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The price quoted for immediate settlement on a commodity, a security or a currency. In the context of foreign exchange, it refers to the exchange rate at which a currency can be bought or sold for immediate delivery.

The agreed-upon exchange rate for a currency at a future date. Used in hedging and speculation, forward rates are not forecasts but are determined by the interest rate differential between the two currencies.

A fee paid or received for holding a position overnight in forex trading. It's determined by the difference in interest rates between the two currencies in the pair being traded.

A statistical measure of the dispersion of returns for a given security or market index. In forex, it refers to the amount of uncertainty or risk about the size of changes in a currency exchange rate.

A momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100 and is traditionally considered overbought when above 70 and oversold when below 30.

The process by which the monetary authority of a country controls the supply of money, aiming at promoting economic growth and stability. In forex, it directly affects currency valuation and is closely watched by traders.

The use of borrowed money to increase potential return on investment. In forex, it allows a trader to open a position with a value that is multiple times the amount of the capital they have.

The amount of capital required to open and maintain a leveraged position in the forex market. It is not a transaction cost, but a part of the account equity set aside and allocated as a margin deposit.

Refers to financial transactions not conducted on a formal exchange but rather through a dealer network. In forex, most trading is OTC, allowing for 24-hour trading and greater flexibility.

Representation of two currencies being traded against each other. For example, EUR/USD represents the value of the euro in terms of the US dollar.

The second currency in a currency pair in forex trading. It represents how much of this currency is required to purchase one unit of the base currency.

A tool used in technical analysis that is based on the idea that markets will retract a portion of a move before continuing in the original direction. The main Fibonacci levels are 23.6%, 38.2%, 50%, 61.8%, and 100%.

A strategy in which an investor borrows money at a low interest rate to invest in an asset that is likely to provide a higher rate of return. In forex, this typically involves borrowing a currency with a low-interest rate and investing in a currency with a high-interest rate.

The smallest price move that a given exchange rate can make based on market convention. In most currency pairs, a pip is 0.0001 of a rate.

The first currency listed in a forex pair that acts as the reference in the exchange rate calculation. The value of the base currency is always 1.

The difference between the price at which buyers are willing to purchase (bid) and the price at which sellers are willing to sell (ask). A tighter spread indicates a more liquid market.

The number of currency units bought or sold in a forex trade. Standard lot sizes typically contain 100,000 units of the base currency.

A statistical metric used to gauge the overall health of the economy. In forex, traders analyze economic indicators such as GDP, employment rates, and inflation to predict currency movements.

A currency pair that does not include the US dollar. Instead, these pairs involve two other major currencies. Examples include EUR/GBP and AUD/JPY.