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Forex Terminologies


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65 replies to this topic

#1
hexeduser

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I'm new in forex so there are lots and lots of terminologies or words commonly used in forex that I don't know or I have no idea what its all about. So far I only know of some common ones like the word "trade" and "currency" . I don't have any idea what other terms to actually take note of even the basic so can someone list some terms they know and its meaning.
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#2
Seyren

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Well there is a lot of forex terminologies like "appreciation" means is when a currency’s value grows stronger and Depreciation is a fall in the value of a currency.
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#3
hexeduser

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Forex is like learning economics then because so far they have the same terminologies to take note of and understand
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#4
Seyren

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yes you must have to understand every terminologies forex has for you to able to interact with the market more easily.. There are also some term that is hard to understand that's why we need to study it for further knowledge
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#5
hyippro

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I'm new in forex so there are lots and lots of terminologies or words commonly used in forex that I don't know or I have no idea what its all about. So far I only know of some common ones like the word "trade" and "currency" . I don't have any idea what other terms to actually take note of even the basic so can someone list some terms they know and its meaning.


Same question wth you man. Hope there is forex expert will share their knowledge here.
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#6
yogesh

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Here are few terms i feel useful about forex:
Forex or FX - is the simultaneous purchase or sale of one currency against the purchase or sale of another.
Spread - is the difference between the bid and offer prices for a currency pair.
Stop Loss Order - is an order in which an open position is automatically liquidated at a specific price, it is actually to minimise losses when market moves in the opposite to expectation.
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#7
omarelalfy

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Here are few terms i feel useful about forex:
Forex or FX - is the simultaneous purchase or sale of one currency against the purchase or sale of another.
Spread - is the difference between the bid and offer prices for a currency pair.
Stop Loss Order - is an order in which an open position is automatically liquidated at a specific price, it is actually to minimise losses when market moves in the opposite to expectation.
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#8
Droganan

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I did not know there were so many forex terminologies. I am glad I came to this thread and learned about them. Thanks everyone here for helping out newbies in the forex world. I hope with this new knowledge I will be moderately successful at understanding someone who has some experience with forex.
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#9
chuna

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I have an interesting offer for you. To gradually up grade yourself
in forex, you should visit www.babypips.com. Also register wit other forex forum to participate in discussing of forex terminologies.
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#10
chuna

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I did not know there were so many forex terminologies. I am glad I came to this thread and learned about them. Thanks everyone here for helping out newbies in the forex world. I hope with this new knowledge I will be moderately successful at understanding someone who has some experience with forex.


Of course they are many forex terminologies and even much more. Just like they are over 20 currency pairs to trade on in forex. It's just a vast trade with many integrated parts.
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#11
sirwilly

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TP or Take Profit: A level that is often pre-determined at which the terminal closes the trade position and takes in the pips that have been generated. TP is a very good risk management strategy and is ideal for beginners and experts alike.
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#12
ellliottt

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this must help you

Appreciation is when a currency’s value grows stronger.

Ask Rate is the rate at which a trader can buy a currency that is for sale.

Base Currency is the currency in which other currencies are quoted in a pair. Usually the U.S. dollar is considered the ‘Base Currency’.

Bear Market is a market in which prices are declining.

Bid/Ask Spread is the difference between the bid and offer price.

Big Figure is a term used by dealer and/or brokers. It refers to the first few digits of an exchange rate.

Broker is an individual/firm that bring buyers and sellers together for a fee/commission.

Bull Market is a market in which prices are rising.

Clearing is a term used to refer to a process of settling a trade.

Commission is the fee that is charged by a broker/dealer.

Confirmation is a document that states the terms of a transaction.

Contract is the standard unit of trading.

Cross Rate is the exchange rate between any two currencies that are not of the country in which the currency pair is quoted. For example, in the U.S., a GBP/JPY quote would be considered a Cross Rate. The same quote would not be a Cross Rate in either the U.K. or Japan.

Currency is a unit of exchange. Any form of money that has been issued by a government/central bank is a currency. Currencies are used as a medium of exchange, i.e. they are used as a basis for trades.

Day Trading are trades in which positions are opened and closed on the same day.

Dealer is an individual/firm that take one side of a position hoping to make a profit by closing out the position in a following trade with a different trader.

Depreciation is a fall in the value of a currency.

Foreign Exchange, Forex, FX is the simultaneous purchase or sale of one currency against the purchase or sale of another.

Forward is the predetermined and agreed upon exchange rate for the settling of a transaction at some agreed future date.

Fundamental Analysis is the analysis of economic and political information as it aims to determine future market movements.

Inflation is an economic condition in which the prices of goods rise, hence decreasing the purchasing power of consumers.

Initial Margin is the deposit given to a broker/dealer; it is the collateral required to enter into a position as a guarantee on future performance.

Limit Order is an order that sets restrictions on the amount of profit and loss it can make.

Liquidity is the ability of a market to accept large transaction without it impacting the stability of its prices.

Long Position is a position that increases in value in value if market prices increase.

Margin Call is when the broker/dealer request additional collateral to guarantee performance on a position that has moved against the investor.

Market Maker is a dealer who quotes both bid and ask prices, hence makes a two-sided market for any financial instrument.

Maturity is the date in which a financial instrument is expired or a transaction is settled.

Offer is the rate at which a dealer is willing to sell.

Open position is a deal that has not yet been settled with a physical payment.

Overnight Trading are trades in which positions remain open until the next day.

Pips/Points is one unit of price change in the bid/ask price of a currency. It is the last digit in a rate; the fourth decimal place in an exchange rate.

Position is the netted total holdings of a given currency.

Quote is an indicative market price, normally used for information purposes only and not for deals.

Rate is the price of one currency in terms of another.

Risk is an exposure to the chance of loss.

Roll-Over is a process in which the settlement of a transaction is pushed forward to another date.

Short Position is a position that increases in value if the market prices decrease.

Spread refers to the difference between the bid and offer prices for a currency pair.

Stop Loss Order is an order in which an open position is automatically liquidated at a specific price. Stop Loss Order minimized potential losses if the market moves in the opposite direction of the investor’s position.

Swap is the sale and purchase of a certain amount of a certain currency at a forward exchange rate.

Technical Analysis is an analysis of historical market trends in an effort to forecast future market movements.

Transaction Cost is the cost of making a financial transaction whether it is buying or selling.





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#13
Nikhil

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TP or Take Profit: A level that is often pre-determined at which the terminal closes the trade position and takes in the pips that have been generated. TP is a very good risk management strategy and is ideal for beginners and experts alike.

you are correct but with TP we also need put to SL which help us washout our account and its vey very necessary for newbie trader . i think if any trader always keep this mind then no doubt he/she will servive long time in forex market.
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#14
speedbus

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@ellliottt - thanks for that post ! it helped me a lot.. it was something like a Forex Dictionary ! Almost every term is listed there.. awesome ! Thanks :D
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#15
speedbus

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@ellliottt - thanks for that post ! it helped me a lot.. it was something like a Forex Dictionary ! Almost every forex trade term is listed there.. awesome ! Thanks :D
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#16
speedbus

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@ellliottt - thanks for that post ! it helped me a lot.. it was something like a Forex Dictionary ! Almost every forex trade term is listed there.. awesome ! Thanks :D
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#17
sirwilly

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Yes, it is important to have an SL as well. In fact, having a TP presumes the SL is already set. The SL is even the more important parameter so we do not end up blowing our deposit.
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#18
boniez

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but you must be paying attention if you want to put SL line, because if you make a misteke when analize the chart and probably it suddenlycan make the price float minus till touch your SL, so that's make your geeting close with margin call,
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#19
matiskater

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yeah there are many terms of the forex world that youll learn with time...actually if you love to read or just read very often, many if not all of these terms and words youll get to know even if you dont know forex at all, but just check out the defenitions and youll find it all there;)

regards,
matiskater
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#20
rage35

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I am an online earner but I haven't experience forex since I don't know how does the system works. I want to join the site but I don't know how to start and where to go. Talking about the terminologies, I have no idea about that. I am not an expert in this kind of field so I will just read some members tips and suggestions regarding about forex trading.
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