Base currency
The first currency in a pair; the quote states its value in the second currency.
Read lessonTrading glossary
Short explanations with related lessons. Terminology and contract conventions can differ by instrument and provider.
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Quote currency
The second currency in a pair, used to express the base currency price.
Read lessonPip
A conventional FX price unit. Confirm the convention for the actual symbol.
Read lessonTick
The minimum permitted price increment of a particular instrument.
Read lessonLot
A contract quantity whose number of units is defined by the product and provider.
Read lessonSpread
The difference between bid and ask; it can change with market conditions.
Read lessonCommission
An explicit trading fee. Check whether the quoted amount covers one side or both.
Read lessonSlippage
The difference between a stated reference price and the actual execution price.
Read lessonMargin
Collateral supporting an exposure under the contract; it is not the maximum loss.
Read lessonEffective leverage
Relevant position exposure divided by account equity, using consistent currency values.
Read lessonEquity
Account value including open profit or loss as defined by the platform.
Read lessonStop order
An order triggered at a specified level; actual execution depends on order type and venue.
Read lessonLimit order
An order at a specified price or better, without a guarantee that it will execute.
Read lessonR multiple
A realised result divided by stated initial monetary risk; retain the original denominator.
Read lessonDrawdown
A decline from a previous peak in a specified equity or balance series.
Read lessonBacktest
A rule-based historical simulation whose results depend on data and execution assumptions.
Read lessonLook-ahead bias
Using information that would not yet have existed at the simulated decision time.
Read lessonTrading journal
A record of decisions, rules, executions and results used for structured review.
Read lessonSources & further reading: CFTC · Investor.gov