These are in my opinion the most used 50 terms, which should every good trader know: 1. 1. Ask price - is the price where the market will sell a specific currency pair from you 2. Bid price - is the price where the market will buy a specific currency pair from you 3. Spread - is the difference between ask and bid price, varies from brokers, used for determining commissions. 4. Pip - is the smallest movement in the market, 1 pip for EUR/USD = 0.0001, for yen pairs it is 0.01 5. Exchange rate - the value of one currency expressed in terms of the other. If for example USDJPY is 111. 5, then 1 dollar is worth 111.5 yens. 6. Leverage - allows you to get to the position greater than your account is. For instance if trader has 1 dollar and leverage is 200:1, he can leverage his position 200 times - he can trade 200 $ in total. The other 199$ are covered by bank or broker. 7. Margin - is the deposit required to open ...
Forex trading analysis, tips, tricks, guidance and much more, all written by passionate trader, who is in this business for about 2 years.