Backtesting
Testing strategy rules on historical data while accounting for costs. Past test results do not guarantee future performance.
Related book: FND-01MIYAR glossary
Clear definitions linked to your learning path.
Bid / Ask
Bid is the price you sell at; Ask is the price you buy at. The difference is the spread.
Related book: FND-01BOS - Break of Structure
A break of a structural high or low in the prevailing direction, under defined model rules. It suggests possible continuation rather than guaranteeing it.
Related book: SMC-01Breaker Block
An order-block zone that failed and broke, then is watched for a possible role reversal between support and resistance within the model’s context.
Related book: SMC-02CHoCH - Change of Character
A structural break against the prevailing direction under the model’s definition. It may indicate changing behaviour and requires context and confirmation.
Related book: SMC-01Currency pair
The price of one currency against another, such as EUR/USD. The first is the base currency and the second is the quote currency.
Related book: FND-01Demo account
An account with virtual funds for practising platform use and rules without risking real capital. Conditions and execution may differ from a live account.
Related book: FND-01Drawdown
A decline from a previous balance or equity peak to a subsequent trough. Equity drawdown can include unrealised losses.
Related book: FND-01FVG - Fair Value Gap
A lack of overlap between the first and third candle ranges in a three-candle pattern. Price may revisit the zone but need not fill it.
Related book: SMC-01Inducement
In some SMC models, local liquidity preceding the move targeted by the model. It is an interpretation of price behaviour, not proof of traders’ intentions.
Related book: SMC-02Leverage
Allows a larger position with a smaller margin deposit. It increases exposure and risk; it does not change profit or loss per pip for the same position size.
Related book: FND-01Liquidity
In SMC, often refers to potential order clusters around highs and lows. A price chart does not directly reveal every actual order.
Related book: SMC-01Lot
The unit of position size. A standard forex lot is usually 100,000 base-currency units; a mini is 0.1 and a micro is 0.01 lot. Other instruments have different specifications.
Related book: FND-01Margin
Money reserved by the broker to support an open position. It is not the maximum possible loss; requirements depend on the instrument and account.
Related book: FND-01Margin call / Stop out
A warning when margin level falls to the broker’s threshold. Positions may be closed automatically at the stop-out level. Check your account thresholds.
Related book: FND-01Market / Pending order
A market order requests execution at the available price. A pending order waits for specified price conditions; execution or price is not guaranteed.
Related book: FND-01Market Structure
Reading the sequence of highs and lows. Higher highs and lows describe an uptrend; lower highs and lows describe a downtrend on the chosen timeframe.
Related book: SMC-01MetaTrader 5 (MT5)
A platform for viewing prices and charts and managing orders and positions. Available instruments and features depend on the broker and account.
Related book: FND-01Mitigation
A term for price revisiting a prior zone in some SMC models. The chart alone does not prove that remaining institutional orders caused the move.
Related book: SMC-02Order Block
A zone often defined by the last opposing candle before an impulsive move, using specific rules. A return to it does not guarantee a reaction.
Related book: SMC-01Pip
A standard unit of price change: 0.0001 for most currency pairs and 0.01 for JPY pairs. Platforms may display smaller fractional points.
Related book: FND-01Position Sizing
Calculating lots from risk amount, stop distance and pip value. Review rounding, costs, slippage and contract specifications.
Related book: FND-01Premium & Discount
Dividing a selected range at its midpoint: above 50% is premium and below is discount. Location alone is not a buy or sell signal.
Related book: SMC-02Risk-Reward Ratio
Compares target profit with planned loss. Risking 1 to target 2 means seeking two dollars for each dollar at risk; it does not guarantee a profit.
Related book: FND-01Spread
The difference between buy and sell prices, and one trading cost. It can widen around news or when liquidity is thin.
Related book: FND-01Stop Loss
An order intended to close a position at a chosen loss level. Execution at that exact price is not guaranteed because of gaps or slippage.
Related book: FND-01Swap
A financing charge or credit that may apply when a position is held overnight. Rates, days and exempt-account conditions depend on the broker.
Related book: FND-01Take Profit
An order intended to close a position at a chosen profit target, subject to market conditions and platform execution rules.
Related book: FND-01Timeframe
The period represented by each candle, such as 15 minutes, one hour or one day. Changing the timeframe changes how price moves are aggregated.
Related book: FND-01Wyckoff Ranges
A model for interpreting possible accumulation and distribution phases in a trading range. It needs rules and context and does not guarantee breakout direction.
Related book: SMC-03