Quoting conventions:

If the quote is:  EUR/USD 1.1823 - 1.1826: we can sell 100,000 Euro for the exchange rate of 1.1823 ($ 118,230) and buy it for 1.1826 ($ 118,260) The bid price 1.1823 is what the market is willing to pay for 100,000 Euro and the asking price 1.1826 is what the market is offering 100,000 Euro at.

Pip (or points)

This is the smallest incremental move an exchange rate can make.

Currency pairs are quoted in four (4) decimal places.  A move from 1.0000 to 1.0001 is one-pip move. A pip is for most currencies 0.0001 of the exchange rate.   USD/JPY is an exception in which each pip is 0.01

 Lot

This is the unit to measure the quantity of the deal. Mini accounts normally use this term. Each lot is 10,000, but the 100k platform refers to a 100,000 trade size.

Spread

The difference between the bid and offer prices; Narrow spreads usually indicate high liquidity.

Liquid and Illiquid Markets

We speak of a liquid market when the market has many participants. The opposite is true when illiquidity exists.

Margin

A margin is the amount of money used for putting on a trade.

Margin Call

A margin calls happens when the market has moved adversely, i.e. the broker requests to add funds to the margin in order to maintain the trade that is in a trading loss.

Market order:

An order to buy or sell at the present market price

Limit order:

A limit order is placed when a trade has been put on. The limit order is usually a profit order, or in the event of no existing trade, the limit order represents a buy or sell order below or above the current market price. For example when we have bought EUR 100,000 at 1.1826 we can at the same time put on a profit order to sell EUR 100,000 at 1.1900.

Stop/loss order:

The stop-loss order is a protection order when a position has been taken. It is the maximum possible loss. After a stop-loss order is executed for the same position amount, the position is liquidated and the loss has been taken.

OCO order (one cancels the other)

Combination of a limit and stop/loss order. If one of the two has been executed, the other will be cancelled automatically.

GTC = Good till cancelled.   Order is active until it is cancelled by the trader.

Do = Day order, remains active until the end of the trading day.

Open Order

An order to buy or sell when a market moves to its designated price.

Open Position

Any deal which has not been settled by physical payment or reversed by an equal and opposite deal for the same value date.

Round trip

Buying and selling a specified amount of currency in order to open and close a position.

Bear Market

A market distinguished by a prolonged period of declining prices accompanied with widespread pessimism.

Bull Market

A market distinguished by a prolonged period of rising prices (opposite of bear market).

Cash Market

The cash market is the actual financial market on which a futures or option contracts are traded. There is a physical exchange of funds: therefore the term CASH.

Going Long

The purchase of a stock, commodity, or currency for investment or speculation.

Going Short

The selling of a currency or instrument not owned by the seller.

Hard Currency

 A currency whose value is expected to remain stable or increase relative to other currencies.

Hedge

An investment position or combination of positions that reduces the volatility of your portfolio value. One can take an offsetting position in a related security. Instruments used are varied and include forwards, futures, options, and combinations of them all.

Hedging

 A hedging transaction is one, which protects an asset or liability against an adverse move in the foreign exchange rate.

Structural Hedging

The process of reducing or eliminating currency exposure by matching receivables and payables in each currency or currency bloc to minimise the net exposure.

High/Low

Usually the highest traded price and the lowest traded price for the underlying instrument for the current trading day.

Leverage

 Facility whereby a small margin deposit can control a much larger total contract value, a mechanism, which determines the ability to make extraordinary, profits at the same time as keeping the risk capital to a minimum.

Limit Order

An order given, which has restrictions upon its execution. The client specifies a price and the order can be executed only at an equivalent or better price.

Liquid Assets

Assets that can be easily converted into cash. Examples: money market fund shares, US Treasury Bills, bank deposits, etc.

Liquidity

The ability of a market to accept large transaction with minimal to no impact on price.

Long Position

A position where the client has bought a currency he does not already own. Normally expressed in base currency terms, e.g. long US dollars (short Japanese Yen).