Stop-loss
An order or planned exit level used to limit loss if a scenario is invalidated. It should account for volatility, spread and position size.
Trading glossary
Understand the essential terms before trading
A reference page to clarify Forex, stock-market, derivatives and risk-management vocabulary. Definitions are educational and are not investment recommendations.
Remember before using these concepts
A term understood on paper still needs to be checked in live conditions: contract size, currency, fees, trading hours, liquidity, margin and regulation for your broker entity.
Risk management
Risk/reward
The relationship between potential loss and potential gain in a plan. It helps compare scenarios, but does not guarantee the outcome.
Drawdown
A fall in capital or strategy equity from a previous high. Tracking drawdown helps size risk and avoid overexposure.
Margin
Capital set aside to open or maintain a leveraged position. Insufficient margin can trigger a margin call or forced liquidation.
Leverage
A mechanism that increases exposure compared with the capital posted. It also amplifies losses and must be handled carefully.
Forex & transaction costs
Pip
A price-movement unit commonly used in Forex pairs. Its value depends on the pair, lot size and account currency.
Lot
A standardised Forex position size. Depending on the broker, traders may use standard lots, mini lots, micro lots or fractional units.
Spread
The difference between bid and ask prices. It is an implicit cost that may widen during news, quiet periods or volatile markets.
Slippage
The difference between expected and executed price. It can be positive or negative, especially around gaps or high volatility.
Products & markets
CFD
A contract for difference that gives exposure to an asset without owning it directly. CFDs carry high risk, especially with leverage.
ETF
An exchange-traded fund that usually tracks an index, asset basket or strategy. Fees, currency and replication method should be checked.
Futures
Standardised exchange-traded contracts with expiry, contract size and specific margin rules. They require operational understanding.
Volatility
The amplitude of price movements. Higher volatility can create more movement but also increases risk, gaps and slippage.