Glossary
- Spread
The difference between the buy (ask) and sell (bid) price of an instrument. It is an implicit cost of every trade.
- Pip
The standard smallest unit of price movement in a currency pair. For most pairs it equals 0.0001.
- Lot
The size unit of a trade. One standard lot equals 100,000 units of the base currency.
- Leverage
A ratio that lets you control a position larger than your own capital. It amplifies both gains and losses.
- Margin
The capital the broker holds as collateral to keep a leveraged position open.
- Swap
The interest charged or paid for holding a position open overnight.
- Drawdown
The drop from a capital peak to a subsequent trough. It measures the maximum loss endured.
- Market order
An order executed immediately at the best price available at that moment.