Learning reference · English
Forex glossary
Standard trading terms, explained in plain English. Contract details and platform terminology can vary.
- Account currency
- The currency in which the trading account's balances are reported.
- Ask
- The available price for buying the base currency.
- Backtesting
- Applying strategy rules to historical data; results depend on data, costs and assumptions and do not guarantee future performance.
- Base currency
- The first currency in a pair; the quote is for one unit of it.
- Bid
- The available price for selling the base currency.
- Correlation
- A measure of how variables move together over a chosen sample; it can change and does not establish causation.
- Cross pair
- A currency pair that does not contain USD.
- Drawdown
- A decline from a previous account-value peak; specify whether equity or balance is measured.
- DST
- Daylight-saving time: a seasonal change to some regions' clock offsets.
- Equity
- Account value including open-position results and relevant adjustments.
- Exotic pair
- A common label for a pair involving a less-traded currency; classifications vary.
- Forex
- The foreign-exchange market, where currencies are exchanged.
- Free margin
- Equity minus used margin in a simplified account calculation.
- Gross P/L
- Price profit or loss before applicable trading costs.
- IANA time zone
- A named zone such as Africa/Lagos that includes date-dependent clock rules.
- Leverage
- The relationship between exposure and required margin.
- Limit order
- An instruction with a maximum buy price or minimum sell price.
- Liquidity
- How readily a quantity can trade without substantial price impact.
- Long
- Exposure that benefits from a rise in the pair price before costs.
- Lot
- A contract-size unit; conventional standard FX uses 100,000 base units.
- Major pair
- A commonly traded pair including USD and another heavily traded currency.
- Market order
- An instruction to trade promptly at available prices.
- Net P/L
- Result after relevant costs and adjustments.
- Notional
- The full monetary exposure represented by a position.
- OTC
- Over the counter: trading through a network rather than a single central exchange.
- Overlap
- A period when two referenced session windows intersect.
- Pip
- A conventional unit of Forex price movement.
- Pip value
- The monetary value of one pip for a specified position and currency.
- Point
- A platform-defined price increment; often one tenth of a pip on fractional Forex quotes.
- Quote currency
- The second currency, used to measure the base currency's price.
- Session
- A conventional period associated with a financial centre's local business day.
- Short
- Exposure that benefits from a fall in the pair price before costs.
- Slippage
- A difference between expected and executed price.
- Speculation
- Taking price risk in the hope of a gain, with the possibility of a loss.
- Spread
- Ask minus bid.
- Stop order
- An instruction activated by a specified price condition.
- Stop-loss
- An exit instruction intended to limit an adverse position; requested execution price is not generally guaranteed.
- Stop-out
- Provider-defined forced closure under insufficient-margin conditions.
- Take-profit
- An exit instruction intended to close at a favourable price level, subject to execution rules.
- Volume step
- The permitted increment between available order sizes.