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Education / Trading Glossary
Trading glossary

Every trading term, explained

Look up any forex or CFD term in plain English. Type to search 44 definitions, A to Z.

44 terms

AAsk

The price at which you can buy a currency pair; the higher side of the quote.

BBase currency

The first currency in a pair — the one you're buying or selling.

BBear market

A market in a sustained downtrend, where prices are generally falling.

BBid

The price at which you can sell a currency pair; the lower side of the quote.

BBull market

A market in a sustained uptrend, where prices are generally rising.

CCFD

Contract for Difference — a product that lets you trade price movements without owning the asset.

CCommission

A fee charged per trade, common on raw-spread accounts like ECN.

DDrawdown

The peak-to-trough drop in your account balance over a period.

EECN

Electronic Communication Network — matches orders for raw, institutional pricing.

EEquity

Your account balance plus or minus the profit/loss of any open trades.

EExotic pair

A currency pair involving an emerging-market currency, e.g. USD/TRY.

FFundamental analysis

Studying economic data, policy and news to judge where a market is headed.

HHedging

Opening a position to offset the risk of another — reducing net exposure.

KKYC

Know Your Customer — the identity verification required to open an account.

LLeverage

Using a small deposit (margin) to control a larger position; magnifies gains and losses.

LLiquidity

How easily an asset can be bought or sold without moving its price.

LLong

A buy position, opened when you expect the price to rise.

LLot

A standard unit of trade size; one standard lot is 100,000 units.

MMajor pair

A highly liquid currency pair that includes the US dollar, e.g. EUR/USD.

MMargin

The deposit required to open and maintain a leveraged position.

MMargin call

A warning that your equity is approaching the margin needed to hold positions.

MMinor pair

A cross-currency pair that does not include the US dollar, e.g. EUR/GBP.

NNegative balance protection

A safeguard ensuring you can't lose more than your deposit.

OOrder

An instruction to buy or sell — market, limit, stop or trailing.

PPip

The smallest standard price move on a pair, usually the 4th decimal place.

PPipette

A tenth of a pip — the 5th decimal place shown on some quotes.

PPosition

An open trade you currently hold in the market.

QQuote currency

The second currency in a pair — the one you pay with.

RResistance

A price level where selling tends to halt a rise.

RRisk-to-reward

The ratio of what you risk on a trade to what you aim to gain.

RRollover / Swap

Interest paid or earned for holding a position overnight.

SSentiment

The overall mood or positioning of traders toward a market.

SShort

A sell position, opened when you expect the price to fall.

SSlippage

The difference between the expected and executed price of a trade.

SSpread

The gap between the bid and ask price — your cost to enter a trade.

SStop loss

An order that automatically closes a trade at a set level to cap losses.

SStop-out

The level at which positions are auto-closed to protect your account.

SSTP

Straight-Through Processing — orders routed directly to liquidity providers.

SSupport

A price level where buying tends to halt a fall.

SSwap-free

An account type without overnight interest, often for religious reasons.

TTake profit

An order that closes a trade once your target profit is reached.

TTechnical analysis

Studying charts and price action to forecast future moves.

VVolatility

How much and how quickly a market's price moves over time.

VVolume

The number of units or lots traded over a given period.

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