| Forex | Foreign Exchange |
| currency pairs | e.g. EUR/USD |
| cross currency pairs | pairs that don’t use the USD, e.g. EUR/GBP |
| financial instrument | currencies such as EUR/USD |
| EUR/USD | base currency |
| EUR/USD | quote currency |
| go long | buy (base currency up against the quote) |
| go short | sell (quote currency up against the base) |
| opening a position | buy or sell, go long or short |
| spread | difference between sell and buy rate |
| pip | smallest measured unit of a currency rate, usually in the 4th decimal place, e.g. $1.4521 |
| capital | amount of money deposited into trading account |
| leverage | control a large position in the market with a relatively small amount of capital |
| stop loss | predetermined loss price at which a position will be closed |
| take profit | predetermined profit price at which a position will be closed |
| bullish market | a market that will go up |
| bear market | a market that will go down |
| ask price (offer) | broker’s rate to buy (go long) a currency pair |
| bid price | broker’s rate to sell (go short) a currency pair |
| spread | difference between ask and bid price which goes to the broker |
| liquidity | a market can be less or more liquid, depending on frequency of trading and spread price |
| candlestick charts | used to track a currency pair’s price rise (green candle) and decline (red candle) |
| lots | currencies are traded in lots rather than singular units, i.e. standard, mini, micro and nano |
| resistance point | price levels a rising currency pair has trouble breaking |
| support level | price levels a falling currency doesn’t go below |
| risk to reward ratio (RRR) | compares the potential loss of a trade against its potential gain, e.g. risking 1 dollar to potentially earn $3 is a 1:3 ratio |