PipThe standard unit of price movement in forex, usually the fourth decimal place of a quote. If EUR/USD moves from 1.0916 to 1.0917, that's one pip. LotA unit of position size. A standard lot is 100,000 units of the base currency; mini lots (10,000) and micro lots (1,000) let traders size smaller. LeverageBorrowed exposure that lets you control a large position with a small deposit. 30:1 leverage means £1,000 controls £30,000 - magnifying both gains and losses. MarginThe deposit a broker requires to open a leveraged position. It's collateral, not a cost, and is returned when the position closes. SpreadThe difference between the bid (sell) and ask (buy) price. It's effectively the broker's fee, paid on every trade. Bid / AskThe bid is the price you can sell at; the ask is the price you can buy at. The ask is always slightly higher - the gap is the spread. Long / ShortGoing long means buying, expecting the price to rise. Going short means selling first, expecting it to fall. Forex lets you profit either way. Stop-lossA pre-set order that closes a losing trade at a defined price, capping the loss. Trading without one is the fastest way to blow an account. Take-profitA pre-set order that closes a trade once it reaches a target price, locking in the gain automatically. Currency pairTwo currencies quoted against each other, like GBP/USD. The first is the base, the second is the quote currency. Risk-to-rewardThe ratio between what you risk and what you aim to make. A 2:1 ratio means risking one to make two, so you can be profitable while winning under half your trades. Position sizingCalculating how large a trade to place so that hitting your stop-loss costs exactly your fixed risk amount. Size is derived from the stop, never guessed. DrawdownThe peak-to-trough fall in an account's value. Managing drawdown - not predicting the market - is what keeps traders solvent. SlippageThe difference between the price you expected and the price you actually got, common in fast or thin markets. LiquidityHow easily an asset can be bought or sold without moving its price. Forex's major pairs are among the most liquid markets in the world. VolatilityHow much and how quickly a price moves. Higher volatility means bigger opportunities and bigger risks.