Forex is fast, global and full of opportunities – but if you don’t speak the language, you’re already back. It is not about bending the technical terms or to memorize definitions. This is about understanding what matters so that you don’t get lost before your first trade is still open.
Whether you go solo or sign up with a Forex prop companyKnowing that the basic terms are not optional – it is the value of the entrance.
So let’s cut the fluff and break what the beginners really need to understand.
Pips, lots and leverage – the basics
Puppies
A pip (short for the “percentage at the point”) is the smallest value a pair of coins can make. Most of the time, this is the fourth decimal decimal place.
Example:
If EUR/USD is moved from 1,1050 to 1,1055, this is a 5 pips motion.
Because it matters: Pips are how you count wins and losses. Every strategy, every trade – all boils until the PIP movement.
Host
There is a lot of the way in which commercial transactions are measured. You have three main types:
- Standard batch = 100,000 units
- Mini batch = 10,000 units
- Micro Lot = 1,000 units
If you are negotiating with a forex prop, the chances are that they will magnify your transactions in lots – so you have comfortable with what the numbers really mean.
Leverage
This is where forex becomes strong – and dangerous. Leverage allows you to control a large position with a small amount of capital.
Example:
By leverage 100: 1, a $ 1,000 deposit can control the $ 100,000 currency.
It sounds great, right? But remember: Leverage reinforces profits and losses. It’s a tool, not a shortcut.
Get to know your orders – or do not transactions
The “purchase” or “sale” button is not enough. You need to know how to create a trade – and how to protect yourself.
Market
Immediate execution. You get the next available price. Great for speed, not always great for precision.
Limit the order
You can tell the platform, “buy/sell only if the price hits this level.” Good for planning your entries.
Stop
Set it. Always. This automatically closes your trade when the market moves against you by a certain amount. It’s how you stay in the game.
Earn
The opposite of an attitude loss. It closes your trade when you hit a predetermined victory target. It helps you walk away with money before the market turns.
Bottom Line: If you don’t know how to adjust attitudes and goals, you are not trading – you are gambling.
Spreads, slip and cut the broker
You do not negotiate in a vacuum. Every platform and every broker have a cost – even if you don’t see it right away.
Spreading
The spread is the difference between the bid and the price (buy). Brokers make money in this gap.
Tight spreads = good
Wide spreads = you pay more only to enter and go out
Pay attention. Spreads are expanded during the flying times – or when your broker is not so competitive.
Slide
Beat the “buy” but the market is moving before the order is filled. This price difference? This is the slip – and can eat quickly in profits.
Is happening. Especially around big news. The key is to manage it, not pretend to do not exist.
Commission
Some brokers offer “zero supplies” transactions. It sounds great – but they usually do it in spread. Others charge a flat fee per trade.
There is no free lunch. Know what you pay and produce it in your strategy.
Marginal calls, withdrawals and real danger
This is where the new traders are burning. They think it’s exactly for wins – but risk management is the game.
Margin
The amount of money your broker puts you aside to keep your trade open. If the balance of your account falls too low, you will get…
Call margin
This happens when the broker says to you: “Add more money or we close your positions.” It is not a proposal.
Avoid using low leverage and adjusting tight stop losses. Once your rest is gone, it’s too late.
Withdrawal
A withdrawal is the difference between your account’s peak balance and its lower point after a series of losses.
Every trader experiences drawdowns. What matters is how you handle them.
- Do you adjust the size of the position?
- Are you excessive to come back?
- Do you learn anything?
Watch your withdrawals. They tell you more about your transaction style than your wins.
Forex prop firms and trader jargon
Let’s talk about Forex Prop companies for a second.
These are companies that give you access to funds if you can prove that you can exchange responsibly. To pass their evaluation, follow their danger rules and be funded. Just theoretically, hard in practice.
Why does this matter to terminology:
You will hear a lot of language specific from the business:
- Challenge = The test phase where you prove your strategy works
- Max dressdown = the maximum loss you are allowed before failing to challenge
- Profit target = the minimum profit required to pass
- Scaling Plan = How your funding increases if you remain profitable
Promotion companies expect you to know your things – not just what to click, but what it means. If you are targeting real capital commerce, learn Lingo first.
Learn the language and then play the game
Forex is not complicated – but it is accurate. And if you do not know the terminology, you will lose the signals, fall for tricks and misunderstand what the market tells you.
Here’s the takeaaway:
- Get to know your pips, a lot and your leverage – this is your institution.
- The main types of orders and always use attitudes – this is your defense.
- Understand spreads, slip and cost – this is controlling your reality.
- Watch your withdrawals – this is your durability.
- And if you go with a forex prop, talk to their language – so you’ll be funded.
The negotiation is not just about moves. This is the realization of documented movements.
Start there – and everything else becomes easier.