As a beginner trader it is important for you to learn the basic commonly used terms in FOREX trading. The contents on this page will help you get familiarized, understand the meanings and ensure that you know what you are doing before you make a mistake.
Mistakes need to be avoided as it could lead to loss of money. If you cannot memorize them all at once, which is OK, you can always come back and refresh your memory.
You are welcome to print this page if you wish to do so. Learning the common FOREX terms is important before you start trading with a real trade account. Here are the commonly used terms in the FOREX market among traders.
Pip stands for percentage in point (or price interest point). It refers to a unit of change in an exchange rate of a currency pair. Most major currencies (but not all) are generally priced to four decimal places. A pip is one unit of the fourth decimal point. For dollar currencies this is to 1/100th of a cent.
Pips are your friend. If you’re making pips, you’re making money. Pip is a minimal measuring unit of one currency change relatively another reflected in quotes released by a broker.
Volume is used to measure the value of a market move.
Margin is the required pledge amount for opened positions equaling 1% (with 1:100 leverage) of the opened position size.
Free Margin are assets uncommitted to a pledge for opened positions.
Margin Level is account balance calculated in the following way: (Equity / Margin)*100%.
Base Currency is monetary unit of an account to be nominated in and that of balances, commissions and payments to be calculated.
Currency Rate is two currencies making an exchange rate come as trading operation object.
Currency Dealing is purchase and/or sale of currency assets in the world currency market with a purpose of deriving profit from rate fluctuations with the course of time.
Bulls is trade slang meaning traders playing for the currency rate upturn.
Bears in trade slang means traders operating with a currency downtrend.
Bull Market is a slang meaning the market is in Uptrend (going up).
Bear market, the opposite of Bull Market is a slang meaning a market with down-directed rate tendency.
Order is trader’s command to a broker of buying or selling one currency for another at current market price.
Equity is trading account balance reduced by a current loss of positions opened and increased by a current profit of positions opened.
Cross Rate is a ratio between two currency pairs relatively the third one (USD); exchange rate between two currencies, except for USD.
Trend Line is chart direct lines coming through maximum value of up-going and down-going trends determining the current tendency.
Written by Accura FX