Trading Glossary: 41 Forex Terms Explained in Plain English

Forty-one articles on how trading actually works: where the cost of a trade comes from, how margin is calculated, why a broker closes positions for you, and what the terms in a contract specification really mean. Formulas and real numbers throughout.

Basics: money and size

• What the spread costs
• Lot size: standard, mini, micro
• Leverage: 1:30 vs 1:500
• Margin, margin level and stop-out
• Pips and points
• Swaps and the triple Wednesday charge
• Broker commission: where it hides
• Balance, equity and free margin
• Margin call and stop-out

Orders and trade management

• Order types: market, limit, stop
• Stop-loss placement
• Take-profit and risk/reward
• Trailing stops

How a broker works

• ECN, STP and market makers
• Account types: Standard, Raw, ECN, cent
• Liquidity providers: where price comes from
• Execution speed: what 30 ms means
• Slippage
• Requotes in MetaTrader
• Regulation: FCA, CySEC, ASIC and offshore
• Segregated client accounts
• Negative balance protection
• KYC and AML verification
• Bonus terms and turnover

Markets and instruments

• Currency pairs: majors, crosses, exotics
• Trading sessions and market hours
• Volatility and ATR
• What is a CFD
• Gold XAU/USD: specification and behaviour
• Index CFDs: US30, NAS100, DAX
• Trading the news and the economic calendar

Risk and discipline

• Risk management: the 1–2% rule
• Position sizing
• Drawdown measured properly
• Martingale and why it fails
• Overtrading

Platforms and automation

• MT4 vs MT5
• cTrader
• Expert advisors and trading robots
• Copy trading
• VPS for trading

Run the actual numbers with our calculators: lot size, pip value, margin, swap and total trading cost.