Forex glossary

Ask (offer) – price of the offer, the price you buy currency for.

Bid – price of the demand, the price you sell currency for.

Broker – is a company that acts as the middleman between trader and larger commercial institution.

Commission – certain amount of money that broker takes for operation handling.

EA (expert advisor) or Robot – an automated script, that was written by professional trader and used by the trading platform to manage buy/sell orders automatically.

Flat (square) – neutral state, when all your positions are closed

Leverage – use of borrowed capital, allowing the Forex trader to gain access to larger sums of capital. This can heighten profits and losses and should be used wisely.

Floating leverage – a leverage that changes depending on the total size of open positions.

Gap – a difference between the previous period’s price and the next open price. It usually happens during weekends – between the Friday’s close and the Monday’s open price.

Lot – a definite amount of money for every operations handled (usually it is a multiple of 100)

Margin – money that is not involved in trading and you can use it to take more positions.

Margin call – is a situation when your margin deposits have fallen below the required minimum level.

Order (trade) – an order for a broker to buy or sell a currency at a certain rate.

Pip (point) – the last digit in a currency rate (e.g. EUR/USD = 0.0001)

Profit (gain) – positive amount of money that you earn for closing the position.

Scalping – a special type of trading, where a big number of positions are opened for short-term profits.

Stop-loss order (SL) – an order to close a deal when the market reaches a certain rate.

Slippage – execution of an order at a rate different from ordered.

Spread – a difference between ask and bit rates of a currency pair.

Swap – an overnight fee for holding a position in Forex.

Trend – a market’s direction established under an influence of different factors.

Volatility – a statistical measure of the number of price changes for a given currency pair in a given period of time.

VPS (Virtual Private Server) – a virtual space hosted on a dedicated server, used to run programs independent on the user’s PC.