Forex Glossary

The standard unit of price movement in a currency pair: 0.0001 on most pairs and 0.01 on yen pairs. Pip value depends on position size and account currency; see what is a pip.

A tenth of a pip, shown as the fifth decimal on most pairs or the third on yen pairs. Most MT4/MT5 servers quote prices to the pipette; see what is a pip.

The smallest price step a symbol is quoted in, as set in its MT4/MT5 specification. On 5-digit pairs a point equals a pipette; swap rates are often quoted in points (swap explained).

The bid is the price you can sell at and the ask the price you can buy at. Buys open at the ask and close at the bid, which is why every trade starts slightly negative; see what is spread.

The difference between the ask and the bid, and the main trading cost on standard accounts. Spreads widen in thin markets and around news; see what is spread.

A fixed charge per lot, usually on ECN or raw-spread accounts in exchange for tighter spreads. Compare it with the spread to find the total cost; see account types.

The difference between the price you asked for and the price you got. It’s most common in fast markets, at the weekly open and around high-impact releases; see trading high-impact news.

A dealer’s refusal to fill at the requested price, offering a new one instead. It occurs with instant execution; with market execution orders fill at the next available price instead (news trading).

The overnight financing credited or charged on positions held past the daily rollover, based on the interest-rate difference between two currencies plus the broker’s markup; see forex swap explained.

The day on which three nights of swap are charged at once to cover the weekend. Many servers use Wednesday, but the MT5 symbol specification shows the actual day (swap explained).

An account that doesn’t charge or pay swap, often offered to traders who can’t pay interest for religious reasons. Some replace swap with an administration fee; see forex swap explained.

A charge some brokers take from accounts with no trading for a set period, usually only up to the available balance; see forex inactivity fees by broker.

The unit of trade size. One standard lot is 100,000 units of the base currency, or usually 100 oz of gold; see lot size in forex.

0.1 standard lots, or 10,000 units of currency. Entered as 0.10 in the MT4/MT5 volume box (lot size).

0.01 standard lots, or 1,000 units: the smallest size at most brokers on a standard account (lot size).

The number of units one lot represents for a given symbol, shown in its MT4/MT5 specification. It differs between currencies, metals, indices and cent accounts (lot size).

The ratio between the position you can control and the margin you must put up. At 1:500, a $100,000 position needs $200 of margin; see forex leverage explained.

The value of your open positions divided by your equity. It measures the risk you’re actually taking, whatever the account’s maximum leverage; see leverage explained.

The money locked by the broker while a position is open, calculated from contract size, lots, price and leverage. It’s a deposit, not a cost; see leverage explained.

Equity minus used margin: the money available to open new trades or absorb losses. When it reaches zero you can’t open more positions (margin level).

Balance plus or minus the floating profit or loss of open positions, and at some brokers bonus credit. It’s the figure margin level is calculated from (margin level).

The account’s cash after closed trades, deposits, withdrawals, swap and fees, not counting open positions (margin level).

Equity divided by used margin, times 100. Brokers use it to trigger margin calls and stop-outs; see margin level, margin call and stop out.

A warning level of margin level, set by the broker, at which you’re told the account is close to a stop-out. Some brokers also restrict new trades below it (margin level).

The margin level at which the broker starts closing positions automatically, usually the largest loss first. Levels vary by broker and account; see margin level explained.

A broker policy of resetting an account to zero if losses exceed the balance, so you don’t owe the difference. Not every offshore entity offers it; see negative balance protection explained.

Leverage that falls automatically as equity rises, or around news and weekends. Many offshore brokers publish equity tiers; see forex leverage explained.

Holding a buy and a sell on the same symbol at once. Brokers’ rules on hedging within or across accounts differ; see hedging rules.

An order to buy or sell immediately at the best available price. Fills can differ from the quote in fast markets (MT5 guide).

An order to open a trade later at a set price: buy limit, sell limit, buy stop or sell stop, with stop-limit types added in MT5 (MT5 guide).

An order that closes a trade at a set loss. It becomes a market order when triggered, so it can fill beyond its level in a gap; see risk management.

An order that closes a trade when it reaches a set profit level (MT5 guide).

MetaQuotes’ older trading platform, still widely offered for forex and EAs. How it compares with MT5 is in MT4 vs MT5.

MetaQuotes’ newer multi-asset platform, with more timeframes and order types than MT4 and both hedging and netting modes; see how to use MT5.

An automated trading program that runs inside MT4 or MT5 desktop. It can’t run in the mobile apps; see how to install an EA.

A virtual private server that keeps MT4/MT5 and its EAs running around the clock. Some brokers provide one free if you meet conditions; see forex VPS.

A charting platform that some brokers connect to, letting you trade from its charts; see brokers that connect to TradingView.

Automatically copying another trader’s positions into your account. Their losses become yours; see how copy trading works.

Trading for very small price moves with short holding times. Most brokers allow it, but some restrict practices around it; see scalping rules.

An account type with costs built into the spread and no commission. Usually the one bonuses apply to; see how to choose an account type.

An account with raw spreads, often from 0.0 pips, plus a commission per lot. The total cost is spread plus commission (account types).

An account whose balance is shown in cents and whose lots are smaller, so very small amounts can be traded (account types).

A practice account with virtual money and the broker’s prices. Fills and slippage can differ from real trading (MT5 guide).

The currency your trading account is held in, such as USD, EUR or JPY. Results and margin are converted into it (deposit methods).

Trading credit added in proportion to a deposit. It usually can’t be withdrawn and is reduced or removed when you withdraw; see how forex bonuses work.

Credit given for opening or verifying an account without depositing. Conditions on withdrawing profits are usually strict (bonus rules).

The MT4/MT5 field where bonus money appears, separate from balance. At many brokers it counts towards equity but not towards what you can withdraw (bonus rules).

A payment per lot traded, from the broker or a rebate site, returning part of the spread or commission; see forex cashback rebates explained.

A referral or introducer code entered at sign-up that links your account to an introducing broker or rebate provider (cashback explained).

“Know your customer”: identity and address checks required before you can trade or withdraw. Documents not matching your profile are a common cause of delays (withdrawal problems).

A recent utility bill, bank statement or official letter showing your name and address, used in KYC (withdrawal problems).

The anti-money-laundering rule that withdrawals go back to the method you deposited with, at least up to the amount deposited; see deposit methods compared.

A deposit from an account in someone else’s name. Brokers refuse them; see why brokers reject withdrawals.

A payment account such as Skrill, Neteller or Sticpay used to fund trading accounts, usually instantly (deposit methods).

A US-dollar stablecoin used for crypto deposits. Sending it on the wrong network can lose the funds; see how to fund an account with USDT.

How long the broker takes to approve a withdrawal, separate from the time the payment then takes to arrive (withdrawal problems).

A broker licensed in a jurisdiction with lighter rules, such as Seychelles, Mauritius or Vanuatu, often offering higher leverage and bonuses; see what is offshore forex.

In this site’s usage, a broker licensed by a strict regulator such as the UK FCA or Cyprus’s CySEC, with leverage caps and investor protection; see regulated vs offshore brokers.

A rough grouping of regulators by how strict their supervision is, from tier-1 regulators to light offshore registrations; see broker licences ranked by tier.

The official public list of firms a regulator has licensed. Searching it yourself is the first check on any broker; see how to spot a scam broker.

The legal company that holds your account. One brand can run several entities under different licences, and the one serving your country decides your protections (licences).

The Financial Services Authority of Seychelles, which licenses securities dealers used by many offshore brokers; see Seychelles FSA licence.

The Financial Services Commission of Mauritius, which licenses investment dealers; see Mauritius FSC licence explained.

The Vanuatu Financial Services Commission, which issues financial dealer licences; see Vanuatu VFSC licence explained.

The Cyprus Securities and Exchange Commission, an EU regulator applying ESMA’s retail leverage limits; see CySEC regulation.

The EU’s retail CFD rules, capping leverage at 30:1 on major currency pairs and lower on other instruments, with a 50% margin close-out and negative balance protection; see regulated vs offshore brokers.

Client money held in bank accounts separate from the broker’s own money. It helps if the broker fails, but isn’t the same as compensation; see segregated funds and investor compensation.

A fund that pays eligible clients up to a limit if a regulated firm fails, such as the UK FSCS or Cyprus’s ICF. Offshore licences usually have none; see fund protection.

An independent dispute-resolution body some offshore brokers join, with its own compensation fund per complaint. It’s a private membership, not a regulator (fund protection).

Two currencies quoted against each other, such as EUR/USD. The first is the base currency and the second the quote currency, in which the price is given (what is a pip).

A contract for difference: a leveraged contract on a price change without owning the asset. Index, oil, gold, crypto and stock trading at brokers is via CFDs (index CFDs).

The code for gold priced in US dollars per ounce. One lot is usually 100 oz; see how to trade gold.

A schedule of data releases and central bank events with forecasts and results, used to plan around volatile moments; see how to read an economic calendar.

The monthly US jobs figure in the Bureau of Labor Statistics’ Employment Situation report, one of the most market-moving releases; see trading NFP and high-impact news.

How much and how fast a price moves. High volatility raises both the chance of reaching a target and of slippage past a stop (risk management).

A jump in price with no trading in between, typically at the weekly open or on a release. Stops in the gap fill at the next price (risk management).

The fall in an account from its peak, in money or per cent. A useful measure when judging a strategy or a copy-trading provider (copy trading).