Trading basics

Leverage, margin, equity, stop outs, slippage. These are the words on a broker's account page, used as though everybody already knows them, and the one place they are never defined is the page where they decide what you pay and when your positions get closed for you.

Each guide here is written against the same hundred broker records the rest of this site is built from, so where a figure appears it is one we hold and you can check it two clicks away.

6 min readWhat is leverage in trading?Leverage does not change what a trade wins or loses. It changes how large a trade you are allowed to open - a different thing, and the reason accounts disappear in an afternoon.

5 min readMargin explained: the five numbers on your accountBalance, equity, used margin, free margin and margin level. Every leveraged platform shows all five, most traders watch one of them, and the one most people watch is the one that tells you least.

6 min readMargin calls and stop outsOne is a warning. The other is your broker closing your positions for you, at the worst possible moment, without asking. They are not the same threshold and they are not the same event.

5 min readWhat is negative balance protection?It stops a trading account from ending below zero and leaving you owing the broker. Whether you have it is not a question about your broker - it is a question about which of its companies opened your account.

6 min readWhat is slippage?The price you saw and the price you got are different. That is normal, it goes both ways, and how a broker handles the two directions tells you more than its advertised spread does.

6 min readMarket maker, ECN and STP brokersThree labels that sound like three business models. Across our hundred brokers they appear 138 times, because most firms are more than one of them - and which one you get can depend on the account you opened.