Ask Price
The lowest price at which a seller is willing to sell a currency pair.
Bid Price
The highest price a buyer is willing to pay for a currency pair.
Bull Market
A market condition where prices are rising or are expected to rise.
Bear Market
A market condition where prices are falling or expected to fall.
Pip (Percentage in Point)
The smallest price movement in a currency pair, usually the fourth decimal place (0.0001).
Lot Size
A unit of measure in forex trading. A standard lot is 100,000 units of the base currency.
Leverage
A trading tool that allows traders to control larger positions with a smaller amount of capital. Example: 1:100 leverage means $100 controls $10,000 in the market.
Margin
The minimum amount of capital required to open and maintain a leveraged trade.
Stop-Loss Order
A preset order that automatically closes a trade to limit losses when a certain price level is reached.
Take-Profit Order
A preset order that automatically closes a trade to lock in profits at a certain price level.
Spread
The difference between the bid price and the ask price of a currency pair.
Currency Pair
A pair of currencies where one is exchanged for another. Example: EUR/USD.
Base Currency
The first currency in a currency pair. In EUR/USD, EUR is the base currency.
Quote Currency
The second currency in a currency pair. In EUR/USD, USD is the quote currency.
Liquidity
How easily an asset can be bought or sold in the market without affecting its price.
Slippage
The difference between the expected price of a trade and the actual execution price, usually occurring during high volatility.
Volatility
The measure of price fluctuations in the forex market.
Fundamental Analysis
Evaluating a currency based on economic indicators, news events, and political factors.
Technical Analysis
Using historical price charts, patterns, and indicators to predict future price movements.
Swap
A fee or credit applied when holding a position overnight, based on interest rate differentials.
Scalping
A short-term trading strategy that involves making multiple small trades for quick profits.
Swing Trading
A trading style where positions are held for days or weeks to capture price swings.
Day Trading
A trading style where all trades are opened and closed within the same trading day.
Copy Trading
A method where traders automatically copy the trades of experienced traders.
Hedging
A strategy used to reduce risk by opening multiple positions in opposite directions.
Carry Trade
A strategy where traders borrow a currency with a low interest rate to buy a currency with a higher interest rate, profiting from the difference.