Technical concepts

30 answers

Pip, spread, lot, leverage, margin, swap, equity — definitions with worked numerical examples.

  1. 01What is a pip and how much is it worth in EUR/USD?
  2. 02Fixed or variable spread — which one to choose on Forex?
  3. 03Leverage 1:500 — why it is a trap, not an opportunity
  4. 04What is a Forex swap and when does it work in your favour?
  5. 05What is 1:30 leverage and why did ESMA introduce it?
  6. 06What are standard, mini and micro lots in Forex?
  7. 07Margin call vs stop out — what is the difference?
  8. 08Slippage in forex — what it is and how to limit it
  9. 09Leverage vs margin — the difference and how they connect
  10. 10Stop loss vs take profit — when to use which?
  11. 11Price gap explained — what it is and will a stop loss stop it?
  12. 12Long vs short — buying and selling on forex explained
  13. 13How trailing stop works and when it kills your profit
  14. 14Equity, balance and margin — three numbers on a trader account
  15. 15Floating P/L vs realized P/L — what does it mean?
  16. 16Pip value per pair — why it is not always 10 dollars
  17. 17Liquidity on the forex market — what it is and why it matters
  18. 18Forex as an OTC market — what it means for the retail investor
  19. 19What is a requote and how is it different from slippage?
  20. 20Spot settlement T+2 and position rollover — where swap comes from
  21. 21Why is the swap charged triple on Wednesday?
  22. 22Major, minor and exotic pairs — how they differ
  23. 23Trader abbreviations glossary — SL, TP, BE, R:R and the rest
  24. 24What is break-even and how to move your stop-loss to BE?
  25. 25ETF vs CFD and forex — owning an asset vs a contract for difference
  26. 26My swap changed mid-trade — why, and is that allowed?
  27. 27Who sets swap rates and why they differ between brokers
  28. 28Bid and ask — which price triggers your stop-loss and take-profit?
  29. 29Why is my profit less than price move times position size?
  30. 30Forex order types — market, limit, stop, OCO and trailing