Trading terms, in plain English
The words on the order ticket, explained — so you know exactly what you're doing before you click buy or sell. Every term links to a calculator that does the maths for you.
Leverage Amplifier
Borrowed size. 10× leverage means $100 of your money controls a $1,000 position. It multiplies both profit and loss by the same factor — the single fastest way to blow an account when it's too high.
Margin Your stake
The cash set aside to open a leveraged trade — your slice of the full position. Position size ÷ leverage. If the trade loses enough that margin can't cover it, it gets liquidated (force-closed).
Pip Unit of move
The smallest standard price step in forex — the 4th decimal for most pairs (0.0001), the 2nd for JPY pairs (0.01). How profit, loss and spread are measured. Pip value depends on your position size.
Spread Cost of entry
The gap between the buy (ask) and sell (bid) price — what you pay to get in, before the market even moves. A trade starts slightly negative by the spread, so tight spreads matter most for short-term trading.
Risk : Reward The edge
How much you stand to make versus how much you'll lose if wrong — distance to your target ÷ distance to your stop. Aiming for at least 1:2 means you can be right less than half the time and still grow.
Position sizing by risk %
Decide the most you'll lose on any one trade — usually 1–2% of your balance — then let that and your stop distance set your size. Never the other way round. It's the habit that separates traders who last from those who don't.
Expectancy & drawdown
Expectancy is your average profit per trade over many trades — positive means an edge. Drawdown is how far your balance falls from its peak; small, controlled drawdowns are what let you survive losing streaks and compound.
Daily limits & discipline
Capping your daily loss and number of trades stops one bad session from becoming a disaster. Over-trading and revenge-trading after a loss are top account-killers — a hard stop protects you from yourself.