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Here are some of the most common terms used in FOREX trading.
Price demand – sometimes called the offer price, this is the market price that traders buy currency. Demand prices are displayed on the right side of a quote – e.g. EUR/USD 1.1965 / 68 – means that one euro you can buy by 1.1968 dollars you
Bar chart – a type of graph used in technical analysis. Each time it division of time in the graphic is shows as a bar vertical that shows it following information-it part top of it bar is the price high, it part lower of it bar is the price low, it line horizontal to the left of the bar shows the price of opening and it line horizontal to it right of the bar shows the price of closing.
Base currency – it is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote currency (the second). For example, in the quote – USD/JPY 112.13 – U.S. dollar is the currency base, with 1 dollar of the United States using 112.13 Japanese yen.
Offer price – is the price a dealer can sell foreign currency. The price of offer is displayed in the side left of a quote-e.g. EUR / USD 1.1965 / 68-means that a euro is can sell by 1.1965 dollars you
Bid-ask range – it is the difference between the price of demand and offer in any currency quote price. The margin represents the broker fees and varies from one broker to another.
Broker-the intermediary between the buyer and the seller. Most stock brokers are associated with large financial institutions and earn money by setting the margin between supply and demand prices.
Candlestick chart – a type of graph used in technical analysis. Each division of time in the graph is shown as a candlestick – a red vertical bar or green with extensions above and below the body of the candlestick. The upper part of the extension shows the price higher for the division of the graph and the bottom of the extension shows the lowest price. Red candlestick indicates a lower than the opening price closing price, and green candlestick indicates that the price is going up.
Currency counter-a couple money that not includes dollars American-e.g. EUR / GBP.
Couple money-two currencies involved in a transaction FOREX-e.g. EUR / USD.
Economic indicator – a statistical report issued by the Government or academic institutions which indicate the economic conditions of a country.
First In First Out (FIFO) – refers to the order of open orders are settled. The first orders to be liquidated are first opened.
Market Forex (FOREX, FX) – at the same time the purchase of one currency and sale of another.
Fundamental analysis – analysis of the political and economic conditions that can affect currency prices.
Leverage or margin – the proportion of the value of a transaction to the required deposit. A common margin to trade in FOREX is 100:1 – can change the money worth 100 times the amount of your deposit.
Order limited – an order to buy or sell when the price reaches a specified level.
Lot – size of a FOREX transaction. Standard lots are worth around 100,000 U.S. dollars.
Main currency – The euro, German mark, the Swiss franc, the British pound and the Japanese yen are the major currencies.
Secondary currency – The Canadian dollar, Australian dollar and New Zealand dollar are the secondary currency.
One cancels the other (OCO) – two orders carried out simultaneously with the instructions to cancel the second order if the first is executed.
Open probes – an active trade which has not been closed.
Pips or points – the smallest unit of currency can be traded.
Quotation currency – the second currency in a currency pair. In the EUR/USD currency pair, the euro is the quote currency.
Rollover – The extension of the time of the establishment of the point is to the current delivery date. The cost of rollover (postponement) is calculated using shift points based on interest rate differentials.
Technical analysis – analysis of market historical data to predict future movements in the market.
Tick – the minimum price change.
Transaction cost – the cost of transaction of FOREX – typically the margin between supply and demand prices.
Volatility – A measure statistics indicating the trend of movements of prices sharp within a period of time.