Important Trading Terms

In forex trading, currency pairs are always quoted with two prices, the bid and the ask.

These prices reflect what buyers are willing to pay and what sellers are asking for.

The ask price is the rate at which a broker or liquidity provider is willing to sell a currency, shown on the right-hand side of a quote.

📌 Example:
If EUR/USD is quoted at 1.1400/1.1402, the ask price is 1.1402, which is what you'd pay when buying euros. The bid price is the rate a broker or buyer is offering to purchase a currency, shown on the left-hand side of the quote.

In the same example, the bid price is 1.1400, which is what you'd receive when selling euros. The spread is the difference between the bid and ask prices (Ask - Bid).

A narrow spread typically indicates high liquidity and active trading.

Even though your trades take place in a simulated trading environment, the platform mimics live market price action, so the bid and ask behave just as they would in real-time trading.

Slippage happens when a trade is executed at a different price than you intended, usually due to rapid market movements or execution delays.

It is most likely to occur during times of high market volatility, like during major economic announcements, or periods of low liquidity, such as right after markets open or during off-hours.

Example:
If you're trading EUR/USD and set a Take Profit at 1.1000, but it's filled at 1.0995 due to sudden price movement, that 5-pip difference is slippage.

Similarly, if your Stop Loss is set at 1.1050 but closes at 1.1055, the loss is slightly larger than intended. Slippage can be positive (better price) or negative (worse price).

Although you're trading in a demo or simulated environment, it's built to reflect live market behavior, including realistic slippage.

A swap, sometimes referred to as overnight interest or a rollover fee, is a charge or credit applied when a trade remains open past the trading day's end, based on the interest rate difference between the two currencies in a pair.

If you're holding a position in a currency with a higher interest rate, you may receive a payment; if it's a lower-yielding currency, you may be charged a fee.

A triple swap is a larger rollover fee or credit applied on Wednesdays to cover the weekend period when the forex market is closed but interest continues to accrue, effectively covering Friday, Saturday, and Sunday.

The rollover period is the daily moment, typically around midnight server time, when the trading platform shifts open trades into the next trading day and applies swap charges. During this time, spreads may widen due to reduced liquidity and uncertainty.

Although you're trading in a demo environment, the platform is designed to replicate real-world market behavior, including swap charges, triple swaps, and spread fluctuations during the rollover period.

Margin is the amount of funds required in your account to open and hold a trade, acting as collateral that your broker locks in to cover potential losses. It's not a fee but a portion of your account set aside while the trade is active, depending on the trade size and leverage used.

Leverage allows you to trade with more money than you have, shown as a ratio like 50:1 or 100:1. For instance, with 100:1 leverage, you can control a $100,000 trade using just $1,000, but it increases both profit potential and risk.

Equity represents the current value of your trading account, including any profits or losses from open trades: Equity = Account Balance + Unrealized (Floating) P/L. If open trades are profitable, equity exceeds the balance; if losing, it drops below.

Although you're in a simulated trading environment, margin use, leveraged positions, and equity updates function as they do in real markets.

In forex trading, the spread is the difference between the buying price (ask) and the selling price (bid) of a currency pair, measured in pips, which are the smallest standard unit of price movement.

Example:
If EUR/USD is quoted as Bid: 1.1400, Ask: 1.1405, the spread is 5 pips, meaning the market must move at least 5 pips in your favor before your position turns profitable.

A tighter spread means lower trading costs, while a wider spread increases costs.

Spreads adjust based on market conditions: volatile markets, like during news releases, often see wider spreads; low liquidity periods, such as holidays or off-hours, can also increase spreads; and during the rollover period, spreads often widen due to reduced activity.

Even in a practice or demo environment, our trading system mirrors real market behavior, including how spreads expand and contract based on current conditions.