Glossary
Glossary
Short definitions with a worked example. The terms we use in our ledger, explained once.
- Drawdown
- The fall of an equity curve from its previous peak. Maximum drawdown is the largest such fall over a period, measured in our ledger in R.
- Pip
- The conventional smallest price step of an instrument. Its size differs: 0.0001 for EUR/USD, 0.1 USD for gold and 1 point for index CFDs in our ledger.
- R multiple
- The result of a trade divided by its initial risk (entry to stop-loss). A full stop-loss is −1 R; a win twice the risk is +2 R.