Ask Price

The price at which you can buy a currency pair. Also called the offer price.

Base Currency

The first currency in a currency pair. In EUR/USD, the Euro is the base currency.

Bid Price

The price at which you can sell a currency pair.

CFD

Contract for Difference. A derivative that allows trading on price movements without owning the underlying asset.

Commission

A fee charged by the broker for executing trades, typically per lot traded.

Currency Pair

Two currencies quoted together showing the exchange rate between them (e.g., EUR/USD).

Equity

Your account balance plus or minus any floating profit or loss from open positions.

Expert Advisor (EA)

An automated trading program that runs on MetaTrader platforms to execute trades based on programmed rules.

Free Margin

The amount of money available in your account to open new positions (Equity minus Used Margin).

Fundamental Analysis

Analyzing economic data, news events, and financial reports to predict market movements.

Hedging

Opening opposite positions to reduce risk exposure on an existing trade.

Leverage

A tool allowing traders to control larger positions with less capital. Expressed as a ratio (e.g., 1:100).

Limit Order

An order to buy or sell at a specified price or better.

Liquidity

The ease with which an asset can be bought or sold without significantly affecting its price.

Long Position

Buying an asset with the expectation that its price will rise.

Lot

A standardized unit of trading. Standard lot = 100,000 units; Mini lot = 10,000; Micro lot = 1,000.

Margin

The deposit required to open and maintain a leveraged position.

Margin Call

A warning that your account equity has fallen below the required margin level.

Market Order

An order to buy or sell immediately at the best available current price.

Pip

Percentage in Point. The smallest price movement in forex, typically 0.0001 for most pairs.

Quote Currency

The second currency in a pair. In EUR/USD, the US Dollar is the quote currency.

Resistance

A price level where selling pressure may prevent further upward movement.

Short Position

Selling an asset with the expectation that its price will fall.

Slippage

The difference between the expected price and the actual execution price of a trade.

Spread

The difference between the bid and ask price. This represents the cost of the trade.

Stop-Loss

An order that automatically closes a position at a specified price to limit losses.

Stop-Out

The automatic closing of positions when margin level falls below a critical threshold.

Support

A price level where buying pressure may prevent further downward movement.

Swap

The overnight interest fee charged or credited for holding positions past market close.

Take-Profit

An order that automatically closes a position at a specified profit level.

Technical Analysis

Analyzing price charts and using indicators to predict future price movements.

Trailing Stop

A stop-loss that moves with the market price, locking in profits as the trade moves favorably.

Volatility

The degree of price variation over time. High volatility means larger price swings.