What the broker will sell it for
ASK price
What the broker will buy it for
BID price
The difference between the bid and the ask
Spread
Unit of measurement for the spread
Pip
Having a dealing desk means the broker offers
Fixed spreads
Disadvantage of fixed spread
Requotes
Is the ASK price higher or lower than the BID price?
Higher
What is the base currency?
EUR/USD = 1.2345/1.2347
EUR
What is the quote currency?
EUR/USD = 1.2345/1.2347
USD
What is the bid price?
EUR/USD = 1.2345/1.2347
1.2345
What is the ask price?
EUR/USD = 1.2345/1.2347
1.2347
What is the spread?
EUR/USD = 1.2345/1.2347
2 pips
What is the transaction cost?
The spread
This allows traders to control a larger position in the market with a smaller amount of capital and is often expressed as a ratio.
Leverage
This type of order is executed immediately
Market order
This type of order allows you to buy or sell at a specific price or better
Limit order
This type of order allows you to limit your losses in case the market moves against you
Stop order
This type of order allows you to capture more profit if your trade runs long but also provides protection when the market moves against you
Trailing stop order
Size of a standard lot
100,000 units
Size of mini lot
10,000 units
Size of micro lot
1,000 units
Size of nano lot
100 units
