Plain-English, original definitions for forex, XAUUSD, risk management, and prop-firm terms — each with an example, a tool, and a lesson. Educational content only.
A pip is the smallest standard step a currency pair's price normally moves in.
→A lot is the standard package of currency units you buy or sell in one trade.
→The spread is the difference between the price you can buy at (ask) and the price you can sell at (bid).
→Pivot points are price levels calculated from the previous period's high, low, and close to project likely support and resistance for the current session.
→A swap, or rollover, is the interest adjustment applied when you hold a position past the daily market close.
→Leverage is borrowed exposure that lets a small amount of your own money control a much larger position.
→Margin is the portion of your account a broker sets aside as a good-faith deposit to keep a leveraged position open.
→Lot size is the volume of a single trade, and choosing it correctly is the core of risk management.
→Position size is how much exposure you take on a single trade, calculated from the loss you are prepared to accept rather than from how confident you feel.
→A stop loss is an order that automatically closes a trade once price reaches a level you choose, capping how much a single trade can cost you.
→A take profit is an order that automatically closes a trade in profit once price reaches a target you set in advance.
→The risk-reward ratio compares the money you risk on a trade (your stop loss) to the money you aim to make (your target).
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