Trading Glossary

The price at which the market (or broker) is willing to sell a currency to you — the price you buy at.

The price at which the market (or broker) is willing to buy a currency from you — the price you sell at.

A derivative that lets you profit from price changes in an asset without owning it.

A quotation of two currencies, where one is exchanged for the other (e.g. EURUSD, GBPJPY).

A practice trading account with virtual funds, used to test strategies and learn the platform without risking real money.

The peak-to-trough percentage decline in account equity during a losing streak.

A trading model where client orders interact directly with anonymous liquidity providers' orders, with the broker charging a transparent per-lot commission.

The real-time net value of your trading account — cash balance plus unrealized profit or loss from open positions.

An automated trading program that runs inside MetaTrader, executing trades according to coded rules.

A cashback amount paid to the trader for each lot traded, funded out of the broker's spread or commission revenue.

The portion of account equity not locked up by open positions — available to open new trades or absorb additional losses.

Opening offsetting positions to reduce exposure to adverse price moves.

An individual or firm that refers clients to a forex broker in exchange for a share of the broker's revenue from those clients.

Borrowed capital that lets a trader control a position much larger than their own deposit, expressed as a ratio (e.g. 1:500).

How easily an asset can be bought or sold without significantly moving its price.

A standardized trade-size unit. One standard lot equals 100,000 units of the base currency.

The most-traded forex pairs, all involving the US dollar against another top-tier currency.

The capital a broker reserves from your equity to keep a leveraged position open.

A broker warning that your margin level has fallen below the required threshold and you must add funds or close positions.

The most widely used retail forex trading platform, supporting custom indicators and automated trading via MQL4.

The successor to MT4, supporting forex, stocks, futures, and crypto with more order types and a faster strategy tester.

The smallest standardized price change in a forex quote — usually the fourth decimal place (the second on yen pairs).

The monetary worth of one pip's movement on a given position, expressed in the account currency.

The relationship between the potential loss and the potential profit on a trade, e.g. 1:2 means risking 1 unit to make 2.

A short-term trading style targeting many small profits per session, with holding times from seconds to a few minutes.

The difference between the price you requested and the price actually filled — usually worse, occasionally better.

The difference between the bid (sell) and ask (buy) price of a currency pair, expressed in pips.

A pending order that automatically closes a losing position when price hits a pre-set level, capping the loss.

A broker model that routes client orders directly to liquidity providers without a dealing-desk markup.

The overnight interest charge or credit applied to a position held past the daily rollover time.

A pending order that automatically closes a winning position when price reaches a pre-set profit target.

A measure of how rapidly and widely price moves over a given period.