Trading glossary
Every term you don’t understand is a place a broker can hide a cost. So here is the whole vocabulary — defined in plain words, priced where it matters, with nothing behind a sign-up wall.
Each line is a relationship. Touch a term to light its neighborhood.
The core eight
Most of trading’s vocabulary is built from these. Decode them once and the rest of the dictionary becomes detail.
The gap between buy and sell — the cost of entering every trade. It’s the number worth verifying, so we publish ours.
Full definitionThe unit price moves are measured in. Once you know your pip value, a chart stops being abstract.
Full definitionBorrowed exposure. It multiplies the move — in both directions, by exactly the same factor.
Full definitionThe deposit that holds a leveraged position open. Not a fee — collateral, locked until you close.
Full definitionThe unit trades are sized in. Sizing is the one risk decision that is entirely in your hands.
Full definitionA contract on the price move, not the asset. It’s how one account spans five markets — long or short.
Full definitionThe cost — or credit — of holding overnight. The fee most traders meet by surprise. Read it before it reads you.
Full definitionThe order that decides your worst case in advance, while you’re still calm. Discipline, automated.
Full definitionThe full index
Search it, filter it, link to any entry. Definitions stay under two sentences — plain words first, fine print fluent.
66 terms shown
The price you buy at — the higher of the two prices in a quote. The seller’s asking price.
The settled cash in your account — closed trades only. Open positions move equity, not balance, until they close.
RelatedEquityRealized P/L
The first currency in a pair — the one you are buying or selling. In EUR/USD, the base is the euro.
RelatedQuote currencyForex
The price you sell at — the lower of the two prices in a quote. What buyers are currently bidding.
A contract for difference — an agreement to exchange the change in an asset’s price, without owning the asset. CFDs trade long or short, with leverage, across markets.
A fixed fee per trade, charged instead of — or alongside — the spread. Raw-spread accounts trade tighter pricing for explicit commission.
A CFD on raw materials — gold, oil, natural gas. Futures-based pricing means rollover dates matter.
The fee for converting profits, losses or charges that arise in a currency different from your account’s. Small per trade; visible over hundreds.
RelatedQuote currencyBalance
The degree to which two markets move together. Two positions in correlated markets are closer to one large position than to two small ones.
RelatedDiversificationHedging
A CFD on a cryptocurrency’s price. The volatility that attracts traders cuts in both directions — and leverage sharpens it.
RelatedCFDVolatility
See it liveOpening and closing positions within the same trading day, avoiding overnight swap charges. Demands time, discipline and a costs-first mindset.
RelatedScalpingSwing tradingSwap
A practice account funded with virtual money, trading live prices. Where vocabulary becomes reflex — at zero cost.
Spreading exposure across markets that don’t move together, so one event can’t sink the account. The closest thing risk management has to a free lunch.
RelatedCorrelationExposure
A cash adjustment applied to share and index CFD positions when the underlying pays a dividend — credited to longs, debited from shorts.
The decline from an account’s peak to its low, in percent. The number that measures how survivable a strategy actually is.
RelatedEquityRisk-reward ratio
Balance plus the unrealized profit or loss of open positions — your account’s true real-time value, and the base for margin calculations.
A major currency paired with an emerging-market one — USD/TRY, EUR/ZAR. Wider spreads, thinner books, sharper moves.
RelatedMinor pairsSpreadVolatility
The total market value your positions control — not the margin you posted. With leverage, exposure is always larger than your deposit.
The execution of an order — the moment it becomes a position at a concrete price. Execution quality is measured by where and how fast you are filled.
RelatedSlippageMarket order
The global market where currencies trade against each other, quoted in pairs. The largest and most liquid market in the world.
Equity minus the margin already locked by open positions — the funds available for new trades, or for absorbing losses.
RelatedMarginEquityMargin level
A jump in price with no trades in between, typically across a weekend or a news release. Gaps can move price straight past stop levels.
Buying an instrument expecting its price to rise. The classic trade: buy low, sell high — in that order.
RelatedGoing shortPosition
Selling an instrument you don’t own, expecting its price to fall. CFDs make shorting as simple as going long — and just as risky.
RelatedGoing longCFD
Opening a position that offsets the risk of another — for example, shorting an index against a basket of shares. It reduces risk, caps gains, and adds cost.
RelatedGoing shortCorrelation
A CFD tracking a stock index like the S&P 500 or DAX — one position spanning an entire market, quoted in points.
Know Your Customer — the identity verification every regulated broker must complete before you trade real money. Slow once; protective always.
RelatedLive account
Trading with borrowed exposure: at 1:30, a $1,000 deposit controls $30,000 of market. It multiplies profits and losses by exactly the same factor.
An order to trade at your specified price or better. It may never fill — but it never fills worse than you asked.
RelatedMarket orderStop order
How easily a market absorbs orders without moving. Liquid markets mean tighter spreads and less slippage; thin ones mean the opposite.
RelatedVolatilitySpreadSlippage
A funded account trading real money. Everything rehearsed on demo applies; only the emotions are new.
RelatedDemo accountKYC
See it liveThe standardized unit of trade size. A standard forex lot is 100,000 units of the base currency; mini (10,000) and micro (1,000) lots scale that down.
The most-traded currency pairs — all involving the US dollar, like EUR/USD and USD/JPY. Typically the tightest spreads and the deepest liquidity.
RelatedForexMinor pairsLiquidity
The collateral set aside from your balance to keep a leveraged position open. Not a cost — but it stays locked until the position closes.
The warning that your equity has fallen too close to your locked margin. It means: add funds or reduce positions — before the platform does it for you.
RelatedMargin levelStop-outEquity
Equity divided by used margin, as a percentage. The health gauge of a leveraged account — stop-outs trigger when it falls too low.
RelatedMargin callEquityFree margin
An order to trade immediately at the best available price. Fast — but the fill can differ from the price on screen, and that difference is slippage.
RelatedLimit orderSlippageFill
Pairs between major currencies that skip the US dollar — EUR/GBP, AUD/JPY. Liquid, but usually a touch wider than the majors.
RelatedMajor pairsExotic pairs
A guarantee that you cannot lose more than the funds in your account, even if the market gaps past your stop. A regulatory protection worth confirming your broker offers.
The interest cost of the borrowed capital behind a leveraged position, charged for every night it stays open. The reason leverage is priced by time.
Trading too often or too large — usually after a loss, usually emotional. The most common way accounts drain; the spread collects either way.
RelatedDrawdownPosition sizing
The standard unit of price movement in forex — for most pairs, the fourth decimal place (0.0001). Profits, losses and spreads are quoted in pips.
One tenth of a pip — the fifth decimal place on most forex quotes. Index and share CFDs are often quoted in points instead.
An open trade — your live exposure to a market. A position stays open until you close it, or a stop does.
RelatedGoing longExposureLot
Deciding how much to trade so that a losing trade costs a fixed, survivable fraction of your account. The risk decision that precedes every other.
The second currency in a pair — the one the price is expressed in. In EUR/USD, the price is dollars per euro.
RelatedBase currencyPip
Profit or loss locked in by closing a position. The number that actually changes your balance.
RelatedUnrealized P/LBalance
A new price offered when the one you clicked is no longer available. Frequent requotes are a sign of poor execution quality.
Potential loss versus potential gain on a trade, set by your stop and your target. At 1:2 you risk one to make two — you can be wrong more often than right and still come out ahead.
The extension of a position past the daily cut-off, when swap is applied. On futures-based CFDs, also the switch to the next contract.
A style built on many small, fast trades held for seconds or minutes. Spread costs dominate the economics of scalping.
RelatedDay tradingSpread
The difference between the price you requested and the price you received. Largest in fast or thin markets — and around news.
The difference between the bid and ask price, usually measured in pips. It is the built-in cost of entering a trade — paid the moment you open.
An order that closes your position automatically once the loss reaches a level you chose in advance. The single most important risk tool a trader has.
An order that becomes a market order once price reaches your trigger level. The mechanism behind stop losses and breakout entries.
RelatedStop lossLimit order
The forced closing of positions when margin level falls below the platform’s floor. The mechanism that ends trades you no longer have the equity to hold.
The daily charge — or credit — for holding a leveraged position overnight, derived from the interest-rate difference between the two sides of the trade.
Holding positions for days or weeks to capture a larger move. Swap costs accumulate for every night a position stays open.
RelatedDay tradingSwap
An order that closes your position automatically at your profit target. It locks the win without requiring you to watch the screen.
RelatedStop lossRisk-reward ratio
The smallest increment an instrument’s price can move, and a single update in the price feed. Tick size varies by market.
A stop loss that follows the price as it moves in your favor — locking in gains while leaving room for the trend to run.
RelatedStop lossVolatility
The real asset a derivative’s price is based on — the actual currency, share, index or barrel behind your CFD.
The paper profit or loss on positions still open. It becomes real — realized — only when the position closes.
RelatedEquityRealized P/L
How much and how fast prices move. Opportunity and risk in the same number — position sizes should shrink as it rises.
RelatedLiquidityGapTrailing stop
Your curated list of instruments, with live quotes in one view. The discipline tool that narrows a thousand markets to the few you actually follow.
RelatedForexVolatility
In practice
One scenario, start to finish — including the part where it goes against you. Watch the vocabulary do its actual job.
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The idea
You’ve watched EUR/USD for a week and expect the euro to strengthen. You decide to go long — buying the pair so you profit if it rises.
The guard
Before anything moves, you place a stop loss 40 pips below entry and a take profit 80 above — a 1:2 risk-reward ratio, decided while you’re still calm.
The turn
Overnight, US data surprises. EUR/USD drops 40 pips. Your unrealized P/L reads −$40 and your margin level sinks. This is the moment every trader meets — the only question is whether you scripted it.
Every step above can be rehearsed with zero real money on the line.
Rehearse it on a demoThe close
Your stop loss fills. The realized loss is $40 — 4% of the account, the exact amount you chose in advance. The vocabulary didn’t prevent the loss. It decided its size.
Fluency doesn’t make markets kind. It makes losses chosen instead of suffered.
Where each word lives
Definitions are claims. Numbers are proof — every term in this glossary is published somewhere on this site.
See the vocabulary priced in real numbers — every pair quoted with its spread, refreshed on a stated cadence.
Open the forex roomThe method page documents how overnight costs and gap pricing actually work — cadence stamps included.
Read the methodStop estimating. The calculators turn leverage, lot size and risk into exact numbers before you trade.
Run the numbersSpread or commission? Each account type publishes its pricing model side by side — compare, then choose.
Compare accountsStation 06 — the verdict
A demo account trades live prices with virtual money. Every term on this page, rehearsed until it’s reflex.
CFDs are leveraged products and carry a high risk of losing money rapidly. Learn the language first, rehearse second, fund last — most traders should take that order seriously.
