Trading glossary
Short explanations of the terms that come up all the time in trade ideas and in MetaTrader 5.
Price and costs
- Pip: the smallest usual price move, the fourth decimal place on most currency pairs
- Spread: the gap between buying and selling price
- Slippage: the difference between the requested and the actual fill price
- Commission: the broker's fee per traded lot
Size
- Lot: the trading unit in MT5; 1 lot EURUSD equals 100,000 euros
- Contract size: how much of the underlying one lot contains at your broker
- Leverage: the ratio between position value and the collateral posted (margin)
Orders
- Market order: immediately at the current price
- Limit order: entry at a better price once it is reached
- Stop order: entry once a price is crossed in the trend direction
- Stop-loss: price at which a position is closed at a loss
- Take-profit: price at which a position is closed at a profit
Management
- Stop to breakeven: moving the stop-loss to the entry price
- Partial position: part of an overall position, for example one per take-profit
- Drawdown: decline of the account from its peak
- Daily limit: a limit on profit or loss within one trading day