A comprehensive reference guide to common trading terms and concepts.
The spread is the difference between the bid and ask price of a financial instrument. It represents the broker's fee for executing your trade.
Leverage allows you to control a larger position with a smaller amount of capital. For example, 100:1 leverage means $1,000 controls $100,000 worth of assets.
A pip (percentage in point) is the smallest price movement in a currency pair. For most pairs, 1 pip = 0.0001. For JPY pairs, 1 pip = 0.01.
Margin is the collateral required to open and maintain a leveraged position. It is typically expressed as a percentage of the total trade value.
A CFD is a financial derivative that allows you to speculate on price movements of an asset without owning the underlying asset itself.
A stop loss order automatically closes a position when it reaches a specified loss level, helping to limit your downside risk.
A take profit order automatically closes a position once it reaches a target profit level, locking in your gains.