Trading Glossary

What is a Pip in Forex?

A pip is the smallest standardized price movement in a forex pair — 0.0001 for most pairs, 0.01 for JPY pairs. Learn how pips work and how to calculate their value.

What is a Lot Size in Forex?

A lot is the standardized unit of currency in forex trading. Learn the difference between standard, mini, micro, and nano lots and how to choose the right one.

What is Leverage in Trading?

Leverage lets you control a position larger than your capital. Learn how leverage works in forex, crypto, and stocks, and how to use it without blowing your account.

What is a Stop Loss Order?

A stop loss is an automatic exit order that limits your loss on a trade. Learn how stop losses work, the main types, and how to place them correctly.

What is Margin in Forex and Trading?

Margin is the collateral your broker holds while a leveraged trade is open. Learn how required margin, free margin, and margin calls work.

What is Drawdown in Trading?

Drawdown is the decline from a trading account's peak value. Learn the difference between max drawdown and absolute drawdown, and why recovery math should change how you size trades.

What is the Spread in Forex Trading?

The spread is the difference between the bid and ask price in forex. It is the primary transaction cost of trading and directly affects your breakeven point on every trade.

What is Position Sizing in Trading?

Position sizing is the process of determining how many shares, lots, or units to trade based on your risk tolerance and stop loss distance. It is the foundation of risk management.