Stepping into the world of Forex trading? Great — but let’s be honest: the jargon can be overwhelming at first. This glossary breaks down the most essential Forex terms in simple language so you can read charts, watch videos, and follow strategies without feeling lost.
💱 Basic Market Terms
Currency Pair: Two currencies traded against each other (e.g., EUR/USD). The first is the base currency, the second is the quote currency.
Major Pairs: Currency pairs that include the US dollar and are the most traded (e.g., EUR/USD, USD/JPY).
Pip (Point in Percentage): The smallest price movement in Forex. For most pairs, 1 pip = 0.0001.
Spread: The difference between the buy (ask) and sell (bid) price. This is how brokers earn.
Leverage: A tool that allows you to control a larger position with less capital.
Example: 1:100 leverage lets you control $10,000 with just $100.Margin: The money required to open and maintain a trade when using leverage.
📊 Order Types
Market Order: An order to buy or sell at the current market price.
Limit Order: An order to enter the market at a better price than the current one.
Stop Order (or Stop Loss): An order to buy or sell once price reaches a certain level, commonly used to limit losses.
Take Profit (TP): An automatic order to close your trade when it reaches a profit target.
Stop Loss (SL): An automatic order to close your trade when it hits a preset loss level.
📈 Chart & Analysis Terms
Candlestick: A chart shape showing the open, high, low, and close for a given time period.
Support: A price level where a downtrend tends to pause or reverse — price "bounces up."
Resistance: A price level where an uptrend tends to stall or reverse — price "bounces down."
Trend: The overall direction of the market — uptrend, downtrend, or sideways.
Indicator: A tool used to analyze price movements (e.g., RSI, Moving Average, MACD).
💡 Trading & Account Terms
Lot: The size of your trade.
Standard lot = 100,000 units
Mini lot = 10,000 units
Micro lot = 1,000 units
Equity: The total value of your account, including current open trades.
Balance: The money in your account, excluding ongoing trades.
Drawdown: The difference between your balance and equity during a losing trade.
Slippage: The difference between expected and actual execution price of a trade.
Swap: A fee or credit for holding a position overnight, based on interest rate differences.
🚀 Final Tip for Beginners
You don’t need to memorize everything.
Start by understanding terms you’ll use every day — like pip, spread, SL/TP, and lot size.
As you trade more, the rest will naturally become part of your vocabulary.
Bookmark this glossary and come back to it anytime you’re unsure.
The more fluent you are in trading language, the more confident you’ll feel in every trade.