21 Terms In Forex Trading That Beginner Traders Must Know

TipsSeo Trading – Terms In Forex Trading, If you are new to Forex, there will be many terms floating around that you may not be familiar with. For that as a beginner trader you must understand the terms in forex trading

Here are some definitions of words you will hear often when you trade on Forex.

 

  1. Terms In Forex Trading That BeginnerProfit or gain: The amount of money you earn after you close the trade.
  2. Principal value: The principal value or Amount of money you invest.
  3. Pip: A pip, or “price interest point,” is the smallest digit used in pricing.
  4. Open position or trade: This is the position you take when you buy or sell a currency pair.
  5. Order: You place an order when you want the broker to buy or sell your currency when it reaches a certain level.
  6. Support: A price point that previous data has proven to “support” the market, e.g. the price fell to this point and bounced again.
  7. Resistance: A price point that has been shown to “resist” the market, e.g. the price rose to this point and fell back again.
  8. Trend Line: A line drawn on a forex chart that shows whether a currency is consistently moving up or down. This one line was broken by the market, beware of trend reversal (i.e. upwards to downwards, downwards to upwards).
  9. Momentum: “Momentum” indicates the ability of a particular currency to move in either direction.
    Lot: A lot is a certain number of units or the amount of money received in Forex trading; Typically, lots are defined in multiples of 100.
  10. Loss: As a trader, you incur a loss if you close a trade at a lower level than when you opened it.
  11. Long: When you trade long, you are trading a currency that you assume will increase in price; this is usually a “buy” trade.
  12. Limit or Limit: You can place a limit on a trade so that you exit it once you get the expected number of pips.
  13. Gross domestic product or GDP: GDP basically shows how healthy a country is in terms of its economy. It is basically the national income and output for a given country, and is the main indicator when you are determining the health of a particular currency and therefore what you are going to trade.
  14. Fundamental analysis: Fundamental analysis is a “big picture” analysis used in Forex trading, used to determine the “health” of a particular currency. Fundamental analysis looks at a country’s political, social and economic health and stability, which largely determines how strong that country’s currency is as well.
  15. Technical Analysis: The practice of analyzing charts by itself. The chart forms a pattern that shows whether a
  16. currency will rise or fall in value. It is based on the premise that history repeats itself.
  17. Fed, or The Federal Reserve: This body regulates the United States financial industry. The Federal Open Market Committee regulates federal interest rates, among other things.
  18. Bull: The “bullish” point of view of a particular currency says that the belief is that its price will increase.
  19. Bear: The opposite of “bull.” In other words, a person believes that prices will fall; being “bearish” about a particular currency is the opposite of being “bullish” about a particular currency.
  20. Bid: The bid is the price you sell for, or the ask price (ask is synonymous with “bid”).
  21. Ask: Ask is the price you buy; demand is also known as supply.

Terms In Forex Trading That Beginner

Thus the article reviews of terms in forex trading that novice traders must know

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