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Trading glossary

62 definitions, from ask and bid through spread, margin, leverage and lot size, to stop loss, take profit and CFDs. Search, filter by letter, or browse the full list.

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62 terms in the glossary

A

Allocation capRulebook: The maximum firm capital you may hold across all of your accounts at once, set at $400,000 in combined starting allocation. Scaling milestones are the only route above it, and they are granted per account by the risk desk.
AMLCompliance: Anti-money laundering: the controls that stop the payout rail being used to move criminal proceeds. In practice it means identity verification before funding, sanctions screening on every account, and source-of-funds questions on unusually large deposits.
AskExecution: The price at which you can buy an instrument right now. It sits above the bid, and the difference between the two is the spread you pay to open a long position.
ATRRisk: Average True Range, a measure of how far an instrument typically moves over a chosen period. Sizing a stop as a multiple of ATR adapts your risk to current volatility instead of to a round number on the chart.

B

BalanceRulebook: The cash figure on your account excluding any open positions. Balance only changes when a trade is closed, a payout is released or a swap is charged, which is why the overall drawdown limit is measured against starting balance rather than against equity.
BidExecution: The price at which you can sell an instrument right now. Quoted platforms draw their charts from the bid, which is why a long position appears to open slightly below the candle you clicked.
BreachRulebook: A violation of a hard risk limit, most often the 5% maximum daily drawdown or the 10% maximum overall drawdown. Breaches are detected server-side and close the account at the moment they occur; they are never adjudicated by hand afterwards.

C

CFDInstruments: A contract for difference: you trade the price movement of an instrument without owning the underlying. Profit and loss are settled in cash against the contract size, which is why one standard lot of gold is 100 ounces of exposure rather than 100 ounces in a vault.
ChargebackCompliance: A payment reversal initiated through your card issuer rather than through us. Raising one on a delivered evaluation closes every associated account pending investigation, so a refund request through support is always the faster route.
Contract sizeInstruments: The quantity of the underlying that one lot represents. One standard forex lot is 100,000 units of the base currency; one gold lot is 100 troy ounces. Contract size is what turns a price move into a profit or loss figure.
Copy tradingRulebook: Mirroring orders from one account to another. Copying between your own Connect Funded accounts is permitted provided the combined exposure stays inside the $400,000 allocation cap. Copying another trader’s signal into a funded account is not.
CorrelationRisk: The degree to which two instruments move together. Three long positions in EUR/USD, GBP/USD and AUD/USD are close to a single short-dollar position, and should be risk-budgeted as one idea rather than three.

D

Daily drawdownRulebook: The maximum your equity may fall within a single trading day, capped at 5% on every tier. It is measured against the higher of your starting balance or your equity at the 00:00 UTC reset, and it includes floating profit and loss on open positions.
Daily resetRulebook: The 00:00 UTC moment at which the daily drawdown floor is recalculated for the day ahead. Positions held across the reset carry their floating profit and loss into the new day’s calculation.
Depth of marketExecution: A view of resting buy and sell orders at each price level away from the current quote, also called Level II. cTrader exposes it natively; it tells you where size is waiting rather than where price has already been.

E

EquityRulebook: Your balance plus the floating profit and loss on every open position. Equity is the figure the daily drawdown check runs against, which is why an unrealised loss can end an evaluation before you have closed anything.
Evaluation phaseRulebook: One of the two stages that precede funding. Phase 1 asks for an 8% to 10% profit target depending on tier; Phase 2 halves it to 4% or 5%. Both run under the same 5% daily and 10% overall drawdown limits, with a four trading day minimum and no calendar deadline.
ExpectancyRisk: The average result of a trade in your system, expressed in R. A 40% win rate at 3R with 1R losses has an expectancy of +0.6R, which is a better business than a 70% win rate at 0.5R.
Expert advisorExecution: An automated strategy running inside MetaTrader, written in MQL5. Expert advisors, custom indicators and algorithmic execution are permitted on every Connect Funded tier, provided they trade the market rather than the pricing feed.

F

Floating P&LRulebook: The unrealised profit or loss on positions you still hold. It moves your equity tick by tick and therefore counts fully toward both drawdown limits, whether or not you intend to close the position today.
Funded accountRulebook: The live account issued once both evaluation phases and KYC are complete. It carries the firm’s capital, your tier’s profit split, and the same drawdown limits you traded during the evaluation.

G

GapRisk: A jump between the close of one session and the open of the next with no tradable price in between. Stops do not protect you inside a gap, which is the main reason weekend exposure has to be sized more conservatively than intraday exposure.

H

HedgingRulebook: Holding opposing positions in the same or a closely related instrument. Hedging inside a single Connect Funded account is permitted. Hedging the same exposure between two accounts, or between traders, is a prohibited practice.

K

KYCCompliance: Know Your Customer: the identity check completed before a funded account is issued. It requires a government photo identity document and a proof of address dated within the last three months, uploaded once inside the client portal.

L

Latency arbitrageRulebook: Exploiting the delay between a price appearing on a faster venue and appearing in our feed. It extracts money from the pricing mechanism rather than from the market, and it is prohibited on every account regardless of profitability.
LeverageInstruments: The ratio between your notional exposure and the margin it consumes. Connect Funded offers up to 1:100 on forex, 1:50 on metals and indices, 1:20 on commodities, 1:10 on share CFDs and 1:5 on crypto. Leverage changes margin, never risk.
Limit orderExecution: An instruction to trade only at a specified price or better. A limit order will never fill worse than the price you named, but it may not fill at all if the market trades through the level without leaving size behind.
LiquidityExecution: How much size can trade without moving the price. Deep liquidity means tight spreads and predictable fills; thin liquidity is where slippage, spread widening and false breaks come from.
LotInstruments: The standard unit of trade size. One standard lot is 100,000 units of the base currency in forex; a mini lot is 0.1 and a micro lot 0.01 of that. Every instrument has its own contract size behind the same lot label.

M

MarginInstruments: The portion of account equity held aside to support an open position, determined by notional exposure divided by leverage. Margin is a collateral requirement, not a cost, and it is released when the position closes.
Margin callRisk: The warning state entered when equity falls to a set percentage of used margin. On a funded account it is almost always academic: the 5% daily drawdown limit will close the account well before margin becomes the binding constraint.
Market orderExecution: An instruction to trade immediately at the best available price. It guarantees a fill but not a price, so in fast conditions the difference between the quote you saw and the fill you receive shows up as slippage.
MidExecution: The midpoint between bid and ask. Analytics, correlation studies and most published charts use mid because it strips out the spread, which is why a backtest run on mid overstates a live result.
Minimum trading daysRulebook: The four separate days on which at least one position must be opened before a phase can be completed. It is a floor, not a target: there is no calendar deadline on either phase, so there is never a reason to force a trade to satisfy it.

N

Notional exposureInstruments: The full market value controlled by a position: lots multiplied by contract size multiplied by price. Two lots of EUR/USD at 1.0850 is $217,000 of notional exposure regardless of the margin it consumes.

O

Order bookExecution: The aggregated list of resting bids and offers at each price. It is the raw material behind depth of market, and the reason liquidity can disappear a second before a high-impact release prints.
Overall drawdownRulebook: The maximum your equity may fall from the initial account balance across the life of the account, capped at 10% on every tier. It is static rather than trailing, so profits you make raise your buffer and never raise the floor.

P

Payout cycleRulebook: The rhythm on which withdrawal requests are opened. Standard accounts run bi-weekly; the $200,000 Professional tier runs weekly. Approved requests are released within 24 to 48 hours, and Connect Funded absorbs the processing fee.
Pending orderExecution: Any instruction that waits for price to reach a named level before it becomes live: a limit, a stop, or a stop-limit. It is the opposite of a market order, which trades immediately at the best available price.
PipInstruments: The conventional smallest quoted increment on a currency pair: 0.0001 on most majors and 0.01 on yen crosses. On a standard lot of a USD-quoted pair one pip is worth $10.
PointInstruments: The smallest increment the platform can quote, one decimal place finer than a pip on a five-digit feed. Ten points make one pip on EUR/USD. Indices and metals are usually described in points rather than pips.
Profit splitRulebook: The share of net profit paid to you. It is 80% on the $10,000 and $25,000 tiers, 85% on $50,000 and $100,000, and 90% on the $200,000 Professional account. A split raised by scaling never decreases afterwards.
Profit targetRulebook: The gain required to complete an evaluation phase, expressed as a percentage of starting balance. Phase 1 runs from 10% on the smaller tiers down to 8% on Professional; Phase 2 is half of it. Funded accounts have no profit target at all.
Proof of addressCompliance: A utility bill, bank statement or government letter dated within the last three months showing your name and residential address. It is one of the two documents required at KYC, alongside a photo identity document.

R

R-multipleRisk: A trade result expressed in units of the risk taken. Risking $500 and making $1,500 is +3R. Reporting in R rather than in dollars makes results comparable across account sizes and across scaling steps.
ResetRulebook: Restarting an evaluation on a fresh account after a breach or a withdrawal. Traders who breach within the first 14 days of purchase are offered a discounted reset; there is no limit on how many times you may start again.
RolloverInstruments: The daily point at which open positions are carried into the next value date and financing is applied. It falls at 21:00 UTC on most instruments and is usually the thinnest, widest-spread minute of the trading day.

S

Sanctions screeningCompliance: Checking an applicant and their payment instruments against international sanctions and politically exposed person lists. It runs at registration and again periodically; a positive match blocks funding until it is resolved.
ScalingRulebook: The published plan for growing a funded account. Return 10% cumulatively across two consecutive payout cycles and the allocation doubles, up to a $2,000,000 ceiling, with the profit split stepping up alongside it.
Session overlapExecution: The window in which two major centres trade simultaneously. The London and New York overlap, roughly 12:00 to 16:00 UTC, carries the deepest book and the tightest spreads of the day on forex, metals and US indices.
SlippageExecution: The difference between the price you expected and the price you received. It is a normal consequence of trading a moving market with a market order, and it is worth measuring per instrument and per session rather than treating as noise.
Source of fundsCompliance: Evidence of where the money used to purchase an evaluation came from. It is requested only where a deposit pattern or a sanctions flag makes it necessary, and it is held under the retention periods set out in the AML policy.
SpreadExecution: The gap between bid and ask, and the immediate cost of opening a position. Connect Funded quotes raw spreads from 0.0 pips on EUR/USD; spreads widen at rollover, into high-impact releases and in thin holiday sessions.
Stop lossExecution: A protective stop order that closes a position if price reaches a named level against you. It becomes a market order when triggered, so a gap can fill it worse than the level you set.
Stop orderExecution: An instruction that becomes a market order once a trigger price trades. It guarantees that you act, not that you get a price, so a protective stop in a gapping market can fill materially worse than the level you set.
Stop-outRisk: The automatic liquidation of open positions when equity falls below the platform’s minimum margin threshold. On a Connect Funded account the drawdown rules bind first, so a stop-out is a symptom of sizing that was already far too large.
SwapInstruments: The financing credited or debited for holding a position overnight, derived from the interest rate differential between the two sides of the instrument. It is applied at rollover and charged at triple rate on Wednesdays to cover the weekend.

T

Take profitExecution: A limit order that closes a position when price reaches a named level in your favour. It fills at that price or better, and it may not fill at all if the market trades through the level without leaving size behind.
TickExecution: One update of the price feed. Tick volume counts updates rather than contracts, so a MetaTrader volume histogram measures how busy the feed was, not how much size actually traded.
Tick scalpingRulebook: Taking repeated positions of a few ticks against quotes that are momentarily stale. Like latency arbitrage it targets the feed rather than the market, and it is prohibited on evaluation and funded accounts alike.
Trailing stopExecution: A stop that follows price by a fixed distance as a position moves in your favour. It locks in progress, and it also converts many winning trades into small ones, so it belongs on trend positions rather than on mean-reversion ones.

V

VolatilityRisk: The size of typical price movement over a period. It is the variable that should change your position size, because a fixed lot size on a quiet day and a violent one represents two completely different risks.

Moving money is a separate glossary.

Limits, timing, verification and rejected requests live on the funding and payout FAQ, not in these definitions.

Funding and payout FAQ Payment rails