- Pip
A pip is the smallest standard price move in a forex quote, usually the fourth decimal place.
- Spread
The spread is the gap between bid and ask price. It is the main cost of trading a forex pair.
- Leverage
Leverage lets you control a larger position with a smaller deposit. It amplifies both profit and loss.
- Margin
Margin is the capital the broker locks to keep a leveraged position open. Falling below required margin triggers margin call or stop-out.
- Commission
Commission is a per-lot flat fee a broker charges in addition to (or instead of) the spread on Raw and ECN accounts.
- Lot
A lot is the unit of trade size in forex. One standard lot equals 100,000 units of the base currency.
Trading reference
Trading Glossary
Plain-English definitions of the trading terms that matter. Written by traders who trade live capital, not lifted from textbooks.