Glossary

Trading glossary

Eight words. Explained without the Lamborghini.

PipOn 1 lot of EUR/USD, one pip is $10. On 0.01 lot, ten cents.Lot0.01 lot of gold is one ounce. A $10 move is $10.SpreadA 2-pip spread on 1 lot of EUR/USD costs $20 before the price has moved.LeverageAt 1:500, a 0.2% move against a full-size position empties the account.Margin1 lot of EUR/USD at 1.10 with 1:100 leverage locks $1,100.Stop lossA 50-pip stop on 0.10 lot of EUR/USD is a $50 loss. Not more.SwapHolding a trade for three weeks can cost more in swap than the spread did.DrawdownAfter a 50% drawdown you need +100% to get back to where you were.