Forex Glossary of Trading Terms and Definitions

Forexstepbystep.com

Home Best MT4 Indicators MT4 Color Templates MT4 Trading Systems Best MT5 Indicators MT5 Color Templates MT5 Trading Systems Forex Glossary Contact Us Search

Welcome to our Forex Glossary, a complete trading dictionary designed to clarify essential forex terms and concepts for traders of all levels. From basics like "pip" and "leverage" to advanced ideas like "carry trade" and "market makers," it covers key players, trading strategies, risk management, and analysis methods. This resource helps you build confidence and make smarter trading decisions by mastering the language of the forex market. Happy trading!

Browse the glossary using this index

Special | A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | ALL

V

Volatility

Volatility refers to the degree of variation in trading prices over a specific period, indicating how much and how quickly the price of an asset, such as a currency pair in Forex, can change. Higher volatility means larger price swings and greater uncertainty, often resulting from economic news, geopolitical events, or changes in market sentiment. Traders often measure volatility using indicators like the Average True Range (ATR) or Bollinger Bands, as it can impact risk management, position sizing, and trading strategies.

VWAP

VWAP, or Volume Weighted Average Price, is a trading benchmark used to assess the average price of a security based on both its price and volume over a specific time period. It is calculated by taking the cumulative total of price times volume and then dividing it by the total volume for that period. In Forex trading, VWAP helps traders gauge the overall direction of a currency pair and is often used to identify potential support and resistance levels. Traders typically use VWAP to determine trade entry and exit points, as trading above the VWAP may indicate bullish sentiment, while trading below it may suggest bearish sentiment.