Forex & Crypto Glossary
Clear, plain-language definitions of the trading terms you'll run into most often on broker websites and in our reviews.
A
Altcoin
Any cryptocurrency other than Bitcoin — for example Ethereum, Solana, or XRP.
Ask (Offer) Price
The price at which you can buy an instrument. Always slightly higher than the bid price.
B
Balance
The total cash in your trading account, not counting the profit or loss of any open positions.
Bid Price
The price at which you can sell an instrument. Always slightly lower than the ask price.
Blockchain
A distributed, tamper-resistant ledger that records transactions across many computers — the underlying technology behind Bitcoin and most cryptocurrencies.
C
CFD (Contract for Difference)
A derivative contract that lets you trade on the price movement of an asset without owning it. Profit or loss is based on the difference between the opening and closing price.
Cold Wallet
A cryptocurrency wallet kept offline (e.g. a hardware device), used for safer long-term storage since it isn't exposed to internet-based attacks.
D
Drawdown
The drop from a peak in account equity to a subsequent low, usually expressed as a percentage — a key measure of risk exposure.
E
ECN (Electronic Communication Network)
A trading model that matches buy and sell orders directly between market participants, typically offering tighter spreads plus a separate commission.
Equity
Your account balance adjusted for the floating profit or loss of any currently open positions.
F
Fill
The completion of an order at a specific price — a trade is "filled" once it has been fully executed.
FOMC (Federal Open Market Committee)
The US Federal Reserve committee that sets interest rate policy — its meetings are among the most closely watched events in forex.
Fundamental Analysis
Evaluating a currency's value based on economic data, interest rates, and geopolitical events, rather than chart patterns.
G
Gap
A jump in price from one level to another with no trading in between, often seen when the market reopens after a weekend or holiday.
Grid Trading
A strategy that places a series of buy and sell orders at set price intervals above and below the current price, aiming to profit from normal market fluctuation.
H
Hedging
Opening a position to offset the risk of an existing one — for example holding both a long and short position on the same instrument.
Hot Wallet
A cryptocurrency wallet connected to the internet, convenient for active trading but more exposed to hacking risk than a cold wallet.
I
Inflation
The rate at which the general price level of goods and services rises over time, eroding purchasing power — a key factor in central bank interest rate decisions.
Interbank Market
The network of banks that trade currencies directly with each other at wholesale rates, forming the foundation of the broader forex market.
J
Jobless Claims
A weekly US report counting new applications for unemployment benefits, used as an early signal of labor market health between monthly jobs reports.
K
KYC (Know Your Customer)
The identity verification process brokers and exchanges must complete before letting a client deposit or withdraw funds.
L
Leverage
Borrowed capital from a broker that lets you control a larger position than your deposit alone would allow — for example 1:100 leverage lets $100 control a $10,000 position. Leverage amplifies both gains and losses.
Limit Order
An order to buy or sell only at a specified price or better, rather than at the current market price.
Liquidity
How easily an asset can be bought or sold without significantly moving its price. Highly liquid markets (like major forex pairs) tend to have tighter spreads.
Lot
A standardized trade size. A standard lot is 100,000 units of the base currency; a mini lot is 10,000; a micro lot is 1,000.
M
Margin
The amount of your own funds a broker sets aside as collateral to open and hold a leveraged position.
Margin Call
A warning from your broker that your account equity has fallen close to the required margin level, meaning you need to deposit more funds or reduce positions to avoid a stop out.
Market Maker
A broker model where the broker takes the other side of client trades internally, rather than routing orders to external liquidity providers.
Market Order
An order to buy or sell immediately at the current available market price.
MetaTrader (MT4/MT5)
The most widely used third-party trading platforms in retail forex, offering charting, automated trading (EAs), and a common interface across many brokers.
N
Net Position
The combined size and direction of all open trades on a given instrument, after offsetting buys against sells.
NFP (Non-Farm Payrolls)
A monthly US report on job creation outside the farming sector, widely regarded as one of the most market-moving economic releases.
O
Order Book
A list of pending buy and sell orders at different price levels for a given instrument.
OTC (Over-the-Counter)
Trading conducted directly between two parties rather than through a centralized exchange — this is how most forex trading actually happens.
Overnight / Swap Fee (Rollover)
A fee or credit applied when a leveraged position is held open past the daily market close, reflecting the interest rate differential between the two currencies traded.
P
Pip
The smallest standardized price movement for a currency pair, usually the fourth decimal place (or second, for pairs involving the Japanese yen).
Q
Quantitative Easing (QE)
A central bank policy of buying assets to inject money into the economy, typically used to lower interest rates and stimulate growth.
Quote Currency
The second currency in a pair, showing how much of it is needed to buy one unit of the base currency.
R
Regulator
A government or independent authority (such as the FCA, ASIC, or CySEC) that licenses and supervises brokers to protect client funds and enforce fair conduct.
S
Scalping
A short-term trading style aiming to profit from small price movements, typically holding positions for seconds to minutes and placing many trades per day.
Slippage
The difference between the price you expected an order to fill at and the price it actually filled at, usually caused by fast-moving markets or low liquidity.
Spread
The difference between the bid and ask price of an instrument — one of the main ways brokers charge for trades.
Stablecoin
A cryptocurrency designed to hold a stable value, usually pegged 1:1 to a fiat currency like the US dollar (e.g. USDT, USDC).
Staking
Locking up cryptocurrency to help secure a proof-of-stake network, in exchange for rewards paid in that same cryptocurrency.
Stop Loss
An order that automatically closes a position once the price reaches a specified level, used to limit potential losses.
Stop Out Level
The margin level at which a broker will automatically start closing a trader's open positions to prevent the account balance from going negative.
STP (Straight Through Processing)
A broker model that routes client orders directly to external liquidity providers without a dealing desk in between.
T
Take Profit
An order that automatically closes a position once the price reaches a specified profit target.
U
Unrealized P&L
The paper profit or loss on a position that's still open — it only becomes "realized" once the position is closed.
Uptrend
A sustained period where price makes progressively higher highs and higher lows.
V
Volatility
How much and how quickly the price of an asset moves over a given period — higher volatility means larger, faster price swings.
Volume
The total amount of an asset traded over a given period, often used as an indicator of market interest or liquidity.
W
Weighted Average
An average that gives more importance to some values than others — for example, a moving average that weights recent prices more heavily.
Whipsaw
A choppy market condition where price reverses direction sharply and repeatedly, often triggering stop losses on both sides of a move.
X
XAU/USD (Gold)
The ticker symbol for gold priced in US dollars, traded by many forex brokers alongside currency pairs.
Y
Yield
The income generated by holding an asset, such as interest earned — a key driver of currency strength in carry trade strategies.
YoY (Year-over-Year)
A way of comparing a data point to the same period one year earlier, used to smooth out seasonal effects in economic data.
Z
Zero-Sum Game
A situation where one trader's gain is exactly matched by another trader's loss — commonly used to describe leveraged derivatives trading.