Trading Education
Articles, webinars with analysts and reference materials — from your first trade to advanced money management.
A
- Ask
- The price at which the broker sells you the base currency (the buy price for the trader). Always higher than the Bid.
B
- Bid
- The price at which the broker buys the base currency from you (the sell price for the trader).
C
- CFD
- Contract for Difference. Lets you profit from an asset’s price movement without owning the asset itself.
E
- ECN
- Electronic Communication Network — an execution model where client orders are routed directly to a network of liquidity providers with minimal spreads plus a commission.
G
- Gap
- A break on the chart between the closing price and the next opening price. Often occurs after weekends or major news.
L
- Leverage
- The ratio of position size to the trader’s own funds. 1:100 leverage lets you control a position 100 times larger than your collateral.
- Lot
- The standard unit of trade volume. In Forex, 1 lot = 100,000 units of the base currency; most brokers allow trading from 0.01 lots.
M
- Margin
- Collateral locked on the account when a leveraged position is opened. Released after the trade is closed.
- Margin Call
- A broker warning that account funds are barely sufficient to maintain open positions.
P
- Pip
- The minimum price increment of a currency pair. For most pairs — a change in the fourth decimal place (0.0001).
S
- Spread
- The difference between the Ask and Bid prices — the trader’s main transaction cost.
- Stop Loss
- An order that automatically closes a position when a specified loss is reached. The main risk-management tool.
- Stop Out
- Forced closing of positions by the broker when the margin level falls below a critical value.
- Support level
- A price zone where demand previously stopped a decline. The mirror concept is a resistance level.
- Swap
- A charge or credit for holding a position overnight, based on the interest-rate differential of the pair’s currencies.
T
- Take Profit
- An order that automatically locks in profit when a target price is reached.
- Trend
- A sustained directional price move: up (rising highs and lows) or down.
V
- Volatility
- A measure of price variability over a period. High volatility — big moves and big risks; low — narrow ranges.