Expert Glossary

Ask (offer) – price of the offer, the price you buy currency for.

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Bid – price of the demand, the price you sell currency for.

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Broker – is a company that acts as the middleman between trader and larger commercial institution.

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Commission – certain amount of money that broker takes for operation handling.

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EA (expert advisor) or Robot – an automated script, that was written by professional trader and used by the trading platform to manage buy/sell orders automatically.

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Flat (square) – neutral state, when all your positions are closed

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Leverage – use of borrowed capital, allowing the Forex trader to gain access to larger sums of capital. This can heighten profits and losses and should be used wisely.

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Floating leverage – a leverage that changes depending on the total size of open positions.

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Gap – a difference between the previous period’s price and the next open price. It usually happens during weekends – between the Friday’s close and the Monday’s open price.

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Lot – a definite amount of money for every operations handled (usually it is a multiple of 100)

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Margin – money that is not involved in trading and you can use it to take more positions.

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Margin call – is a situation when your margin deposits have fallen below the required minimum level.

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Order (trade) – an order for a broker to buy or sell a currency at a certain rate.

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Pip (point) – the last digit in a currency rate (e.g. EUR/USD = 0.0001)

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Profit (gain) – positive amount of money that you earn for closing the position.

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Scalping – a special type of trading, where a big number of positions are opened for short-term profits.

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Stop-loss order (SL) – an order to close a deal when the market reaches a certain rate.

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Slippage – execution of an order at a rate different from ordered.

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Spread – a difference between ask and bit rates of a currency pair.

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Swap – an overnight fee for holding a position in Forex.

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Trend – a market’s direction established under an influence of different factors.

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Volatility – a statistical measure of the number of price changes for a given currency pair in a given period of time.

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VPS (Virtual Private Server) – a virtual space hosted on a dedicated server, used to run programs independent on the user’s PC.

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