Basic trading terminology.
Ask Rate: The rate
at which a currency pair is offered to buy. (buy price)
Bid Rate: The rate at which a currency
pair is offered to sell . (sell price)
Capital: The
total sum of a traders portfolio.
Foreign exchange: The simultaneous buying of one currency and selling
of another.
Fundamental trader: One who executes trades based on economic forecasting
Hedge:
To reduce the risk of one security by taking an offsetting position in a related security.
Limit
order: A trade order set for any appointed time for closing or opening a trade.
Long position: Trade that anticipates for the market to rise (bullish
trade).
Margin: Collateral required for an investor to trade.
Margin call: When a broker calls all debts or requests additional funds to hold a
working position.
Market order: A trade order executed at current market price.
Pips: Digits
added to or subtracted from the fourth decimal place.
Position: The netted total holdings of
a given currency.
Resistance: Price levels where selling pressures strong enough to interrupt
a price advance.
Retail trader: Small capital investor.
Short position: Trade that anticipates
the market to fall. (bearish trade)
Smart money: Large capital investors with a high degree of insight in
the market.
Spread: The difference between
ask and bid price.
Spread cost: The amount it costs to execute a trade based upon the spread.
Stop loss: Protection order scheduled at a
certain price to liquidate a losing position.
Support: Price levels where buying pressures
were stronger than the selling pressures.
Technical analysis: A study of movements in the market based on charts and graphs.
Volatility: The degree of price fluctuation for
a given asset, rate, or index.
Volume: The amount of trading activity.
