Trading Glossary

Essential trading terms and definitions to help you understand the forex market

Common Trading Terms

Ask Price

The price at which a trader can buy a currency pair

Bid Price

The price at which a trader can sell a currency pair

Spread

The difference between the bid and ask price

Pip

The smallest price movement in forex trading

Lot

Standard unit of measurement in forex (100,000 units of base currency)

Leverage

The ability to control a large position with a small amount of capital

Margin

The amount of money required to open and maintain a leveraged position

Stop Loss

An order to close a position automatically at a predetermined loss level

Take Profit

An order to close a position automatically at a predetermined profit level

Swap

The interest rate differential charged for holding a position overnight

Note: This is a basic glossary. For comprehensive trading education, visit our Trading Academy .