A pip represents the fourth decimal place of most currency pairs, but there is an even smaller increment that prices can change. Going long simply means to buy, while going short means to sell. In equity markets, most traders are long in anticipation of rising prices.
- Forex Trading Glossary, FX Terminology, Currency Trading Terms?
- #1 Currency.
- Forex Terminology, Definitions and Slang With Free PDF;
- A Dictionary of Forex.
- THE FOREX DICTIONARY LTD - BE - Moerkerke ().
- A Dictionary of Forex | Foreign Exchange Market | Swap (Finance)?
However, in derivative markets, such as options and futures, there is always an equal number of longs and shorts in the market, because each new contract that is bought needs a corresponding seller who needs to go short, and vice-versa. Since retail Forex is mostly traded with CFDs , traders are able to bet both on rising prices and falling prices. Support and resistance are one of the most important concepts in technical analysis. Technical traders analyse only price-moves as they believe that the price reflects are available fundamental information, and support and resistance trading plays an important role in that analysis.
The markets are made of crowds of people that speculate, hedge, trade, invest or gamble in the markets.
Since people have memory, they remember certain price-levels where the price had difficulties to break below in the past. They place their buy orders around those levels, as they believe that the price will again fail to break below. This is how support levels are formed. In other words, a support level is a previous low at which the price has a large chance to retrace and move up. While support levels are based on previous lows, resistance levels track previous highs at which the price had difficulties to break above.
Traders remember those levels and place their sell orders around them, as they believe that those levels will again provide selling pressure and move the price down.
Uploaded by
Since fresh memory is more important than old memory, recent support and resistance levels usually have a higher importance than old support and resistance levels. The Forex market is open around the clock and offers traders to profit not only on rising prices, but also on falling ones. However, there is another reason why a large number of traders feel attracted to the Forex market — leverage.
Trading on leverage allows traders to open a much larger position size than their initial trading account size would otherwise allow, and the Forex market is known for extremely high leverage ratios offered by retail brokers. However, bear in mind that trading on extremely high leverage is very risky, as it boosts not only your profits, but also your losses.
Beginners should consider trading on a lower leverage until they gain enough experience and screen time. This will reduce losses and make sure that you stay in the game in the long run.
Glossary of Forex (Foreign Exchange) Terminology
Learn more, take our Trading for Beginners course 14 Margin When trading on leverage, your broker will allocate a portion of your trading account size as the collateral for the leveraged trade. The position size you take on the market determines the size of your profits and losses in dollar value by affecting the value of a single pip.
In the Forex market, one standard lot standard position size equals to Fortunately, traders with smaller account sizes can take smaller trades with mini-lots Some brokers even allow you to trade on nano-lots units of the base currency. In any case, calculate your lot size in dependence of the size of your stop-loss so that you remain inside your risk-management boundaries. So, you want to become a day trader and join the hundreds of thousands of day traders who are living in the UK? Then this…. Day trading is one of the most popular trading styles in the Forex market.
However, becoming a successful day trader involves a lot of blood,…. Want to day trade for a living?
Foreign Exchange (Forex)
Online trading allows you to trade on financial markets from the comfort of your home. All you need to start trading is a computer with…. If you trade, we can save you time and money… See how here! Next: Step 2 of 4. Phillip Konchar April 25, Get started in trading. For example. A leverage allows a trader to open a position that is a hundred time larger than their initial deposit. Learn more, take our Trading for Beginners course. Categories: Industry. Phillip Konchar. Related Articles.
Joe Bailey October 8, Phillip Konchar June 2, Phillip Konchar August 28, Gaps usually follow economic data or news announcements. Gearing also known as leverage Gearing refers to trading a notional value that is greater than the amount of capital a trader is required to hold in his or her trading account. It is expressed as a percentage or a fraction. Given Refers to a bid being hit or selling interest. Giving it up A technical level succumbs to a hard-fought battle.
#2 Currency pair
Going long The purchase of a stock, commodity or currency for investment or speculation — with the expectation of the price increasing. Going short The selling of a currency or product not owned by the seller — with the expectation of the price decreasing. Gold gold's relationship It is commonly accepted that gold moves in the opposite direction of the US dollar.
The long-term correlation coefficient is largely negative, but shorter-term correlations are less reliable. Gold certificate A certificate of ownership that gold investors use to purchase and sell the commodity instead of dealing with transfer and storage of the physical gold itself.
Gold contract The standard unit of trading gold is one contract which is equal to 10 troy ounces. Good for day An order that will expire at the end of the day if it is not filled. Good 'til cancelled order GTC An order to buy or sell at a specified price that remains open until filled or until the client cancels.
Good 'til date An order type that will expire on the date you choose, should it not be filled beforehand. Greenback Nickname for the US dollar. Gross domestic product GDP Total value of a country's output, income or expenditure produced within its physical borders. Gross national product Gross domestic product plus income earned from investment or work abroad. Guaranteed order An order type that protects a trader against the market gapping.
It guarantees to fill your order at the price asked. Guaranteed stop A stop-loss order guaranteed to close your position at a level you dictate, should the market move to or beyond that point. H Handle Every pips in the FX market starting with Hedge A position or combination of positions that reduces the risk of your primary position.
Forex Trading Glossary |
Hit the bid To sell at the current market bid. I Illiquid Little volume being traded in the market; a lack of liquidity often creates choppy market conditions. Illiquid Little volume being traded in the market; a lack of liquidity often creates choppy market conditions. IMM session am - pm New York. Industrial production Measures the total value of output produced by manufacturers, mines and utilities. This data tends to react quickly to the expansions and contractions of the business cycle and can act as a leading indicator of employment and personal income data.
Inflation An economic condition whereby prices for consumer goods rise, eroding purchasing power. Initial margin requirement The initial deposit of collateral required to enter into a position. Interbank rates The foreign exchange rates which large international banks quote to each other. Interest Adjustments in cash to reflect the effect of owing or receiving the notional amount of equity of a CFD position.
Intervention Action by a central bank to affect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates. Introducing broker A person or corporate entity which introduces accounts to a broker in return for a fee.