TRADING GLOSSARY

Trading Terms Glossary

Plain-English definitions for the risk and trading terms you'll see across our calculators and journal.

Pip

The smallest standard price move in a currency pair — usually the fourth decimal place.

The dollar (or account-currency) value of a single pip move, based on lot size and pair.

The number of currency units in a single forex trade — standard, mini, or micro.

Borrowed buying power that lets you control a larger position than your account balance alone.

The portion of your account balance a broker sets aside as collateral for an open position.

A broker warning (or forced liquidation) that your account equity has fallen too close to used margin.

The decline from an account's peak balance to a subsequent low point, usually shown as a percentage.

The statistical probability that a trading strategy loses so much capital it can no longer continue.

How much you stand to gain versus how much you're risking on a single trade.

The average profit or loss per trade a strategy produces over many repetitions.

The percentage of trades that close as winners out of all trades taken.

A predefined price level that automatically closes a trade to cap the loss.

A predefined price level that automatically closes a trade to lock in a gain.

The exact number of shares, contracts, or lots to trade based on account risk and stop distance.

The gap between the bid (sell) and ask (buy) price of an instrument.

The difference between the price you expected to trade at and the price you actually got.

Reinvesting trading gains so future position sizes grow with the account balance.

Horizontal levels based on key Fibonacci ratios used to anticipate where a price pullback might pause.

Your account balance adjusted for the current floating profit or loss of open trades.

The portion of account equity not tied up as margin, available to open new trades or absorb losses.