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David_Warner

Understand basic forex terminology

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  • The type of currency you are spending, or getting rid of, is the base currency.The currency that you are purchasing is called quote currency. In forex trading, you sell one currency to purchase another.

The exchange rate tells you how much you have to spend in quote currency to purchase base currency.

long position means that you want to buy the base currency and sell the quote currency. In our example above, you would want to sell U.S. dollars to purchase British pounds.

short position means that you want to buy quote currency and sell base currency. In other words, you would sell British pounds and purchase U.S. dollars.

The bid price is the price at which your broker is willing to buy base currency in exchange for quote currency. The bid is the best price at which you are willing to sell your quote currency on the market.

The ask price, or the offer price, is the price at which your broker will sell base currency in exchange for quote currency. The ask price is the best available price at which you are willing to buy from the market.

spread is the difference between the bid price and the ask price.

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That is good. Knowing Forex terminologies is good because when you understand basic things about Forex, you will not be thrown up and down in any manner by certain tutors or skill acquisition sites. That is also the main reason why it is in it's own important to take the basic knowledge about Forex so serious because it is the first step to success.

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That is good. Knowing Forex terminologies is good because when you understand basic things about Forex, you will not be thrown up and down in any manner by certain tutors or skill acquisition sites. That is also the main reason why it is in it's own important to take the basic knowledge about Forex so serious because it is the first step to success.

But knowledge without experience is useless, you won't make profit from that knowledge unless you are the one who can speak very well and might want to create a product or guide or even a seminar for people who interest in foreign exchange. As for basic terminologies understanding, a trader will be able to discuss with someone who has experience without much problem.

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A choice represents an agreement that gives its buyer the right, yet not the commitment, to buy or sell a fundamental resource a stock, a ware, a currency pair, or a record at a price at the very latest a specific date. It is an agreement with carefully characterized terms and properties. A choice is essentially an agreement firmly related to the basic resource. Thus, choices are called subsidiary instruments, which implies that they get their incentive from the estimation of the hidden base resource.

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Before you begin, it is advisable to familiarize yourself with their description, after which the trading process will become more understandable and simple for you.

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