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FX TermsWhen you are activen in FX trading, you want to be sure that you understand the foreign currency (FX) language. Here's a short list of the most important words. Click on the links for a brief description: Ask Price | AussieBase Currency | Bear | Bid Price | Bull | Buy Price Cable | Counter Currency | Cross Rate | Currency Pair Day Trading Fed | Forex | Fundamental Analysis Hedging Kiwi Leverage | Long Position | Loonie | Lot Margin Offer Price Pip | Pip Currency | Point | Price Trend Quote Currency Rate | Risk Capital Sell Price | Short Position | Spread | Stop Loss | Swissy Take Profit | Technical Analysis Virtual Balance As these are extremely brief explanantions, you may want to refer to the links that point at Wikipedia, there you will find even more detailed infos.
The ask price is the price at which traders can buy the base currency. If you think that the EUR (Euro) value will increase then you can choose to buy it for USD (USDollar) at the price displayed in the ask quote. (the opposite is the Bid Price)
Dealer slang for the AUD/USD currency pair - Australian Dollar / USDollar.
The base currency is the first currency listed in any currency pair. Its value is determined against the counter currency’s value. For example, if the rate of the EUR/USD pair is 1.3525, then the EUR (Euro) is the base currency and it is worth 1.3525 USD.
Bear Market A Bear market is a pessimistic market with declining prices. (the opposite is the Bull)
The bid price (left quote display) is the price at which traders can sell the base currency. If you think that the EUR (Euro) value will decrease then you can choose to sell it for USD (USDollar) at the price displayed in the bid quote.
Bull Market A Bull market is an optimistic market with rising prices. (the opposite is the Bear market)
See Ask Price
Also known as Sterling. Dealer slang for the GPB/USD currency pair - Britsh Pound Sterling / USDollar.
The counter currency is the second currency in any currency pair. Its value is determined against the base currency’s value. For example, in the following currency pair EUR/USD, the counter currency is USD (USDollar).
A price quote consisting of any currency quoted against a currency that is not the USD (USDollar). The quote is made up of the individual exchange rates of the two currencies against the USD.
The two currencies that the exchange rate is comprised of. One of the currencies is bought, and the other is sold at the same time.
The practice of opening and closing positions within the same trading day, so that at the end of the day the trader has no open positions.
The Fed is short for Federal Reserve, which is the central banking system of the United States. The Fed issues announcements regarding U.S. monetary policy which can have significant effect on the Forex market.
Forex, or FX, stands for Foreign Exchange. Forex is the simultaneous buying of one currency and selling of another. Since you purchase money with money, there are two transactions (buying and selling) happening at the same time.
This type of analysis focuses on the macroeconomic factors that influence the value of a country’s currency. Traders open positions based on how they think changes in these factors are bound to affect different economies. Fundamental Analysis at Wikipedia
The practice of opening several positions at once where one position minimizes the risk of another position.
Dealer slang for the NZD/USD currency pair - New Zealand Dollar / USDollar.
Leverage is a loan from your broker, which enables you to trade with a small amount of capital. It can increase your potential profit, but it can also increase your risk.
Going long means opening a position in which the trader buys currency in hopes that this currency’s value will increase (buy low, sell high).
Dealer slang for the USD/CAD currency pair - USDollar / Canadian Dollar.
The standard unit of trading. One standard lot equals 100,000 units of the base currency, a mini lot equals 10,000 units, and a micro lot equals 1,000 units. eToro’s standard trade volume is the mini lot, i.e. 10,000 units.
The minimal cash deposit that you have to put up for the transaction. Trading forex on margin increases your buying power, but it can also increase your losses.
See Ask Price
Pip is the smallest price increment in the last digit in the rate – usually the fourth digit after the decimal point (apart from the USD/JPY - USDollar / Japanese Yen).
See Counter Currency
See Pip
A consistent movement of currency prices in a certain direction. Traders try to spot trends in order to capitalize on their potential.
See Counter Currency
Rate or quote, is the price of one currency in terms of another.
The amount of money that a trader can afford to risk, the potential loss of which would not affect their lifestyle.
See Bid Price
Going short means opening a position in which the trader sells currency in hopes that this currency’s value will decrease (sell high, buy low).
The spread is the difference between the bid price and the ask price.
A trade order which automatically closes an open position at a specific price in order to prevent losses in case the market moves against your position.
Dealer slang for the USD/CHF currency pair - USDollar / Swiss Franc.
A trade order which automatically closes an open position at a specific price realizing a specific amount of profit. Use this order to realize your gains.
This type of analysis focuses on chart patterns of currency movements. It assumes that a currency’s future movements can be predicted by looking at past behavior. Technical Analysis at Wikipedia
Your current potential account balance that can be realized by closing all your open trades. For example, if your actual account balance is $525 and you have an open trade for $50 with a $25 profit, your virtual account balance will show $600.
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Home Currency Exchange Rates Today FX Trading
Trading in the Foreign Exchange market might
carry potential rewards, but also potential risks.
You must be aware of the risks and be willing to accept them in order to trade in the foreign exchange market.
Don't trade with money you can't afford to lose.