Pip value is the smallest unit that a foreign currency can trade at. It is like the penny in the United States. That's the tiniest unit of currency that may be traded for commodities and services in the U.S. In the EUR/USD, a pip is worth .0001. So a shift from .8939 to .8940 is one pip.
Lots are the amount or dollar amounts of a currency that can be traded. Normal currency lots are sold in $100,000 increments. So if you were to buy 2 lots you would be buying $200,000 of a particular foreign currency.
Bid/Ask Spread will be the difference between the purchase price to buy and the cost to sell. The Forex is unique in that there are no commissions or fees when making a trade. The person who is making the trades only makes money on the difference between the Bid and Ask price.
Bear market is defined as the market or trend declining or within a downward path.
Bull market is the alternative to a bear market. Prices are rising or in an upward trend.
Day Trading is where positions or trades are opened and closed on the exact day.
Foreign Exchange, Forex, FX is the acquisition of 1 currency against the purchase or sale of a 2nd currency.
Limit Order sets price limits and when a trade is bought or sold, this is designed to limit the possible loss as the order is exited. It can also be used when entering the trade where the person sets the purchase price they're willing to pay to enter the trade. The example could be each time a car is bought, the dealer really wants to get a particular price but the client will only purchase the vehicle if the cost could be lowered to a certain level.
Spread will be the difference between the bid/ask price.
Stop/Loss Order is an open position where the individual wants to get out of that trade at a specific point. It can be utilized to guard profits which have already been made or to prevent large losses if the market goes against the trade. Example, I own a home which is worth $250,000, I put a stop/loss on my house a $230,000. Which means if the purchase price of my house goes below $230,000 I want to put it on the market for sale. This does not guarantee that I will sell my house for $230,000, but it will be in the market. The difference in currency trading is that it's soo liquid, which implies that no matter whether the price is moving up or down there will always be buyers and sellers.
The Forex is a highly liquid market, which makes the idea to make profits very attractive. Most trades in the FX are short-term trades only lasting a couple of days.
These are a few of the terms associated with the Forex. These are the main terms that ought to be understood. Forex automatic trading robots will take virtually all of the guesswork out of constructing trades. They really simplify the process. When you finally are comfortable with the basic understanding of the FX, I would recommend purchasing software forex to increase your profit potential.
Lots are the amount or dollar amounts of a currency that can be traded. Normal currency lots are sold in $100,000 increments. So if you were to buy 2 lots you would be buying $200,000 of a particular foreign currency.
Bid/Ask Spread will be the difference between the purchase price to buy and the cost to sell. The Forex is unique in that there are no commissions or fees when making a trade. The person who is making the trades only makes money on the difference between the Bid and Ask price.
Bear market is defined as the market or trend declining or within a downward path.
Bull market is the alternative to a bear market. Prices are rising or in an upward trend.
Day Trading is where positions or trades are opened and closed on the exact day.
Foreign Exchange, Forex, FX is the acquisition of 1 currency against the purchase or sale of a 2nd currency.
Limit Order sets price limits and when a trade is bought or sold, this is designed to limit the possible loss as the order is exited. It can also be used when entering the trade where the person sets the purchase price they're willing to pay to enter the trade. The example could be each time a car is bought, the dealer really wants to get a particular price but the client will only purchase the vehicle if the cost could be lowered to a certain level.
Spread will be the difference between the bid/ask price.
Stop/Loss Order is an open position where the individual wants to get out of that trade at a specific point. It can be utilized to guard profits which have already been made or to prevent large losses if the market goes against the trade. Example, I own a home which is worth $250,000, I put a stop/loss on my house a $230,000. Which means if the purchase price of my house goes below $230,000 I want to put it on the market for sale. This does not guarantee that I will sell my house for $230,000, but it will be in the market. The difference in currency trading is that it's soo liquid, which implies that no matter whether the price is moving up or down there will always be buyers and sellers.
The Forex is a highly liquid market, which makes the idea to make profits very attractive. Most trades in the FX are short-term trades only lasting a couple of days.
These are a few of the terms associated with the Forex. These are the main terms that ought to be understood. Forex automatic trading robots will take virtually all of the guesswork out of constructing trades. They really simplify the process. When you finally are comfortable with the basic understanding of the FX, I would recommend purchasing software forex to increase your profit potential.
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