Glossary
Forex & brokerage terms, in plain English
44 key terms every broker, IB and prop firm should know — each linked to the relevant Forexty product or guide.
A-BookA risk model where the broker passes client trades through to a liquidity provider, earnin…AMLAnti-Money-Laundering — controls, screening and monitoring brokers apply to prevent financ…AffiliateA marketing partner paid (often via CPA) for driving sign-ups or funded clients to a broke…B-BookA risk model where the broker internalises client trades and takes the opposite side, keep…BridgeSoftware connecting a trading platform (e.g., MT5) to liquidity providers, handling order …CPACost Per Acquisition — a partner commission model paying a fixed amount per qualified, fun…ChallengeThe evaluation a trader must pass (profit target within drawdown/loss limits) to get funde…ChargebackA forced payment reversal initiated by a cardholder's bank. Brokers reduce chargebacks wit…Copy TradingLetting clients automatically mirror the trades of selected master traders. See Copy Tradi…Dealing DeskA broker desk that manages risk and may take the other side of trades (B-book), monitored …DrawdownThe peak-to-trough decline in account equity. A core risk metric, especially in prop firm …ECNElectronic Communication Network — an execution model matching orders against a pool of pa…EquityAn account's balance plus or minus the floating profit/loss of open positions — the real-t…Expert Advisor (EA)An automated trading program that runs on MetaTrader to execute a strategy. See Expert Adv…Forex CRMSoftware a brokerage uses to manage the full client lifecycle — lead capture, KYC, deposit…Introducing Broker (IB)A partner who refers clients to a brokerage in exchange for commission or rebates. Brokers…KYCKnow Your Customer — verifying client identity with documents before they trade or withdra…LeverageThe ratio that lets traders control a larger position with less capital (e.g., 1:100). Bro…Liquidity Provider (LP)An institution that supplies executable buy/sell prices to a broker. Multiple LPs are ofte…LotA standardised trade size. In forex, a standard lot is 100,000 units of the base currency;…MAMMulti-Account Manager — lets a manager trade many client accounts simultaneously with flex…MT4MetaTrader 4 — the long-standing forex/CFD trading platform, valued for simplicity and its…MT5MetaTrader 5 — the multi-asset successor to MT4 with more order types, faster backtesting …Manager APIThe MetaTrader administrative API a CRM uses to create accounts, manage groups, adjust lev…MarginThe capital required to open and maintain a leveraged position. Tracked in real time so po…Margin CallA warning issued when account equity falls below the required margin, prompting the trader…MarkupAdditional spread a broker adds on top of raw liquidity pricing as revenue, configurable p…Multi-TenantAn architecture letting one operator run multiple brands or brokerages from a single admin…Multi-level IBAn IB structure where partners earn from their own referred clients and from sub-IBs benea…PAMMPercentage Allocation Management Module — pooled funds a money manager trades, with profit…PEPPolitically Exposed Person — a higher-risk client category requiring enhanced due diligenc…PSPPayment Service Provider — a company that processes deposits and withdrawals (cards, bank,…PayoutThe profit share a funded prop trader withdraws. Automated and audited in the prop CRM.…PipThe smallest standard price increment for a currency pair (often the 4th decimal), used to…Prop FirmA proprietary trading firm that funds traders to trade its capital, usually after an evalu…RebateA per-trade or per-lot commission paid to IBs/affiliates based on the trading volume their…STPStraight-Through Processing — orders routed directly to liquidity without dealer intervent…SlippageThe difference between the expected and executed price of an order, common in fast markets…SpreadThe difference between the bid and ask price of an instrument — a core revenue source for …Stop OutAutomatic closure of positions when equity falls below the stop-out level, protecting both…SwapThe interest credited or debited for holding a leveraged position overnight, based on the …Trader's RoomThe branded client portal where traders register, complete KYC, fund accounts, withdraw, o…White LabelA model where a broker operates under its own brand on another provider's infrastructure. …cTraderA trading platform known for its modern interface and ECN-style execution, offered by many…