Terms in Forex Trading that Traders Must Know
Do you want to become a Trader in Forex trading? Check out the following terms in Forex Trading that novice traders must know.
Terms in Forex Trading That Traders Must Know
Forex or an abbreviation of foreign exchange which is a place of activity by trading a foreign exchange value from one country to another.
Where now forex has become one way to get money quickly and provide a large enough profit.
Well, this time we will provide terms that exist and are often used in forex trading activities in the world. Because these terms can help you understand more quickly in learning forex trading.
In fact, these terms must be known and understood for traders who are still beginners. Where by knowing it and understanding it, learning forex trading will be more focused.
Come on, get acquainted with some of the terms found in the following forex trading.
Terms in Forex Trading
The following are terms that often appear in the world of forex trading, it is mandatory for you to understand and memorize them:
Trader: a person or party who carries out buying and selling transaction activities.
Profit: the profit you get from trading results whether you want to buy or sell.
Loss: the loss you receive from the results is sometimes due to an analysis error or even less thorough.
Deposit: an activity to fill the balance in the account to be able to transact.
Withdraw: withdraw or withdraw the balance from a broker account to be transferred to your own account.
Broker: a person or individual in the form of an institution, company or agent, where as a suggestion to bring together the buyer and seller.
Leverage: the use of traders’ own funds and borrowed funds used to increase returns or profits. In short it is a trader who borrows funds from his broker.
Equity : the final total amount of your trading results when all orders are closed.
Spread: the difference between the buying price and the selling price. Well, with this spread the brokers get the benefits, where the smaller the spread value, the better for trading.
Balance: the amount of money that is in your trader’s account and can be traded or withdrawn.
Buy: a trader’s decision when the value of a pair increases or points strengthens, it will take a buy.
Buy Stop: a pending order when the price moves up to touch the point you set earlier. With a buy stop it will immediately open a transaction position in the form of a buy and the installation of this pending order has a price above the current moving one.
Buy Limit: serves as an order order if there is a value from the graph that is inversely proportional where initially the direction is down to up. When applying this buy limit, it is installed when the value of the currency pair decreases.
Sell: an open decision from the trader when the value of the currency pair decreases in points, it will take a sell.
Sell Stop: a pending order when the price moves down to touch the point you previously set. With a sell stop it will immediately open a transaction position in the form of a sell and the installation of this pending order has a price below the current moving one.
Sell Limit: with this it has a function as an order order if there is a value from the graph that is inversely proportional where the initial direction goes up to down. When applying this sell limit, it is installed while the value of the currency pair is rising.
Stop Loss: the limit of the lowest price value set to limit your losses. Where when the price movement touches the value and the open order that has been installed a stop loss will be closed automatically by the system. This is to minimize the loss that has been borne by you is not too big.
Take Profit: the limit of the highest price value that has been set to limit profits. Where when price movements touch the value and open orders that have been placed, take profit will be closed automatically by the system. This serves as a profit that has been targeted to be immediately obtained by you.
Roll Over/Swap: overnight interest generally roll over/swap is generally charged if the open order passes one day. Usually what is charged from this swap is a trader who does long trading up to 1 day or 2 days and so on. This overninght interest is based on the difference in the central bank interest rates of each traded.
Margin: a term used in the financial world to indicate a guarantee that has been placed for the holders of a sell or buy position in forex trading. Where to have a futures contract that is useful for protecting credit risk from offsetting partners.
Margin Call: a condition where your remaining balance or the balance used is insufficient to withstand market movements. If the transaction suffers a loss then you will experience a margin call.
Transaction Terminal: an application that is used to make buying and selling transactions, generally in the form of Meta Trader. The most widely used and popular MT are MT5, MT4 and so on.
Introduce Broker: company, individual or person who introduces also directs clients to make forex transactions.
Risk Management: a methodology for managing uncertainty which is closely related to threats in a series of trading activities including: lot volume, calculation of loss and profit and others.
Rebate: cashback from the spread that has been paid by the trader to the broker. This rebate is usually obtained if there is a prospective client/trader who registers through this introduce broker or IB. However, if the client does not register via IB, the cashback is not valid.
Well, that’s an explanation of what terms are used in the world of Forex Trading. You must know forex trading, its advantages and risks.
Before diving into the realm of forex trading, it would be nice for you to really understand the terms that exist in Forex Trading above. Good luck.
