Ask Rate is the rate at which a trader can buy a currency that is for sale.
Base Currency is the currency in which other currencies are quoted in a pair. Usually the U.S. dollar is considered the ‘Base Currency’.
Bid/Ask Spread is the difference between the bid and offer price or buy and sell price.
Big Figure is a term used by dealer and/or brokers. It refers to the first few digits of an exchange rate.
Clearing is a term used to refer to a process of settling a trade.
Commission is the fee that is charged by a broker/dealer.
Confirmation is a document that states the terms of a transaction.
Contract is the standard unit of trading.
Cross Rate is the exchange rate between any two currencies that are not of the country in which the currency pair is quoted. For example, in the U.S., a GBP/JPY quote would be considered a Cross Rate. The same quote would not be a Cross Rate in either the U.K. or Japan.
Currency is a unit of exchange. Any form of money that has been issued by a government/central bank is a currency. Currencies are used as a medium of exchange, i.e. they are used as a basis for trades.
Dealer is an individual/firm that take one side of a position hoping to make a profit by closing out the position in a following trade with a different trader.
Forward is the predetermined and agreed upon exchange rate for the settling of a transaction at some agreed future date.
Initial Margin is the deposit given to a broker/dealer; it is the collateral required to enter into a position as a guarantee on future performance.
Limit Order is an order that sets restrictions on the amount of profit and loss it can make.
Liquidity is the ability of a market to accept large transaction without it impacting the stability of its prices.
Margin Call is when the broker/dealer request additional collateral to guarantee performance on a position that has moved against the investor.
Market Maker is a dealer who quotes both bid and ask prices, hence makes a two-sided market for any financial instrument.
Maturity is the date in which a financial instrument is expired or a transaction is settled.
Offer is the rate at which a dealer is willing to sell.
Open position is a deal that has not yet been settled with a physical payment or opposite transaction.
Pips/Points is one unit of price change in the bid/ask price of a currency. It is the last digit in a rate; the fourth decimal place in an exchange rate.
Position is the netted total holdings of a given currency.
Quote is an indicative market price, normally used for information purposes only and not for deals.
Rate is the price of one currency in terms of another.
Risk is an exposure to the chance of loss.
Roll-Over is a process in which the settlement of a transaction is pushed forward to another date.
Spread refers to the difference between the bid and offer prices for a currency pair.
Swap is the sale and purchase of a certain amount of a certain currency at a forward exchange rate.
Transaction Cost is the cost of making a financial transaction whether it is buying or selling.
Cable
Also known as Sterling. Dealer slang for the GPB/USD currency pair.
Counter Currency/Pip Currency/quote currency
The counter currency is the second currency in any currency pair. Its value is determined against the base currency’s value. For example, in the following currency pair EUR/USD, the counter currency is USD.
Hedging
The practice of opening several positions at once where one position minimizes the risk of another position.
While there are intellectuals who may differ on definitions for hedging. Many novices also mistake trading strategies for hedging. Hedging should be an activity our of which there is a definite primary safety arises for the open positions.
Leverage
Leverage is a loan from your broker, which enables you to trade with a small amount of capital. It can increase your potential profit, but it can also increase your risk
Loonie
Dealer slang for the USD/CAD currency pair.
Lot
The standard unit of trading. One standard lot equals 100,000 units of the base currency, a mini lot equals 10,000 units, and a micro lot equals 1,000 units. eToro’s standard trade volume is the mini lot.
Swissy
Dealer slang for the USD/CHF currency pair.
Virtual Balance
Your current potential account balance that can be realized by closing all your open trades.
Bank Rate — the percentage rate at which central bank of a country lends money to the country's commercial banks.
Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
CFD — a Contract for Difference — special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.
ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.
Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.
Flat (Square) — neutral state when all your positions are closed.
GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.
Jobber — a slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight.
Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.
Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.
Margin Account — account which is used to hold investor's deposited money for FOREX trading.
Market Order — order to buy or sell a lot for a current market price.
Market Price — the current price for which the currency is traded for on the market.
Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
Principal Value — the initial amount of money of the invested.
Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.
Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.
Standard Lot — 100,000 units of the base currency of the currency pair, which you are buying or selling.
Stop-Limit Order — order to sell or buy a lot when the market reaches certain price. Usually is a combination of stop-order and limit-order.
Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.
Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.
Useable Margin — amount of money in the account that can be used for trading.
Used Margin — amount of money in the account already used to hold open positions open.
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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