The words behind the numbers.

Trading terms, defined plainly

Trading has an unusual amount of jargon for a field where precision matters. These are the terms that appear most often in our own documentation and on the platform.

Ask

The price at which you can buy. Always the higher of the two prices quoted.

Bid

The price at which you can sell. Always the lower of the two prices quoted.

CFD

Contract for difference — an agreement to exchange the difference in an instrument’s price between opening and closing, without owning the instrument.

Drawdown

The fall from a peak in account equity to the subsequent trough, usually stated as a percentage.

Equity

Your account balance adjusted for the unrealised profit or loss on open positions.

Expert Advisor

An automated strategy that runs inside the MetaTrader 5 desktop terminal and places orders without manual intervention.

Free margin

Equity less the margin currently reserved by open positions — what remains available to absorb movement.

Gap

A jump between one price and the next with no trading in between, typically across a weekend or a major announcement.

Leverage

The ratio between position size and the margin required to hold it. Higher leverage means less margin and a larger effect from each price move.

Liquidity

The volume available to trade at or near the current price. Thin liquidity means larger slippage.

Lot

The standard unit of position size. One standard lot is 100,000 units of the base currency.

Margin call

Notification that your margin level has fallen to a warning threshold. A prompt to act, not an automatic closure.

Margin level

Equity divided by used margin, expressed as a percentage. The figure that determines margin call and stop-out.

Negative balance protection

A regulatory protection preventing a retail account from falling below zero.

Pip

The standard smallest increment in a currency quote — the fourth decimal place for most pairs, the second for yen pairs.

Rollover

The daily point at which overnight financing is applied to open positions.

Slippage

The difference between the price requested and the price filled. It occurs in both directions.

Spread

The difference between bid and ask — the cost of opening a position before any commission.

Stop-out

Automatic closure of positions when the margin level falls below the permitted minimum.

Swap

The financing amount debited or credited overnight, reflecting the interest rate differential between the two currencies.