Essential Forex & CFD Terms at a Glance

New to trading? This glossary will help you understand key financial terms commonly used in the Forex and CFD markets. Master the basics and trade with clarity.

🔹 Key Terms:

  • Ask Price – The lowest price at which a seller is willing to sell a currency pair.

  • Bid Price – The highest price a buyer is willing to pay for a currency pair.

  • Spread – The difference between the bid and ask price.

  • Leverage – The ability to control a large position with a small amount of capital.

  • Margin – The amount of funds required to open or maintain a position.

  • Pip – The smallest unit of price movement in a currency pair.

  • Stop Loss – A predefined level where a trade automatically closes to prevent further loss.

  • Take Profit – A set level where a trade closes once a desired profit is reached.

  • CFD (Contract for Difference) – A financial instrument that allows traders to speculate on asset price movements without owning the asset.

  • Lot Size – The standardized quantity of a trading instrument (e.g., standard, mini, or micro).