Trading glossary
Short, plain definitions of the terms you will see on our product pages and in our guides.
- Expert Advisor (EA)
- A program that runs inside MetaTrader and places, manages and closes trades automatically according to coded rules.
- Indicator
- A tool that calculates or draws information on a chart. It does not open or close trades.
- Drawdown
- The fall in account balance or equity from a previous high or from the starting balance, usually shown as a percentage.
- Lot size
- The size of a trade. One standard lot in forex is 100,000 units of the base currency. For gold, one lot is typically 100 ounces, but check your broker.
- SMC (smart money concepts)
- A way of reading price action that focuses on market structure, liquidity, order blocks and fair value gaps.
- Spread
- The difference between the buy price and the sell price. It is a cost you pay on every trade.
- Slippage
- The difference between the price you expected and the price at which your order was filled.
- Stop loss
- An order that closes a trade at a set price to limit the loss.
- Hedging account
- An account type that allows buy and sell positions in the same symbol at the same time.
- Backtest
- Running a strategy on historical data to see how it would have behaved. It does not predict future results.
- VPS
- A virtual private server: a remote computer that stays online so your EA can run around the clock.