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Ask Price
The price at which a currency pair or asset is offered for sale. This is the price you buy at.
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Base Currency
The first currency is listed in a currency pair, indicating how much of the second currency is needed to purchase one unit of the base currency.
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Bear Market
A market condition characterized by falling prices or the expectation of falling prices.
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Bid Price
The price at which a currency pair or asset is offered for purchase. This is the price you sell at.
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Broker
An intermediary that facilitates trading between buyers and sellers in the financial markets.
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Bull Market
A market condition characterized by rising prices or the expectation of rising prices.
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CFD (Contract for Difference)
A financial instrument that allows traders to speculate on the price movement of assets without owning the underlying asset.
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Carry Trade
A trading strategy where a trader borrows funds at a low-interest rate to invest in an asset that offers a higher return.
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Cross Currency Pair
A currency pair that does not include the US Dollar, such as EUR/GBP.
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Currency Pair
Two currencies quoted against each other in the forex market, such as EUR/USD.
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Day Trading
A trading strategy where positions are opened and closed within the same trading day.
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Drawdown
The reduction of an account's equity, typically measured from peak to trough during a specified period.
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Equity
The value of an account, including the balance plus or minus any open positions' profit or loss.
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Expert Advisor (EA)
Automated trading software that executes trades on behalf of the trader based on pre-set criteria.
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Forex (Foreign Exchange)
The global marketplace for trading currencies, where participants buy, sell, and exchange currencies.
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Hedging
A risk management strategy used to offset potential losses by taking an opposite position in a related market.
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Leverage
A tool that allows traders to control a larger position with a smaller amount of capital, magnifying both potential profits and losses.
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Lot
A standardized quantity of a financial instrument, typically 100,000 units in forex trading.
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Margin
The collateral required to open and maintain a leveraged position.
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Margin Call
A demand from a broker to deposit additional funds or securities to cover potential losses.
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Market Order
An order to buy or sell a financial instrument immediately at the current market price.
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Pip
The smallest price movement in a currency pair, typically the fourth decimal place (0.0001) in forex quotes.
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Portfolio
A collection of financial investments held by a trader, including assets such as stocks, bonds, commodities, and currencies.
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Position
The amount of a currency or asset owned or borrowed by a trader, which can be long (buy) or short (sell).
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Resistance Level
A price level where a currency pair or asset faces selling pressure, preventing it from rising further.
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Risk Management
The process of identifying, assessing, and controlling the risks associated with trading to minimize potential losses.
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Scalping
A trading strategy that involves making multiple small trades to profit from minor price fluctuations.
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Slippage
The difference between the expected price of a trade and the actual price at which the trade is executed, often occurring in volatile markets.
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Spread
The difference between the bid and ask price of a currency pair or asset.
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Stop-Loss Order
An order placed to sell a security when it reaches a certain price, used to limit potential losses.
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Support Level
A price level where a currency pair or asset finds buying interest, preventing it from falling further.
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Swap
The interest paid or earned for holding a position overnight, based on the interest rate differential between the two currencies in the pair.
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Take-Profit Order
An order to close a trade when it reaches a specific profit level.
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Volatility
The degree of variation in the price of a financial instrument over time, indicating its risk level.
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Yield
The return on an investment, typically expressed as a percentage.
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