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Bid Price

The bid price represents the highest price a buyer is willing to pay for a security, commodity, or currency at a given moment in the market. It reflects the demand side of the market and is crucial for determining the potential selling price of an asset.

Ask Price

The ask price, also known as the offer price, is the lowest price at which a seller is willing to sell a security, commodity, or currency in the market. It signifies the supply side of the market and serves as a reference for potential buyers to make purchasing decisions.

Spread

The spread refers to the difference between the bid price and the ask price of a financial instrument. It represents the transaction cost incurred by traders and serves as a measure of liquidity and market efficiency. A narrower spread typically indicates a more liquid market.

Leverage

Leverage allows traders to control a larger position in the market with a relatively smaller amount of capital. It amplifies both potential profits and losses, as traders borrow funds to increase their exposure to financial assets. While leverage can magnify gains, it also heightens risk and requires careful risk management.

Margin

Margin is the collateral required by brokers from traders to open and maintain positions in the market. It represents a percentage of the total value of the position and ensures that traders have sufficient funds to cover potential losses. Margin trading enables traders to amplify their purchasing power and engage in larger transactions.

Volume

Volume refers to the total number of shares, contracts, or units of security traded during a specific period in the market. It indicates the level of activity and liquidity in the market, with higher volume typically associated with increased liquidity and price movement.

Stop Loss Order

A stop-loss order is a risk management tool used by traders to limit potential losses on a trade. It specifies a price at which a position will automatically be liquidated to prevent further losses beyond a predetermined threshold. Stop-loss orders help traders protect their capital and manage risk in volatile markets.

Take Profit Order

A take-profit order is a trading instruction that specifies a price at which a trader wishes to close a position to realize profits. It allows traders to lock in gains by automatically selling a security when it reaches a predetermined target price. Take-profit orders help traders capitalize on favourable market movements and manage their trading strategies.

Point in Percentage (PiP)

A pip is a standardized unit of measurement used in the forex market to quantify changes in the exchange rate of currency pairs. It represents the smallest price movement that a currency exchange rate can make, typically equivalent to one one-hundredth of a percent. Pips are crucial for calculating profits, losses, and spreads in forex trading.

Contract of Difference (CFD)

(CFD) is a derivative financial instrument that allows traders to speculate on the price movements of underlying assets without owning them outright. CFDs enable traders to profit from both rising and falling markets by entering into contracts with brokers based on the price difference between the opening and closing prices of an asset.