SIMPLE ONLINE FOREX TERMS FOR THE BEGINNERS

LEVERAGE

In forex trade taking and managing  large position with the small capital is know as leverage. Brokers provide leverage to the traders that increase the potential gains and losses of the fund.

MARGIN

It is the amount of the money that traders need to open the positions, brokers provide the percentage of margin for the traders to open the position. Brokers provide the alerts to the brokers  if they  reach the margin level. When traders reach the margin level the open position is closing automatically. Margin level alerts occurs mostly  when the open positions are in loss, no trading will continue since the capital has capital within the brokers have reached below level

BID PRICE

Bid price is the point of price at which the market start to buy.

ASK PRICE

ask price is the point of price at which the market (broker) start to sell.

SPREAD

It is the distance between the bid price and ask price. Brokers with ECN accounts have tight spread. Spread sometimes increases during the news or when there is volatile in the market.

BUY

Buy sometimes it means going long, it is done when the traders anticipate the price of the currency pair will rising,

SELL

Sometime means going short, it is done when the traders anticipate the price of the currency pair will fall

PIP

Is the point at which the currency pair moves, these points differ from one currency to another. Currency like GOLD have high volatility tends to have high movements. These movements are calculated interms of the pips. It is calculated from the point in which the market (brokers) start to buy within the specific time frame. It can be calculated within the day or month depends on the decision of the traders

TAKE PROFIT

Is point  in which the trader execute trading after reaching the targeted point. It is executed when targeted point positions of traders are in profit.

STOP-LOSS

Is the point in which the open positions close due to the loss. When the open position run in loss and reach the target point it close automatically and then we call stop loss.

TAKE PROFIT

Is point  in which the trader execute trading after reaching the targeted point. It is executed when targeted point positions of traders are in profit.

STOP-LOSS

Is the point in which the open positions close due to the loss. When the open position run in loss and reach the target point it close automatically and then we call stop loss.

LIQUIDITY

is the ability of buying and selling of  the currency pair and it’s price remain unaffected.

CANDLESTICKS

Candlesticks are the charts that are shown within the trading platform. Sometimes is known as the language of the market. Traders uses these candlesticks pattern to identify buy and sell position of the market. There are different candlestick and it is used in different ways for trading, The common candlesticks are morning star, evening star, dragonfly and railway candlesticks

OPEN ORDER

This is a running trade that move either in profit or loss. When trader buy and sell a currency pair, the trader that is going on is an open order. The execution will be done of the targeted profit and loss have been taken.

MARKET STRATEGIES

These are the strategies that a traders uses in taking an order (open positions). Mostly common strategies are market maker (MM) strategy and price action strategy. Market maker consider much on the structure of the market. The market show M and W structure that indicate buy and sell. Within the market maker the trader also calculate the level of the market in which the the candlestick has shown. Mostly for currency pair it show three level until the market reaches the targeted point within the timeframe. For price action, the market play with the price from the previous position to the next position. In price action, the traders show the line that show the support and resistance in which the market will move. Mostly traders use price action for the long timeframe like day and month. Price action works effectively with long timeframe.