Forex Millionaires System
Forex Millionaires System
Forex Millionaires System
   Home | Forex Millionaires System-DTS | Articles | Video Training | Brokers | Forex Millionaires System Preview | Testimonials | Affiliates


Article 1Article 2 Article 3Article 4 Article 5Article 6 | Archive 

Understanding Forex Jargons


One of the major frustrations of Forex traders is the awful lots of jargons. Googling those terms does not seem to help either because the explanations are more often than not, contain other jargons. This article explains five common technical terms used in Forex trading in layman language.

Quote: Forex trading is always done in pairs and thus a currency is always quoted relative to another currency, e.g. USD/JPY, EUR/USD, AUD/GBP. A quote would look like this: USD/JPY = 100.00. The currency on the left (in this case, US dollar) is known as the “base currency” and always equal to 1 unit, whereas the currency on the right (in this case, Japanese Yen) is called the quote or counter currency. A quote is how much worth one unit of the base currency, hence this particular quote means that USD 1 can purchase 100.00 Japanses Yen.

Pip: stands for “percentage in point” which is the smallest increment of trade in Forex. Prices in Forex market are always quoted to the fourth decimal place, except Japanese Yen; e.g. when EUR/USD rises from 1.5200 to 1.5201, it rises by 1 pip. For Japanese Yen, 1 pip is equivalent to 0.01 (two decimal places). Most currency pairs trade between 100 – 150 pips daily.

Bid / Ask: In Forex, to bid means “to buy” whereas “to ask” means “to sell”. The quote on the left is the bid (buy) price while the quote on the right is the ask (sell) price, and bidding price is always lower than the asking price. The base currency would be the one in which the transaction would be conducted.

Let’s look at the example, EUR/USD 1.2600/02. To sell this currency pair means to sell the base currency, i.e. the EURO. The market would buy your 1 EURO base currency with 1.2600 USD. On the contrary, to buy 1 EURO, you need 1.2602 

Spread: is the difference between the ask price and the bid price. Using the same example as above, the spread was 2 pips, which you automatically pay to your broker at every trade.

Margin: The minimum amount of money required to place a trade with a broker. You can trade as long as your account has this minimum amount, otherwise your accounts would be closed down.

Understanding the terminologies would definitely boost your confidence in trading and discuss your trade with other traders without sounding like a total novice!

 Understanding Forex Jargons

Get your free

Forex Trading Secret
Strategy Video Here

Making Money From Forex is not difficult at all. I will show you in your free Video a Magic Strategy that could Successfully Make you 100-800 Pips Per Trade.

You will also get free Email-Course on Forex Trading Basics.

Simply Enter Your Information below to get instant free access to
your gift

Forex strategy video - Meta trader template - Forex training course

Enter Your Email Address

Highly Recommended Forex Money Making System 


Articles
What is Forex?
Forex trading Importance
Forex Market! Main Types of Orders
Forex Trading Advantage
Why Trade in Currency Market?
Brokers! How to choose the right Forex Brokers?


© Copyright 2013 Forex Millionaires System
All Worldwide Right Reserved
No portion of this website's graphic or text may be reproduced without written permission