15 Forex Trading Terms that Beginner Traders MUST Know

Publikel.com –Forex Trading Terms that Beginner Traders MUST Know, Actually, there are so many forex trading words that many traders may not understand what they imply, even if they have been trading for a long time.

However, there are key forex trading terminologies that new traders should be familiar with. Why? Because these phrases emerge frequently when engaging in forex trading operations.

So, if you are a new trader, you should read this article completely to grasp the meaning of the terminologies used in forex trading.

Frequently Used Forex Trading Terms Glossary

Understanding the definitions of these forex trading terminology would tremendously aid traders in their forex trading activity.

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1. Bid and Ask Prices

The ask price is the price at which a trader will purchase a certain currency pair. While the bid price is the price position that traders are prepared to sell for a certain currency pair.

These two prices may be seen on the trading platform’s display, for example, Meta Trader 4.

The Ask price is commonly shown by a red horizontal line on the Meta Trader 4 trading platform. The Bid price is shown by a gray horizontal line.

2. Positive and Negative

The phrase bullish refers to forex market conditions in which the price of a currency pair is rising. Bullish market circumstances are distinguished by even higher higher highs and lower lower lows.

In a bullish market, traders believe that the price will increase higher than it is presently, prompting them to enter long or purchase positions.

Furthermore, the phrase bearish refers to forex market situations in which currency prices are falling. Lower higher highs and lower higher positions describe bearish market circumstances.

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3. Candlestick

A candlestick chart, also known as a candlestick chart, is a form of price chart used in technical analysis that depicts the high, low, open, and close prices of an asset during a particular time period.

4. Currency Pairs

Currency Pairs are quotations of two separate currencies in which the value of one is quoted against the value of the other. A quotation in this context is an offer to purchase or sell a currency.

5. Reduced loss

Cut loss is the act of manually ending a trading transaction that is incurring a loss or loss. Cut loss is done so that traders do not incur more losses.

6. Hedging vs. Locking

Hedging or locking is a circumstance in which a trader establishes Buy and Sell positions at the same time without closing either of them.

Hedging is typically used to protect a trader’s profit or loss. As a result, the trader’s profit or loss will not grow under hedging conditions.

7. Use leverage

The leverage offered by the broker to the trader allows the trader to undertake trade operations with minimal money in order to take greater positions in the forex market.

In other words, leverage is loaned cash from brokers to traders in order to boost traders’ purchasing power in the goal of increasing earnings.

8. Long and short sentences

Long or purchase refers to purchasing a currency pair in the FX market. While shorting or selling a currency pair in the forex market is a word that refers to the sale of a currency pair.

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9.Use leverage

The leverage offered by the broker to the trader allows the trader to undertake trade operations with minimal money in order to take greater positions in the forex market.

In other words, leverage is loaned cash from brokers to traders in order to boost traders’ purchasing power in the goal of increasing earnings.

10. Long and short sentences

Long or purchase refers to purchasing a currency pair in the FX market. While shorting or selling a currency pair in the forex market is a word that refers to the sale of a currency pair.

11. Margin Call

Margin call occurs in forex trading when the margin level reaches a specific level or threshold.

When the threshold is reached, your trading account is put in jeopardy. Because it is possible that some or all of your trading positions will be terminated or liquidated forcefully.

In other words, the trader may lose all of the money in his trading account during a Margin Call.

12. Pip

PIP stands for Percentage in Point, or as others name it, Price Interest Point. PIP is a unit of measurement used to track changes in exchange rates between two currencies.

Forex currency pairings are quoted in pip terms. A pip is one tenth of a percent, which is 0.0001 or the fourth decimal point in practical terms.

13. Support and Opposition

Price levels of support and resistance are used by traders to evaluate if the price will change direction or continue.

In this scenario, support is a level region that has the capacity to survive price decreases due to increasing demand for assets. In other words, the support level is a zone where Buy transactions can be made.

While resistance is a level that has the ability to limit price increases. In other words, the resistance level is a zone for short-term trades.

14. Demand and Supply

Currency pair price movements in the forex market are influenced by supply or supply and demand or demand.

In this situation, supply refers to the number of assets available at a given moment. Whereas Demand is the number of assets required at the same moment.

15. Spreads

The spread is the difference between the selling price (bid) and the purchasing price (ask), also known as sell quotes and buy quotations.

Spreads can be minor or huge depending on the currency pair being traded, the time of day the deal was done, and the economic conditions.

Because spread is one source of income for brokers, the size of spread may also be determined by the forex broker.