Forex Glossary

[barood4money]

Commodity trading is as simple as currency pair trading. Both are quite same. As commodity is not traded in pairs so it has less complication to understand. But it needs more research before trading.

 

[Decub]

Then I would say that so many people are just having a misconceptions of what or how commodity trading works because over times, I hear people complain about how complicated it is. That is even the major reason some are running away from it.

 

[amit.neogi]

The Foreign Exchange market has its own terminology which is normally used by all Forex brokers, investors and traders. Here is a brief list of the frequently used Forex terms and their meanings. Also besides terms, we provide you beneficial Hints For Forex Trading as well.

Ask Price/ Offer Price
The ask and offer price is the price at which the market is ready to trade a specific currency. This is the price where, an investor can purchase the base currency. When seeing a quote, it is located on the right side.
For example, in the quote EUR/USD 1.4547/52, the ask price is 1.4552.

Base currency
The currency listed first in a Currency Pair is known as the Base currency.

Bids
A Bid is the price at which the investor is willing to purchase a currency.

Bid/Ask Spread
Simply stating, Bid/Ask spread is the variation between the bid and offer price. It can also be defined as the degree of difference in pips, amid the buying price and the selling price of a currency pair.

Broker
A person or an organization acting as an agent, putting together buyers and sellers for a commission or fee, can be defined as a Broker. They are the ones who work on behalf of their investors.

Counter Currency
The currency listed second in a Currency Pair is known as the Counter currency.

Currency symbols
EUR - Euro
AUD - Australian Dollar
CAD - Canadian Dollar
CHF - Swiss Franc
JPY - Japanese Yen
GBP - British Pound

Day Trading
Day trading refers to the buying and selling of positions within a single day’s trade.

Foreign Exchange
Also known as Forex or FX, it is the process of buying of one currency in exchange of other currency in an over-the-counter market.

Leverage
Leverage is the ratio of the deposited amount to the amount that can be traded. Find out Importance of Forex Leverage

Limit order
Limit orders let the Forex investors stop further trading and leave the market at preset profit objectives. It is an order which restricts the greatest price to be paid or the lowest price to be received.

Liquidity
Liquidity can be defined as the capacity of a market to allow fat transaction with negligible impact on the price stability.

Margin
Margin is the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.

Pip / Point
When dealing in terms of quotes, prices are expressed in terms of Pips. Pips can be defined as “percentage in points” and are mostly the fourth decimal point i.e. 1/100th of 1%. A pip can also be defined as the smallest value at which an exchange of currency can take place.

Stop Loss Order
Stop/loss commands allow the investors to set an exit point for a loss. By limiting your losses to a pre set position, Stop/loss orders help investors control their risk conditions. 'Stop-loss' can lower an investor's exposure to risk by a large proportion.

Hi am a newbie am read you post realy its a very help full for all forex trader for a long time ever

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Commodity trading is as simple as currency pair trading. Both are quite same. As commodity is not traded in pairs so it has less complication to understand. But it needs more research before trading.

please explain that which type of research before forex trading and what is the primary stage should know about this

 

[Decub]

Hi am a newbie am read you post realy its a very help full for all forex trader for a long time ever

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It simply means that you should try to understand how commodity trading and in this case I think is more of metal trading works. Just like you did in currency trading by doing some brief research and understanding of pairs at least.

 

[Pettyeve]

I feel currency trading will be easier than commodities and also that traders will find it easier to adapt to pairs than metals or crude. This is because of the high spread and which requires higher capital. I may decide to try this kind of investment or trading option much later in life.

 

[riddick09]

Yes, for the simple traders they will see trading in pairs will be more comfortable and affordable to trade. Because, metals or commodities will require to have huge capital or huge margin to have survive in the high volatility of it. Pairs can have the major and exotic pairs which we prefer to have major ones.

 

[budado]

If we really want to learn how to earn good in forex trading we need to make sure that we know what we are doing and right now I do believe we can make big income in forex if we only know how to focus on wanting to earn more. The more we try to learn how to trade the more we can end up making good profit.

 

[Ruchibhar]

thank you very much for this detail information. it will help newbies a lot.

 

[budado]

Its really important that we know how to handle our account in here. I do believe we can really make some profit without any worries. I'm so happy that some how we can make something good with what we have in here and I do know we can really handle our account and make it big in here if we understand forex.

 

[barood4money]

Yes, for the simple traders they will see trading in pairs will be more comfortable and affordable to trade. Because, metals or commodities will require to have huge capital or huge margin to have survive in the high volatility of it. Pairs can have the major and exotic pairs which we prefer to have major ones.

Yes, you are right. To invest at metals and commodities you need good capital to earn good good profit. Whereas you can trade with minimum amount at currency pairs. Different traders prefer different sections.

 

[Decub]

Commodities are generally expensive to handle. Ranging from the huge capital requirement for starting up up to the spread fee. I also feel it is something that should be considered after some careful consideration of the currency pairs which capital wise, can easily be started by a newbie.

 

[Pettyeve]

Traders will run away from trading in gold because of the high spread fee. Gold is also a long term investment that needs a big trading capital and this will make some traders not to invest in it. Even big gold investors like Warren buffet is saying he will try to sell of part if his gold because the price ie not going high the way it used to.

 

[Svetlana Loboda]

Traders will run away from trading in gold because of the high spread fee. Gold is also a long term investment that needs a big trading capital and this will make some traders not to invest in it. Even big gold investors like Warren buffet is saying he will try to sell of part if his gold because the price ie not going high the way it used to.

But I think, Gold is more profitable than the general FX pairs; but no doubt it’s challenging! On the other hand, it requires longer SL since 50-100 pips movements are very common scenario here.

 

[LorrainMor]

Forex market is an over the counter market where people are enjoying private entrepreneurship opportunities by connected with internet enabled network. Traders are here with the intention of earning money. Majority of the traders are trying to make invest with their hard earned money. As a result, traders all will have the analogous yearning to append income to their current wealth arrangement. And to ensure so, a trader should be careful before start trading with any project.

 

[Svetlana Loboda]

Forex market is an over the counter market where people are enjoying private entrepreneurship opportunities by connected with internet enabled network. Traders are here with the intention of earning money. Majority of the traders are trying to make invest with their hard earned money. As a result, traders all will have the analogous yearning to append income to their current wealth arrangement. And to ensure so, a trader should be careful before start trading with any project.

Basically, making money is not easy here! But, being a consistent player is the challenging issue! Only good skilled Forex traders can do so! So I think, traders should go step by step according to their own result I mean live trading result.

 

[Oscar Shumack]

Forex traders have to be mentally bold enough so no sudden collapse can cause harm to traders. But we see many traders are mentally weak with low sustaining power.