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Forex Terms That Forex Traders Should Know
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A forex investor should know the movements that he will make during trading, the discourses that he faces when analyzing. To win at Forex, you need to know this investment tool well and learn the forex language. Forex terms are so numerous that you can learn all this from forex dictionaries. But still, we have put forward the ones that you will encounter most of these terms, or the forex terms that you will use the most, and compiled them for you.

Abbreviations Of Currencies

If you are a forex investor, you should definitely know the abbreviations of currencies. Over time, you will learn the abbreviations of the currencies that you will follow to invest, but you must be sensitive about this. Each currency consists of 3 letter codes. With exceptions, currencies are identified by their initials. If we consider that forex is a global market, thinking about the initials in Turkish will create a misconception in the investor. USD (US dollar), JPY (Japanese yen), GBP (British Pound), CHF (Swiss Franc), AUD (Australian dollar) and CAD (Canadian dollar) are the main currencies.

Currency Definitions

Just as a forex investor understands currencies at a glance, he should also know the meaning of words used in foreign exchange transactions. Especially in basic and technical analysis, these definitions can be useful. For example, the first currency written in a currency pair is the base currency. For example, the base currency in EUR/USD is Euro. The second currency is the opposite currency. At EUR/USD, the opposite currency is the USD. Buying the base currency in a currency pair and selling the opposite currency is a long position. In contrast to this situation, the movement will be defined as a short position.

Bear market: a market situation in which prices depreciate. Sales are strong and prices quickly depreciate.

Bull market: a term used to express in a general sense that prices are expected to rise in the markets. It is called markets where purchases are strong and prices are rapidly gaining value.

Other Concepts Popular In Forex

Margin: the basic term of forex. It is the name given to the amount that must be present in the account in order to open a transaction and continue an existing transaction.

Leverage: the most powerful advantage of the Forex market. It is the first feature that everyone who enters the Forex market learns. Leverage offers the possibility to invest more with less capital. A position is taken with a certain amount of amount and an amount greater than that amount.

Pip: it is one of the most common terms in the Forex markets. Because it will be in question for every investment you make. Pip is a word that symbolizes the slightest change in the value of an investment. The decrease in investment of 1.10 to 1.09 is called 0.1 pips.

Parity: means the value of one country's currency against another country's currency. It is traded as shown as EUR/USD, which refers to the exchange rate of two different values.

Spread: the Spread rate can also be encountered by defining the exchange rate difference or exchange rate scissors. It is the difference that the brokerage firm determines between buying and selling when providing any investment vehicle to your service. In other words, it is the distance between buying and selling in currency pairs. Remember that a low spread rate is always an advantage for you.

Scalping: what is Scalping? we can answer his question as the investor's favorite Trading Method. If we need to explain more theoretically, scalping is a feature used in markets that aims to profit from small price movements. Scalping investors often try to generate income by trading with small profits.

Hedging( hedging): Forex is one of the ways that comes to mind when it is called hedging. Hedging is a method of locking a profit or loss situation by opening a transaction in the opposite direction of the same size as an existing position. For example, when we have 10 long positions at EUR/USD, we are hedging if we take 10 short positions at EUR/USD without closing our position.
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