Pip
A standard unit used to describe price movement in many forex pairs. Pip conventions can differ for certain instruments.
Learning library
Forex & Trading Glossary
Plain-English definitions for the terms traders encounter most often. Use the glossary as a starting point, then open the related calculator or guide.
Spread
The difference between a market's bid and ask price. Spreads can vary with liquidity and market conditions.
Leverage
A mechanism that lets a trader control a larger market exposure with less upfront margin. It magnifies both gains and losses.
Margin
Funds set aside to support an open leveraged position. Margin requirements vary by product and provider.
Lot
A standardized way of describing trade size in forex. Contract size varies by instrument and broker.
Drawdown
The decline from a prior account or portfolio peak to a subsequent low. Drawdown is a core risk metric.
Slippage
The difference between an expected execution price and the price actually received.
Stop Loss
An order instruction intended to limit loss if price moves to a specified level. Execution can differ during gaps or fast markets.
Risk / Reward
A comparison between the amount potentially risked and the amount targeted. It does not guarantee an outcome.
Liquidity
How easily an asset can be traded without materially moving its price. Liquidity can change by time and market conditions.
Volatility
A measure of how much and how quickly prices fluctuate over a period.
Margin Call
A broker's warning or action when account equity no longer supports required margin. Exact procedures vary by provider.