The Forex research glossary.

These definitions support the research guides and the cost calculator. They describe general mechanics rather than terms guaranteed by every provider. The exact contract specification and agreement take precedence for an account.

Account currency

The currency used to value an account and report its cash balance. A charge originating in another currency may need conversion. Compare costs in the same account currency.

Ask

A quoted price at which a buyer can purchase the base currency or contract, subject to the provider’s execution terms. It is usually above the bid.

Base currency

The first currency in a pair. In EUR/USD, EUR is the base. A size of 10,000 base units means 10,000 EUR in a straightforward units-based example.

Bid

A quoted price at which a seller can sell the base currency or contract. A chart may display bid prices even when a buy order executes against the ask.

CFD

A contract for difference is a derivative based on a price change, rather than ownership of the underlying asset. Terms, financing and protections depend on the product and jurisdiction.

Client classification

The legal category applied to a client, such as retail or professional. Classification can affect protections; it is not simply a label for experience or an upgraded service tier.

Commission

A separately stated transaction charge. Its unit, currency, minimum and whether it is per side or round trip are all necessary to calculate it correctly.

Contract size

The quantity represented by one contract or lot. The word “one” on an order ticket is incomplete without this specification. Check the precise instrument and platform.

Equity

An account value that includes unrealised gains or losses, as defined by the provider. It can differ from the cash balance and changes as open positions are revalued.

Financing

A holding charge or credit calculated under the provider’s schedule. Rate direction, calculation basis, funding boundary, settlement days and currency conversion all matter.

Firm reference number

An identifier used in FCA records. A valid number alone does not authenticate a website or caller because a clone can copy it. Match official permissions and contact details.

Legal entity

The particular company in the account agreement. A global brand may operate through several legal entities with different products, jurisdictions and terms.

Leverage

A relationship between exposure and supporting capital or margin. State the denominator: maximum contractual leverage and an account’s exposure-to-equity ratio answer different questions.

Lot

A size convention that must be checked against the instrument. Our calculator assumes 100,000 base currency units per standard lot for its commission calculation.

Margin

An amount required to support exposure under the provider’s terms. It is distinct from market value, account equity and the potential economic loss on a position.

Pip

A conventional price increment. This site’s supported Forex examples use 0.0001 for non-JPY quote pairs and 0.01 for JPY quote pairs. A fractional price point is not necessarily a full pip.

Pip value

The monetary value of one pip for a stated size. Base units multiplied by pip size gives a quote-currency amount, which can then be converted into account currency.

Quote currency

The second currency in a pair. EUR/USD quotes USD per EUR. A rate used to convert a USD pip value to GBP should be GBP per USD, not its reciprocal.

Round trip

An opening and closing transaction considered together. A per-side commission usually needs both sides counted, while the standard unchanged-spread approximation counts one complete spread.

Slippage

The difference between a requested or expected execution price and the actual fill. It can change realised cost; a modelled spread is not a guarantee of a fill.

Spread

The difference between bid and ask prices. A minimum spread, a time-weighted average and a spread observed at one moment are different measurements.

Stop order

An order triggered under specified conditions. Unless a relevant guarantee applies, the execution price can differ from the chosen level in a fast or gapped market.