The 26 most important terms in the world of forex tradingadmin - October 7, 2021
There is no trade without special terms, and this is how the forex trade is a global trade and has very many terms specific to trading operations and tools, and no beginner forex trader can be aware of them.
Why are forex terms important?
As a trader, you cannot carry out trading operations without finding these terms on your way, whether in the trading program, through news reports, or through the execution of deals, so you should not overlook them or underestimate them, and we will put for you the most important terms used in all trading operations in the forex market with definition and its explanation.
So what is the terminology of forex trading?
Below you will find 26 terms with their explanation, when we need them and how traders work with them:
1. Trading platform
First of all, you start your first steps in forex trading through a program or a trading platform, which is the free MetaTrader platform and is considered the most famous trading platform. Which shows you all the important and news reports you need, as well as all the currencies available for trading so that In the forex market there are major currencies and minor currencies.
2 . Major currencies
The euro – the yen – the Australian dollar – the Canadian dollar – the pound sterling – the Swiss franc All major currencies are traded against the US dollar.
3. Minor and cross coins
They are currencies where the dollar is not a common denominator.
4 . currency pairs
The trading system in the forex market is based on the pairs system, that is, you buy one pair in exchange for selling the other pair as an example for clarification EURUSD pair If the transaction is a purchase, you buy the first pair against the second pair, that is, you buy the euro against the dollar, But if the process of selling is the exact opposite, and this is the case with the rest of the pairs.
5. The point
It means the least change in price that can be seen in the price and a pip is the lowest change in price that is written at the end of the number.
BID PRICE 6. Purchase price
You will find this term in many of your transactions on the platform, and it means the purchase price of the pair or the proposed or desired financial unit.
Ask price 7. Selling price
It means the selling price of the pair or financial unit you desire.
SPREAD 8. THE DIFFERENCE
That is, the difference between the purchase price and the selling price, which is the amount of commission that the forex company or brokerage company takes.
Margin 9. Margin
It is the amount of money required on the trading account to maintain the open position.
Bear Market 10. Bear Market
It means that the state of the market is in decline and is witnessing a decline.
Bull Market 11. Bull Market
It means that the state of the market is in momentum and is witnessing an ascension.
Buy Limit Order 12. Buy Limit Order
It means a buy order placed by the trader at a specified price.
It is the standard size of a trading instrument. One contract in forex amounts to 100,000 units of currency.
Hedge 14. Coverage
It means to cover or hedge against potential risks in the market in the sense of opening positions opposite to another position.
Market Order 15. Market order
It means buying or selling at the quoted market price and not at a price specified by the trader.
Profit Taking 16. Profit Taking
It means closing the open position and taking the profit.
Risk Management 17. Risk Management
They are the methods, strategies, and all the tools that a trader uses to reduce risks and losses.
Stop Loss Order 18. Stop Loss Order
An order placed within the trading platform to close the losing position when the price reaches a predetermined level.
Technical Analysis 19. Technical Analysis
It is a well-known term that traders use to predict price movement by studying the market and past data using charts and trading indicators available in the trading platform.
Fundamental Analysis 20. Fundamental Analysis
It is an analysis based on economic and political events that affect prices in financial markets (such as interest rates and the unemployment rate).
Speculator .21 rackets
A trader who takes a lot of risk in trading, choosing high-risk instruments in the hope of making bigger profits.
Volatility.22 Market volatility
This term refers to the level of volatility of a particular currency pair that is being sold, bought, or any other financial asset.
Daily Chart .23 daily chart
It is a graph showing the movement of securities during the day.
Demo Account .24 Demo Account
It is an account with virtual money that gives the trader to experience the market, test his strategies and try out the company’s features before investing real money in the real account.
Leverage .25 leverage
It is the financial leverage in which forex companies compete, and it is considered one of the most important features that the trader is looking for, which is the purchasing power of the trader by giving him the possibility of depositing a small amount of money and trading in larger sizes, meaning that it is a percentage, where if it is 1:100 for example, the power is increased Buying per trader 100 times
And if it is 1:500, this means that the trader can buy with 500 times the capital deposited with the company, which is of course a great advantage, but it has great risks.
Forex Trading Robot .26 Forex Automated Trading
It is automated trading using the expert or the expert advisor based on the data that has been programmed on it and gives the best buying or selling opportunities.
These were the most important terms that any trader needs in the forex market and currencies in general.
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