Forex trading FAQ

What is a swap-free account?

A trading account where no overnight interest (swap) is charged on positions.

What is slippage?

The difference between the expected price of a trade and the price at which it is executed.

What is a lot in trading?

The standard unit size of a trade (e.g., 1 lot = 100,000 units of currency).

What is a pip?

The smallest price movement in a currency pair, usually 0.0001 for most pairs.

What is a stop-loss order?

An order to close a trade automatically at a specified price to limit losses.

What is a take-profit order?

An order to close a trade automatically at a specified price to secure profits.

What is margin?

The amount of money required to open a leveraged position.

What is margin call?

A margin call occurs when your trading account no longer has enough funds (margin) to support your open positions.

What is stop-out?

A Stop-Out is the automatic closure of your open trades by the broker when your account equity falls to a critical low level.

What is lot size?

Lot size refers to the volume (size) of a trade you place in the market.

What is the difference between Market Order and Pending Order?

A Market Order is executed instantly at the current market price, while a Pending Order is placed to be executed automatically at a specific price you choose in the future.

How many types of Pending Orders exist?

There are 4 types of Pending Orders in trading:

• Buy Limit – Buy at a lower price than the current market price
• Sell Limit – Sell at a higher price than the current market price
• Buy Stop – Buy at a higher price (anticipating a breakout)
• Sell Stop – Sell at a lower price (anticipating a breakout)

What is Trailing Stop?

A Trailing Stop is a type of stop-loss order that automatically moves with the market price to lock in profits while limiting losses.

How to calculate the required margin?

The required margin is the amount of money needed to open a trade, based on your lot size and leverage.

Required Margin = (Lot Size × Contract Size) ÷ Leverage

What is a market order?

An order to buy or sell immediately at the current market price.

What is a pending order?

An order set to execute at a specific price in the future.

What is spread?

The difference between the buy (ask) and sell (bid) price of an instrument.

What is equity in a trading account?

The total value of your account, including unrealised profits or losses.