key. Not only could the US finally exploit its oil fields, but it could do so relatively efficiently. Extracting oil from shale has several major advantages. Firstly, setting up drilling operations take weeks or months, compared to multiple years for large, conventional oil fields. Secondly, initial costs are minor and incremental, unlike traditional operations, which require billions in investment upfront. Thirdly, shale exploitations are extremely flexible. Environmental and bureaucratic concerns are obviously nothing trivial when it comes to fracking, but shale is much easier to set up and start pumping compared to the colossal headache of regular oil drilling. Offshore deep-water drilling is another beast entirely, sometimes requiring a decade of groundwork before the first drop of oil is produced. The floodgates opened. In 2010, the US was pumping out 5 million barrels of oil per day. At the tail end of 2025, that figure rose to almost 14 million barrels per day. Hard to argue with such results. The increase in domestic production caused a fundamental shift in global oil markets. The surge in oil extraction meant that the US turned from a net importer to a net exporter of crude oil. Quite suddenly, the US was producing more crude oil than it needed, something that had not happened since the early twentieth century. The additional supply of crude oil from America diluted OPEC’s influence on the world stage, and the group of oil producing nations was not happy about it. In 2014, the organisation once again started throwing its weight around, but this time, instead of tightening the supply of oil, Saudi Arabia and other countries began to flood the market with massive amounts of crude, in an attempt to lower prices as much as possible. They were successful. The price of oil went from over $100 per barrel in 2014, down to $30 per barrel by January 2016. The goal was to drive US producers out of business. Given the novelty of the shale business at the time, extraction operations in the United Stated were still relatively costly compared to Gulf drilling, so the idea was to drive the price per barrel below what it would cost US companies to extract from the ground. It was similar to the strategy that Subway used back in 2008 when it launched the $5 footlong to increase the company’s foot traffic and undercut its competitors in a bid to gain market dominance. The first price war in 1973 was an undeniable success and showed the world who really wore the trousers in the global oil relationship. In contrast, the second price war failed with flying colours. The collapse in oil prices did indeed cause a degree of short-term pain in the United States, resulting in many bankruptcies and many more job losses, but ultimately the event forced the US to become more efficient, more technologically advanced, and more economically resilient. The results speak for themselves; US shale operations continued to ramp up over the following decade, finally reaching the current paradigm whereby the United States dwarfs all other nations in terms of crude oil production. OPEC no longer had the gravitas to dictate oil markets, that much was clear. The answer? Add more members. OPEC+ formed at the end of 2016 as a direct result of growing American influence in international oil markets. The 13 members of the original group welcomed 10 more countries, including Russia, Mexico, Sudan, as well as a wave of countries from across Central and South East Asia. OPEC boasts over a quarter of the globe’s oil production, but OPEC+ extends that to more than half. On the other hand, just by themselves, the US and Canada also produce a quarter of all crude oil worldwide, the vast majority of which comes from the United States. While the inner core of OPEC remains well coordinated and responsive to market fluctuations, the same cannot be said of OPEC+, which is a much more flexible group. The interests of Saudi Arabia do not necessarily line up with those of Russia for example. The lack of internal cohesion, as well as the lack of enforcement in production targets, often translates to lesser effectiveness overall. In contrast, the US is a single nation, one that now produces as much crude oil and other liquid fuels as Saudi Arabia and Russia combined. Oil markets are in a new era. Just as the formation of OPEC disrupted the status quo in the 1960s, shifting the balance of power away from Western petroleum companies and towards Middle Eastern nations, the US shale revolution has likewise tipped the scales, this time in favour of the United States. International crude markets are in unchartered waters; the old rulebook has been discarded. The Middle East remains vital for European and Asian oil markets, but not for the United States. The consequences of this simple fact are far reaching, particularly in light of current events.

Markets have stabilised a little over the past couple of days, with the US dollar making a minor retreat from recent highs. The DXY remains above 99.5 but has halted its relentless push higher for the time being. Gold has been almost completely flat so far this week, oscillating around the $5,000 mark and content to go no further. Stock markets around the world rose cautiously during the last two sessions and Asian stocks were on the front foot again earlier today, with the Nikkei 225 being uplifted by better-than-expected balance of trade data this morning in Japan. US futures contracts edged higher last night, but market sentiment remains temperamental ahead of the FOMC meeting later today. Even oil prices have calmed down in recent days, with Brent Crude stable around $100 per barrel and the WTI index falling to $94 following reports of a surprise build-up in US crude inventories. Attentions are quickly turning to the FOMC meeting later today. The Fed is not expected to enact a rate cut on the dollar any time soon, but market participants will nevertheless be eager to know what the central bank has to say about rising oil prices and the downstream threat of inflation. The meeting will be Jerome Powell’s second-to-last at the helm of the Fed, that is unless there are delays in appointing the next Chairman. Kevin Warsh is the next in line but has yet to be officially confirmed by the US Senate, a process that is being held up because of a legal dispute involving Jerome Powell. Before the meeting, traders may want to keep an eye on US PPI figures, which will give an insight into rising production costs. The crypto sphere received a surprising dose of good news yesterday following a joint statement from the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC), asserting that most cryptocurrencies are not securities. The ruling is very straightforward, but cryptocurrency traders have been waiting for over a decade to hear it. According to SEC Chairman Paul Atkins, “this interpretation will provide market participants with a clear understanding of how the Commission treats crypto assets under federal securities laws”. In many ways, the interpretation marks the end of an era of uncertainty, one that has mired the industry for a long time and slowed development to a crawl in recent years. Not much of a reaction in cryptocurrencies so far this morning, with Bitcoin keeping to $74,500 per coin and the wider crypto markets staying the course. #FOMC #SEC #CRYPTO

If forex trading is like a polite dinner party, oil trading is like a full-on bar fight between two rival biker gangs hard at it! Brent crude oil is one of the most actively traded commodities in the world, and it doesn’t just “move”, it reacts. One headline, one unexpected geopolitical escalation, or one disrupted shipping route, and suddenly the market is doing things that make absolutely no sense… until you realise, they make perfect sense. Right now, oil is being driven heavily by tensions involving Iran, the United States, and the wider Middle East. This has created the kind of environment traders both love and fear: high volatility, strong trends, and unpredictable spikes. In this guide, you’ll learn: The term Brent crude oil refers to one of the main global benchmarks used to price oil worldwide. There are two main oil benchmarks: Brent tends to be more relevant for global traders because: Brent crude is attractive because it offers: In simple terms: If EUR/USD is the “calm professional”. Brent crude is the “risk taking rookie” Oil prices are technically based on supply and demand, but in reality, they’re driven by expectations of supply and demand. Oil is one of the few markets where global conflict directly affects price. Current tensions involving Iran and the United States have created: Markets react instantly because: Less supply = higher prices This narrow shipping route is one of the most important trading routes in the world. Approximately: 20% of the oil produced in the world has to sail through the Strait of Hormuz. So, when tensions rise here: Think of it as: The world’s most important traffic jam or the current situation; the world’s emptiest motorway as hardly any ships are passing through. Supply shocks occur when oil production is suddenly reduced. Causes include: And when supply drops suddenly: Prices don’t gently rise, they spike Oil is heavily influenced by sentiment. This leads to: Overreactions Sharp reversals “What just happened?” moments To trade oil effectively, you need to know what actually moves it. Oil demand is tied to economic activity. Key data includes: Weekly inventory data is one of the most important short-term drivers. Indirect but important. Higher interest rates: Lower rates: If you’re coming from forex, oil trading will feel… different. Oil is one of the most exciting, and dangerous, markets. In simple terms: Oil gives opportunity. But demands respect Let’s get practical and put our sensible heads on for a minute. Oil reacts strongly to: But remember: The first move is emotional. The second move is tradable During geopolitical events, oil trends can last longer than expected. Approach: Identify trend → Wait for pullback → Enter with confirmation Important levels include: These act as: Support/resistance zones Best results come from: Let’s go one level deeper. Oil often breaks strongly during news events. Approach: Safer for beginners. Advanced but powerful. When markets stabilise: Oil is most active during: Oil doesn’t move alone. The Canadian Dollar for example is a commodity currency Let’s break it down like a professional oil trader. Let’s be blunt: Oil is unforgiving and downright ruthless Oil can move: Entering late = You get caught out and incur losses Oil is news-driven, always keep an eye out on the news, it is a must have survival aid when trading oil! Fast account destruction: don’t do it otherwise you will have red margin call warnings all over your screen in no time at all. Volatility amplifies emotions. Trading oil is not for the faint hearted but if you like you’re trading to be fast then trading oil will fit the bill. Yes, but carefully. Very carefully. Yes, oil trading can be profitable due to its volatility and strong trends, but it requires discipline and effective risk management. Geopolitics, supply disruptions, OPEC decisions, and global demand are the primary drivers of oil prices. Yes, beginners can trade oil, but they should start with a demo account and use proper risk management strategies. The best time is during the London and New York sessions, especially during major news events or inventory releases. Study fundamentals, follow global news, practice on a demo account, and gradually apply technical analysis strategies. Trading Brent crude oil is not for the faint-hearted. It’s fast. It’s reactive. And at times, it feels completely irrational. But that’s exactly what makes it one of the most opportunity-rich markets available. Right now, with geopolitical tensions driving volatility, oil offers: Approach it with discipline, and it can become a powerful addition to your trading strategy. Approach it recklessly… And oil will happily teach you a very expensive lesson.

This document serves as an annexe to the article entitled "Year of the horse", published on the 26th of February 2026. Its purpose is that of a supporting paper, providing additional figures and calculations, as well as providing a more robust defence of the methodology used and the assumptions made therein. The first step was to collect the daily close prices for the S&P 500 index, from the 20th of January 1928 to the 13th of February 2026. The data were obtained from the Yahoo Finance API, which provided the date, open price and close price. The data set only started differentiating the open and close price from 1962 onwards, but since we are only concerned with the closing price, this was not an issue. We will call this data set "SP500". The second step was to collect the start and end date for every Chinese lunar year stretching back to the same date. Such information is readily available throughout the internet and was easy to acquire. We will call this data set "CNY". With our two data sets in hand, the next step was to create a column with the daily close price of the S&P 500 at the end of every lunar year. To achieve this, we use a simple XLOOKUP function in order to return a result whenever the dates from CNY match those in SP500. Of course, the dates in CNY do not always correspond to days for which we have daily price data. For example, should the lunar year end on a Saturday, Sunday, or bank holiday, SP500 will not be able to provide a price. This was in fact the case for the latest lunar year, ending on the 16th of February 2026, which was a Monday, but happened to fall on President's Day, meaning US stock markets were closed. To account for these differences, we insert a "-1" in the fifth argument in our XLOOKUP function, in order to return the last available match. Using this function, we can populate a new column with the closing price for the end of every lunar year. From this, calculating the change from the previous year is trivial. We now have the yearly return of the S&P 500 according to the Chinese lunar calendar: The next step is to average these values across each zodiac animal using a simple AVERAGEIF function: The next step is to calculate the volatility over every lunar year. This first requires establishing a suitable metric against which we can actually quantify volatility. Finding the high and low of a given year and dividing by its mean gives us the relative spread of each period, which is somewhat useful for illustrating the size of the overall trading range, but fails to describe how much the results cluster around the mean. A more useful measure of volatility is to calculate the standard deviation across a given year, which tells us exactly how grouped together or spread out the daily close prices are. Using a STDEV.S function in combination with a FILTER function, we are able to calculate the standard deviation for each lunar year by filtering price data by date range. We now have the standard deviation for each period, but these results do not account for the huge difference in absolute values over time. A standard deviation over a 10-point range is obviously going to be smaller than the standard deviation over a 1,000-point range. To account for this, we simply divide the standard deviation by the mean, thereby normalising the results. This figure is called the coefficient of variation, also known as normalised root-mean-square deviation (NRMSD), which is often used in economic models and represents a measure of the extent of variability in relation to the mean of a given data set. We are content that this is an adequate description of volatility as we wish to model it. Full results presented below: Averaging our coefficient of variation values across each zodiac animal, we obtain the following table: We now have a quantified measure of volatility, per animal. The next step is to ascertain whether or not the spreads in average returns and average volatility are meaningful. With a low of -1.0 and a high of 15.5, the spread in average returns looks significant. Likewise, with a low of 5.06 and a high of 8.25, we have what looks like a reasonably wide spread in volatility. Alas, looks can be deceiving. We need to determine just how significant these spreads really are. One way of doing this is to perform a permutation test. The purpose of performing such a test is to see what the results would be if we attributed the yearly results to a random animal instead of to its actual animal. To achieve this, we create a column that randomly assigns a zodiac sign to each year, and then calculate results according to these random signs. We then collect the spread in average returns and coefficients of variation to see how they measure up against our original data set. As per the above table, for average returns, we have a minimum of -1.0 and a maximum of 15.5, giving us a spread of 16.4. For the coefficient of variation, we have a minimum of 5.06 and a maximum of 8.25, giving us a spread of 3.19. Running the permutation test over many cycles, we compare the obtained spreads against these results. Predictably, the randomly calculated spreads are significantly higher than our original results. Put differently, if we were to assign zodiac animals to random years, we would likely obtain a higher spread in average returns and in volatility, per animal, than what we actually got. This tells us that there is no correlation whatsoever between the performance of the S&P 500 index and the Chinese lunar calendar. This confirms what we would realistically expect. US stock markets have historically followed cyclical patterns that are shorter than the 12-year zodiac cycle, blurring the results over the lunar calendar. More broadly speaking, there is little reason to expect an American stock market index to correlate to the Chinese lunar calendar, and it indeed does not. This is where things get a little more interesting. We repeat the exact same steps for the Japanese Nikkei 225 index as we did for the S&P 500. Firstly, the return of the Ni225 according to the lunar calendar: The next step is to average these values across each zodiac animal using a simple AVERAGEIF function: As noted in the main article, the spread in average returns is significantly greater than those found in the S&P 500. Using the same methodology as for the S&P 500 data set, averaging our coefficients of variation across each zodiac animal, we obtain the following table: As per the above table, for average returns, we have a minimum of 0.3 and a maximum of 23, giving us a spread of 22.7. For the coefficient of variation, we have a minimum of 5.30 and a maximum of 12.22, giving us a spread of 6.92. We run the same permutation test as above, randomising zodiac animals per year. This time, we notice a difference. For the average returns, the randomly calculated spreads are typically higher than our spread of 22.7, suggesting that just as with the S&P 500, the average return of the Nikkei 225 does not correlate with the lunar calendar. However, when calculating spreads in volatility, we quickly notice that the randomised spreads are lower than our original spread of 6.92. Put differently, if we were to assign zodiac animals to random years, we would likely obtain a lower difference in volatility than what we actually got. This tells us that there is in fact a correlation between the volatility in the Nikkei 225 and the Chinese lunar calendar. As stated in the main article, a possible explanation to this lies in the longer economic cycles that dominated the Japanese financial sphere after the second world war, but if that is the case, it is odd that the same correlation does not appear in the average return of the index. Whether or not the Chinese lunar calendar actively influenced sentiment on the trading floor of the Tokyo Stock Exchange over the decades would be almost impossible to prove. It is nevertheless interesting that volatility in the Nikkei index does appear to correlate with the Chinese Zodiac, even when the performance of said index does not. ← Back to article: Year of the horse

The situation is much the same as it was at the start of last week. The conflict in Iran continues, disrupting crude oil deliveries out of the region, lifting oil prices to the hundred-dollar mark. The Brent Crude benchmark is currently sitting at $104 per barrel, while WTI is trailing behind at $98. The biggest surprise for many is just how resilient the US dollar has proven to be. The DXY rose to a weekly close of 100.5 last Friday, a level not seen since May of last year. The Euro, which makes up the bulk of the dollar currency index, fell to $1.14 last week, while the Pound Sterling sank to $1.32. On the other hand, the yen is demonstrating a degree of tenacity, refusing to be pushed above 160, at least for the time being. The strength of the dollar is the dominant force in financial markets at the moment, to the detriment of almost everything else. Stock markets around the world continue to be rattled by current affairs, weighing particularly heavily on US and Asian indices. The Nikkei 225 plummeted a further 3.2% last week, while the Korean Kospi index shed 1.8%. Over in the US, the Dow Jones had lost 2% by Friday, while the S&P 500 and Nasdaq had fallen 1.6% and 1.3% respectively over the course of the week. Precious metals were hit just as hard, if not harder, with gold losing the better part of 3% and closing just above $5,000 per ounce by the weekly close. Likewise, silver, platinum and palladium all lost 5% or more. In an increasingly strange twist of fate, cryptocurrencies are finally showing signs of life after months of continuous bleeding. Bitcoin gained 10% last week, rising to $72,000 per coin and dragging the rest of the crypto markets along for the ride. JPMorgan chimed in with an interesting take last month, stating that Bitcoin’s volatility relative to gold has dropped to a record low, making BTC “even more attractive compared to gold”. Bitcoin has indeed been a more profitable investment since the comments were made in early February, and indeed since the initial strikes against Iranian targets. Big week for central banks. The Reserve Bank of Australia will meet tomorrow and is expected to increase rates on the Aussie dollar for the second consecutive time, in large part because of a troubling resurgence in inflation. All eyes will quickly turn to the Fed the following day, as the Federal Open Market Committee convenes on Wednesday to vote on the next course of action for the dollar. The odds of a rate cut are essentially zero; in fact, interest rate traders are not predicting a rate cut until December at the earliest. The Bank of Canada will also meet on Wednesday and will likely hold rates steady on the Canadian dollar. On Thursday, it is the turn of the Bank of England, Bank of Japan and European Central Bank, all of which are expected to enact a rate hold on their respective currencies. Very little is going on with regard to the earnings calendar, with the exception of Micron (MU), which will report after the bell on Wednesday. #USD #BTC #OIL

SAHAM Forex terminology is the collection of words, phrases, and trading jargon used by traders to analyse markets, place trades, and manage risk. If you're new to forex trading, learning the language of the market can make a huge difference. Understanding common forex terms helps you read trading platforms more confidently, follow market analysis, and avoid costly misunderstandings when placing trades. Think of this guide as your quick-reference forex glossary. Rather than jumping between dozens of different articles, you'll find the most important forex terminology grouped into easy-to-follow categories, making it simple to find the definitions you need when you need them. Forex terminology is the collection of terms and expressions used in the foreign exchange market to describe currencies, trading activity, price movements, risk management, and market analysis. Put simply, forex terminology is the language traders use every day. Learning these key terms can help beginners understand how the market works and make more informed trading decisions. Ready to put your knowledge into practice? Explore a live trading account and experience how these terms apply in real market conditions. Currency pairs are the foundation of forex trading because every forex transaction involves buying one currency and selling another. To keep things simple, we'll use EUR/USD throughout this section as our example. A currency pair is two currencies quoted against each other in the forex market. In forex trading, a currency pair shows how much of one currency is needed to buy another. For example, EUR/USD compares the euro against the US dollar. Every forex trade involves a currency pair, making it one of the first concepts every beginner should understand. Key points: Read more：What Is a Forex Currency Pair and How It Works in Forex The base currency is the first currency listed in a currency pair. In EUR/USD, the euro (EUR) is the base currency. The exchange rate tells you how much of the quote currency is needed to buy one unit of the base currency. Key points: The quote currency is the second currency listed in a currency pair. In EUR/USD, the US dollar (USD) is the quote currency. It shows how much of the quote currency is required to purchase one unit of the base currency. For example, if EUR/USD is trading at 1.1000, it means one euro is worth 1.10 US dollars. Key points: An exchange rate is the price of one currency expressed in another currency. In forex trading, exchange rates constantly fluctuate as supply and demand change. If EUR/USD rises from 1.1000 to 1.1200, the euro has strengthened relative to the US dollar. In short, the exchange rate is the price tag attached to a currency pair. Key points: A pip is the standard unit used to measure price movement in most currency pairs. For most forex pairs, a pip represents the fourth decimal place. Traders use pips to measure profits, losses, and market movement. Pips matter because they provide a universal way to discuss price changes across the forex market. Key points: Read more：What are pips in forex and how to calculate their value A pipette is one-tenth of a pip. Many modern brokers quote prices with an additional decimal place for greater pricing precision. In most currency pairs, a pipette appears in the fifth decimal place, while JPY pairs typically use the third decimal place. Key points: Read more：What are pips in forex and how to calculate their value A lot is the standardised size of a forex trade. Rather than buying individual currency units, traders typically trade in lots. Different lot sizes allow traders to scale their position sizes according to their account balance and risk tolerance. This is why understanding lot sizes is essential before placing your first trade. Key points: Forex orders are the instructions traders give to their broker to enter or exit the market under specific conditions. Understanding the different order types can help you control how trades are executed and manage risk more effectively. Read more：Types of Forex Orders: A Complete Beginner's Guide A market order is an instruction to buy or sell a currency pair immediately at the current available market price. This is the most common order type used by traders. Once submitted, the broker attempts to execute the trade as quickly as possible at the best available price. Key points: A limit order is an instruction to buy or sell a currency pair only at a specified price or better. Unlike a market order, a limit order will not execute unless the market reaches the trader's chosen price level. This gives traders greater control over their entry or exit price. Key points: A stop-loss order is an instruction that automatically closes a trade if the market moves against you by a specified amount. Put simply, a stop loss acts as a safety net. It helps limit potential losses and removes some of the emotion from trading decisions. Key points: Read more：What is a stop-loss order and how to set it A take-profit order is an instruction that automatically closes a trade when a predetermined profit target is reached. Rather than manually monitoring a position all day, traders can set a take-profit level and allow the platform to close the trade automatically if the target is achieved. Key points: A stop out occurs when a broker automatically closes one or more positions because the account's margin level has fallen below a predefined threshold. This mechanism is designed to prevent account balances from falling into negative territory during adverse market conditions. Key points: Read more：What is a margin call? Definition, triggers, and how to avoid it Slippage is the difference between the expected execution price of a trade and the actual price at which it is filled. Slippage can occur in fast-moving markets when prices change before an order is executed. While traders often focus on negative slippage, positive slippage can also occur when a trade is filled at a better price than expected. Having traded through major news releases for many years, I've learned that slippage is usually at its worst during high-impact economic announcements, market opens, and the daily rollover period. It's important to remember that a stop-loss order can still be filled beyond its intended level during volatile conditions, which is why position sizing should always allow for unexpected price movements. Key points: Read more：What is slippage and how to avoid it in trading Forex fees are the costs associated with trading currency pairs. Understanding these costs can help traders manage expectations and avoid surprises when opening or holding positions. A spread is the difference between the bid price and the ask price of a currency pair. The spread is one of the most common trading costs in forex. When you open a trade, the position typically starts with a small unrealised loss equal to the spread, which must be recovered before the trade becomes profitable. From experience, spreads can widen significantly during major economic announcements such as Non-Farm Payrolls (NFP), inflation reports, and central bank interest rate decisions. For this reason, many beginner traders prefer to avoid opening positions immediately before major news releases. Key points: Read more：What Is the Spread in Forex? Learn to Calculate and Trade It The bid price is the price at which the market is willing to buy a currency pair, while the ask price is the price at which the market is willing to sell it. When you buy a currency pair, you enter at the ask price. When you sell, you enter at the bid price. The difference between the two prices forms the spread. For example, if EUR/USD is quoted at 1.1000/1.1002, the bid price is 1.1000 and the ask price is 1.1002. Key points: Read more：What Are Bid and Ask Prices? Understanding Forex Quotes A swap is an overnight financing adjustment that may be credited to or deducted from a trading account when a position remains open past the broker's rollover time. Swap rates are influenced by the interest rate differential between the two currencies in a pair. Depending on the direction of the trade and prevailing interest rates, traders may either receive or pay a swap charge. In short, holding a trade overnight can come with either a cost or a credit, depending on the currencies involved. Key points: Read more：What are swap fees and how are they calculated in forex trading? Forex analysis helps traders understand what the market is doing and what it might do next. While nobody can predict the future with complete accuracy, these concepts can help traders make more informed decisions. Read more：What are the 4 types of forex analysis? A complete beginner's guide Bullish means a trader expects prices to rise, while bearish means a trader expects prices to fall. If a trader believes EUR/USD is likely to increase in value, they are considered bullish and may look for buying opportunities. If they expect the pair to decline, they are bearish and may consider selling opportunities. Put simply, bullish traders look up, while bearish traders look down. Key points: Market sentiment is the overall mood or attitude of traders toward a particular market or asset. Sentiment often influences price movements just as much as economic data. Sometimes markets rise because traders feel optimistic, while at other times fear and uncertainty can drive prices lower. For example, during periods of economic confidence, traders may adopt a "risk-on" mindset and buy higher-risk assets. During times of uncertainty, they often move toward a "risk-off" approach and seek safer assets. Key points: Read more：What Is Market Sentiment? Definition, Indicators and Strategies Volatility is the degree of price fluctuation that occurs within a market over a specific period. A highly volatile currency pair experiences larger and faster price movements, while a less volatile pair tends to move more steadily. Volatility can create opportunities, but it can also increase risk. Many new traders initially love volatility because of the potential profits. They usually discover shortly afterwards that volatility can be equally enthusiastic about creating losses. The key is learning how to manage it rather than fear it. Key points: Read more：What is forex volatility? Definition, causes, strategies Liquidity refers to how easily a currency pair can be bought or sold without significantly affecting its price. The forex market is considered one of the most liquid financial markets in the world. Major currency pairs such as EUR/USD, GBP/USD, and USD/JPY generally have high liquidity because of the large number of buyers and sellers participating in the market. Higher liquidity matters because it often leads to tighter spreads and smoother trade execution. Key points: Read more：What is liquidity in Forex and how is it measured Forex charts are visual tools that help traders analyse price movements and identify potential trading opportunities. While entire books have been written on chart analysis, understanding a few key charting terms can make it much easier to follow market commentary and develop your own trading skills. For a deeper dive into chart analysis, candlestick patterns, and technical trading techniques, see our complete guide on How to Read Forex Charts. A candlestick chart is a type of price chart that displays the open, high, low, and close price for a currency pair during a specific period. Each candlestick tells a story about market activity within a chosen timeframe. The body of the candle shows the opening and closing prices, while the wicks indicate the highest and lowest prices reached during that period. Candlestick charts are among the most popular chart types used by forex traders because they provide a clear visual representation of price action and market sentiment. Key points: Read more：15 Best Chart Patterns Every Trader Should Know Support and resistance are price levels where market movements often slow down, stall, or reverse. Support is a price level below the current market where buying interest tends to emerge and prevent further declines. Resistance is a price level above the market where selling pressure often appears and limits further gains. Think of support as a floor beneath price and resistance as a ceiling above it. While neither level is guaranteed to hold forever, traders frequently monitor these areas when planning entries, exits, and risk management. Key points: A trendline is a line drawn on a chart that connects a series of swing highs or swing lows to help identify market direction. In an uptrend, traders often connect higher lows to create an upward-sloping trendline. In a downtrend, lower highs are connected to create a downward-sloping trendline. Trendlines can help traders visualise market structure and identify potential support and resistance areas. While they are simple tools, they remain surprisingly effective when used correctly. Key points: A chart pattern is a recurring price formation that traders analyse for clues about potential future market movements. Over time, certain price structures have appeared repeatedly across financial markets. Popular examples include flags, triangles, wedges, double tops, double bottoms, and head-and-shoulders patterns. While chart patterns do not guarantee future outcomes, many traders use them as part of a broader analysis process to identify possible trading opportunities. For a more detailed explanation, see our complete guide to Forex Trading Patterns. Key points: A forex position represents an active trade in the market. Understanding positions helps traders track whether they are buying, selling, profiting, or taking a loss. A position is an active trade that a trader currently holds in the market. Opening a position means entering a trade, while closing a position means exiting the trade and realising the profit or loss. Every forex trade starts with an opening transaction and ends with a closing transaction. Key points: A long position means buying a currency pair with the expectation that its value will rise. A short position means selling a currency pair with the expectation that its value will fall. For example, if you believe EUR/USD will move higher, you may open a long position. If you believe EUR/USD will weaken, you may choose to open a short position instead. Many beginners are surprised to learn that traders can potentially profit from falling markets as well as rising ones. This is one of the reasons forex trading attracts such a wide range of market participants. Key points: Read more：Long vs Short Position Compared: How to Trade Each Like a Pro A timeframe refers to the period of market activity represented by each candlestick or bar on a chart. For example, on a five-minute (M5) chart, each candlestick represents five minutes of trading activity. On a one-hour (H1) chart, each candle represents one hour, while a daily (D1) chart shows one full day of price movement. Different traders use different timeframes depending on their trading style. Scalpers may focus on minute charts, while swing traders and position traders often prefer higher timeframes. Key points: Read more：Best time to trade forex: When to enter the market during the day Forex risk refers to the potential for losses when trading currency markets. Successful traders focus just as much on protecting capital as they do on finding opportunities. Risk management is the process of controlling exposure to potential losses while trading. In forex trading, risk management typically involves position sizing, stop-loss placement, diversification, and maintaining realistic expectations. Many experienced traders would argue that risk management is more important than the trading strategy itself. After more than a decade in the markets, one lesson stands out above all others: traders rarely fail because they lack opportunities. They usually fail because they fail to control risk. This is why risk management sits at the heart of long-term trading success. Key points: Read more：10 Forex risk management tips every trader should know A drawdown is the decline in account equity from a previous peak, usually expressed as a percentage. Every trader experiences drawdowns at some stage. The goal is not to avoid them completely, but to keep them manageable so the account can recover when conditions improve. For example, if an account grows to £10,000 and then falls to £9,000, the account has experienced a 10% drawdown. Key points: A carry trade is a strategy that involves borrowing a lower-interest-rate currency to purchase a higher-interest-rate currency. The objective is to benefit from the difference in interest rates between the two currencies. While exchange rate movements still matter, traders may also earn positive swap payments when holding positions overnight. Carry trades can become particularly popular when global interest rate differences widen. However, they also carry risk because currency prices can move against the trader. Key points: Forex trading is the process of exchanging one currency for another with the aim of making a profit from price movements. To understand the basics, traders should learn key terms such as currency pairs, pips, spreads, leverage, margin, and stop-loss orders, as these concepts form the foundation of forex trading. Teaching yourself forex requires a structured approach that starts with learning the core terminology and understanding how the market operates. Many beginners start by studying pips, leverage, spreads, and risk management before practising on a demo account and developing a trading plan. The jargon of any trade refers to the specialist words and phrases commonly used within that profession or industry. In forex trading, terms such as pip, spread, margin, leverage, and liquidity form part of the market's everyday language. Beginners should focus on understanding currency pairs, pips, spreads, leverage, margin, stop-loss orders, and risk management. These terms are used frequently and play an important role in almost every trading decision. No. Most traders learn additional terminology as they gain experience. Understanding the core concepts first is usually enough to begin practising on a demo account and building confidence in the market. Forex terminology is the language of the currency market, and understanding these terms can help traders navigate the trading environment with greater confidence. From currency pairs and pips to leverage, margin, and risk management, these concepts form the foundation of everyday forex trading. This glossary has grouped the most important forex terms into practical categories, making it easier to find and understand the information that matters most. For traders who want to explore specific topics in greater detail, many of these terms also connect to dedicated in-depth guides. The more familiar you become with forex terminology, the easier it becomes to interpret market commentary, understand trading platforms, and develop your own trading approach. Like any new skill, building that knowledge takes time, but every experienced trader started with the basics. Lee W. is a seasoned professional trader with over 10 years of experience. Passionate about sharing valuable expertise and unique market insights, Lee W. now serves as an external and independent market analyst for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment. Deeper into each term: Related concepts: