Forex
Currency pairs, pips and lots, brokers, margin, swaps and macro.
35 terms · 2 guides
Guides
Starting forex: pair, pip, lot, spread
Four ideas you need to read any forex quote.
Read →How to choose a forex broker: a beginner's checklistA broker holds your money and executes your trades, so choose one for safety, not for bonuses. Here is what to check, in order.
Read →For beginners
Balance, equity and free marginBalance is the money in your account excluding open trades. Equity is balance plus the current profit or loss on them. Free margin is…BeginnerBroker commissionA broker commission is a fixed fee per trade charged on top of the spread, usually in dollars per lot. It is typical on tight-spread…BeginnerBroker regulationBroker regulation is government oversight of forex and CFD brokers: licences, capital requirements, how client money is held and how…BeginnerCentral bank rateA central bank rate is the key interest rate a central bank uses to set the cost of money in an economy. Loans, savings and the exchange…BeginnerCurrency pairA currency pair is the price of one currency in another. In EUR/USD the euro is the base and the dollar is the quote; the price shows how…BeginnerEconomic calendarAn economic calendar is a schedule of key economic data releases and events, such as inflation, jobs and rate decisions. It shows the…BeginnerForexForex (FX) is the global market for exchanging currencies, where one currency is bought with another. It is the largest financial market…BeginnerGDPGDP (gross domestic product) is the value of all goods and services produced in a country over a period. Its growth shows whether the…BeginnerGold (XAU/USD)XAU/USD is the price of gold in US dollars per troy ounce (about 31.1 g). Brokers offer gold as a currency-style pair, usually as a CFD or…BeginnerInflation and CPIInflation is the rise in prices across an economy. CPI (Consumer Price Index) is its main measure: it tracks how much a typical basket of…BeginnerLotA lot is the standard unit of trade size in forex. One standard lot is 100,000 units of the base currency, a mini lot 10,000 and a micro…BeginnerMajors, minors and exoticsMajors, minors and exotics are groups of currency pairs. Majors pair the US dollar with the largest currencies, minors leave out the…BeginnerMargin callA margin call is a broker's warning that your account barely has enough funds to keep open positions. You need to add money or close some…BeginnerMetaTrader 4 and 5MetaTrader 4 and 5 (MT4 and MT5) are popular trading platforms for forex and CFDs, with charts, indicators, orders and trading robots. The…BeginnerNegative balance protectionNegative balance protection is a rule that stops a client from losing more money than was in the account. If a sharp move pushes the…BeginnerPipA pip is the standard minimum price step in forex. For most pairs it is the fourth decimal place (0.0001); for yen pairs it is the second…BeginnerPip valuePip value is how much money a one-pip price move makes or loses for a given position size. For 1 lot of EUR/USD it is $10.BeginnerSafe-haven assetA safe-haven asset is one investors buy during panics because it tends to hold its value or rise when risky assets fall.BeginnerStock indexA stock index is a number that tracks the combined price of a group of stocks, such as the 500 largest US companies. It is used to judge…BeginnerStop outA stop out is when a broker force-closes your positions because your margin level has fallen to a set threshold, such as 50%. It stops…BeginnerSwap (rollover)A swap (rollover) is a charge or credit for holding a position overnight. It depends on the interest-rate gap between the two currencies…BeginnerTrading sessionsTrading sessions are the working hours of the main financial centers: Asian, London and New York. Activity and volatility peak when the…Beginner
Advanced
Carry tradeA carry trade is a strategy of borrowing a low interest rate currency and investing in a high-rate one to earn the rate difference. The…AdvancedCross rateA cross rate is the exchange rate between two currencies without the US dollar, such as EUR/GBP or EUR/JPY. You can work it out from two…AdvancedCurrency correlationCurrency correlation is a measure of how closely two currency pairs move together. It runs from −1 (always opposite) to +1 (always…AdvancedDealing desk and market makerA dealing desk is a broker model where the broker itself takes the other side of your trades, acting as a market maker, instead of passing…AdvancedECN and STPECN and STP are models in which a broker routes your order to the outside market instead of taking the other side. ECN matches orders in a…AdvancedFOMC (Federal Reserve)The FOMC (Federal Open Market Committee) is the body of the US Federal Reserve that sets the benchmark US dollar interest rate. Its…AdvancedMargin levelMargin level is equity divided by used margin, expressed as a percentage. It shows how far your account is from a margin call and forced…AdvancedNFP (Non-Farm Payrolls)NFP (Non-Farm Payrolls) is the monthly count of new US jobs outside farming. It usually comes out on the first Friday of the month.AdvancedPipetteA pipette is one tenth of a pip, the fifth decimal place in a quote such as EUR/USD 1.08505. For yen pairs it is the third decimal place.AdvancedPMIPMI (Purchasing Managers' Index) is a survey of purchasing managers on orders, output and hiring. A reading above 50 means activity is…AdvancedRequoteA requote is when a broker does not fill your order at the price you asked for and offers a new price instead. You can accept it or cancel…AdvancedSegregated client accountsSegregated client accounts are a rule that a broker keeps client money apart from its own funds. That makes it harder to spend on company…AdvancedUS Dollar Index (DXY)The US Dollar Index (DXY) measures the dollar's strength against a basket of six currencies, more than half of which is the euro. A rising…Advanced
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