Words every new trader should know
- Long (buy) — you profit if price rises.
- Short (sell) — you profit if price falls (common in CFD/forex).
- Pip / tick / point — smallest usual price increment (varies by instrument).
- Spread — difference between buy and sell price; a trading cost.
- Leverage — controlling a larger position with smaller margin (amplifies risk).
- Stop-loss — order to exit if price moves against you by a set amount.
- Take-profit — order to exit at a target price.
Example
If EUR/USD moves from 1.0850 to 1.0860, that is a 10 pip move on most brokers (fourth decimal place). Your profit in account currency depends on position size — covered in Module 4.
Keep a personal glossary. Consistent vocabulary reduces mistakes when placing orders.