A brief insight into general forex trading terms
There are several terms which you will find in forex trading & it is necessary to have proper knowledge of these terms so that the right decisions can be taken at in the right time. The next few sections will cover many of the significant forex terms so that you are more aware of the market as well as different foreign exchange transactions.
Useful Forex Terms
- Open Order: Open order is one form of order which executes if the forex market meets its designated price & that open order is normally linked to orders like the one known as Good Till Canceled.
- Premium: It refers to the net amount by which forward/future price amounts surpass the given spot prices.
- Price Transparency: It indicates quotes where every market participants get the same kind of access.
- Resistance: This term refers to one form of technical indicator for a defined price level for which traders normally sell.
- Roll Over: It is a common process by which settlement of deals gets rolled over to some future date. Expenses such process has rely on variations in interest rate of two given currencies.
- Short Position: It is a term referring to investment positions in which a forex trader profits from decline in market prices.
- Spot Price: This term indicates current market price & settlement of these spot contracts occurs within two days.
- Spot: It indicates cash price in any foreign exchange market but it does not consist of interest amount.
- Spread: This is the typical dissimilarity between bid and offer price plus it also means forex broker commission for each trade.
- Stop Loss Order: It means a kind of order where an open position is liquidated on its own if a specific price value is attained. Such orders are normally utilized to minimize exposure to losses where market is shifting opposite to investorӳ position.
- Support Levels: These are used in the form of indicators that stipulate that some currency cannot move below to certain point at a defined price level.
- Swap: It stands for purchase and also sale simultaneously of any fixed currency value for any particular forward exchange rate.
- Ticker: This term indicates current/recent currency record as tabular/graphic representation.
- Tomorrow Next: This is a kind of transaction in which currency sale/purchase takes place together or a transaction of purchase occurs with next day delivery decision.
- Two Way Price: This term is frequently used if bid and offer rates get quoted in connection to a forex transaction.
We see here that forex is quite large financial market having several terms getting utilized. If you seriously go through these above terms then it will be easy to stay more informed with regards to how the market is functioning.