Trading Glossary

A-Book / B-Book

Asset
A financial instrument that can be bought or sold in the market. This includes currencies, stocks, indices, commodities, cryptocurrencies, and other derivative products. Each asset has its own risk profile, trading hours, and fundamental or technical factors that influence its price.
​

Autotrading
The use of software, such as Expert Advisors (EAs), to execute trades automatically. The system can analyze the market, place, and manage orders without human input. At FXRK, this is allowed only if it does not involve prohibited strategies, such as arbitrage or tick scalping.

Balance
The amount available in the account after closing all trades. It does not include gains or losses from open positions. It reflects the result of closed trades only.
​

Break Even
The level at which income and expenses of a trade are equal, resulting in no profit or loss. It is also used to define a stop loss adjusted to the entry point, protecting capital in case of a price reversal.
​

Broker
A financial intermediary that connects traders to the markets. It provides access to trading platforms, quotes, order execution, and additional services. A regulated broker ensures better security for traders' funds.

Closed Positions
Trades that have been completed. Their result is reflected in the balance. These form the basis for tracking performance and profitability.
​

Commissions
Fees charged by the broker when executing trades. These can be per lot, per order opening/closing, or due to inactivity. It's important to factor them in when calculating real profitability.
​

Compounding
Reinvesting the profits earned to increase the available capital in the account, allowing you to open larger trades or assume more calculated risk in future trades.
​

Consistency
The ability to trade in a controlled manner and deliver positive results over time. It's one of the most valued criteria in funded accounts like FXRK, where a stable, professional risk profile is preferred.
​

Copytrading
A method of automatically replicating another trader’s trades. At FXRK, this is prohibited if used to replicate across multiple accounts, manipulate metrics, or distribute the same trading pattern across accounts, as it compromises performance authenticity.

Daily Balance
The balance at the end of the day, with all positions closed. It is used in funding programs to assess daily profitability and operational consistency.
​

Demo Account
A risk-free simulation environment where trades are placed with virtual money. It's used for training, strategy testing, platform familiarity, or practicing risk management. While useful, it does not replicate the emotional pressure of trading with real money.

Equity
The real-time value of a trading account. It is calculated by adding the balance to open trade profits or subtracting open trade losses. It’s a key risk management indicator and is used to monitor limits such as drawdown.
​

Expert Advisor (EA)
An automated program on MetaTrader that executes trades according to rules defined by the trader. It can include technical analysis, order management, and trailing stops. At FXRK, EAs are allowed only if they do not use prohibited strategies such as arbitrage, martingale, or extreme scalping.

Floating Losses
Unrealized losses on open trades. They don’t affect balance until the trade is closed, but they do impact equity. Must be controlled to avoid breaching drawdown limits.

Gap
A space in the chart between a closing price and the next opening price, usually caused by major news or low liquidity. Gaps can lead to unexpected executions or slippage. Commonly occur between Friday’s close and Sunday’s open.

Hedging and Hedge Trading
A strategy used to reduce risk by opening opposite positions on the same (or correlated) asset. At FXRK, this is prohibited because it can be used to manipulate risk metrics and violate the logic of the evaluation program.
​

HFT (High-Frequency Trading)
A trading strategy based on massive order execution in fractions of a second using algorithms and ultra-fast connections. At FXRK, this is prohibited if it relies on latency, arbitrage, or server manipulation.
​

Hyperactive Trading
Excessive trading without technical reasoning. Evaluated based on the number of trades per minute or session. At FXRK, it may be considered a violation if established limits are exceeded.

Latency Trading
A method that exploits delays between data sources and order execution. It can provide unfair advantages using special tools or fast connections. At FXRK, this is strictly prohibited as it manipulates the system.
​

Leverage
Allows you to open larger trades with a smaller amount of capital. For example, with 1:100 leverage, you can trade $10,000 with just $100. It increases both the profit potential and the risk of loss, so it should be used responsibly.
​

Liquidity
How easily an asset can be bought or sold without causing sharp price changes. The more liquid an asset (e.g., EUR/USD), the lower the spread and the better the execution.
​

Live Market
A trading environment with real conditions and live execution, where real money is at risk. Opposite of a demo account, and where real emotions and consequences apply.

Market Rollover
The daily session reset, typically at 00:00 GMT. Spreads, swaps, or execution conditions may adjust at this time. It’s a moment of low liquidity and high volatility.
​

Martingale and Grid Strategies
Increasing position size after losses. Unsustainable and disproportionately risky. Prohibited.

Open Positions
Active market orders that haven’t been closed. Their result isn’t finalized and directly affects account equity.

Pip
Standard unit of measurement for price movement in forex. For most pairs, one pip equals 0.0001. It's essential for calculating profits, losses, and SL/TP levels.
​

Price Movements
Fluctuations in an asset's price caused by supply, demand, economic events, news, or technical data. Technical and fundamental analysis aim to anticipate these movements.
​

Profit Split
The percentage of profits a trader keeps in a funded account. At FXRK, the split depends on the account type and is calculated based on the trader’s net profit after fees or withdrawals.

Regulation
Oversight of brokers by official financial entities (e.g., FCA, ASIC, CNMV). It ensures ethical practices, fund security, account segregation, and execution transparency.
​

Reverse Arbitrage Trading
A strategy that exploits price discrepancies between brokers or data feeds. At FXRK, this is prohibited as it’s considered an illegitimate use of market technical mismatches.

Slippage
The difference between the intended execution price and the actual execution price. Common in volatile markets or low liquidity. It can be positive or negative but should always be monitored.
​

Spreads
The difference between an asset’s ask (buy) and bid (sell) price. It’s the main transaction cost. Low spreads benefit scalping or high-frequency strategies.
​

Stop Loss
A pre-set order to automatically close a trade if the price moves against you to a certain level. It protects traders from excessive losses and helps enforce disciplined risk management.
​

Swaps
Costs or earnings incurred by holding a trade overnight. They depend on the interest rates of the instruments involved. Some prohibited strategies, like reverse arbitrage, attempt to exploit these swaps.

Take Profit
An automatic order that closes a trade once a set profit level is reached. It secures gains without needing to constantly monitor the market.
​

Tick Scalping
A technique involving opening and closing numerous trades within milliseconds or seconds to capture tiny price movements. At FXRK, this is prohibited due to excessive server load and unsustainable behavior.

Volatility
A measure of price fluctuation in an asset over time. High volatility brings more profit potential but also more risk. News and macroeconomic events often cause sharp increases in volatility.
​

VPN (Virtual Private Network)
A tool that encrypts and masks the user’s location when connecting to the Internet. Useful for trading from public networks or restricted countries. At FXRK, it is allowed as long as it’s not used to hide identities or share accounts.
​

VPS (Virtual Private Server)
A remote server that allows 24/7 platform operation, ideal for autotrading or stable connections. At FXRK, its use is allowed as long as it’s not used for prohibited strategies.

At FXRK, we aim to protect the integrity of the evaluation and funding environment. The following practices are prohibited: