Online Forex Trading Course

Online Forex Trading Course: Common Forex Trading Terms The Forex trading market is an around-the-clock cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The purpose of this article is to give you an introduction to common Forex trading terms and their definitions. Ask Price: The ask price is the price you can buy at. Base Currency: The currency to the left of the / in a Forex quote is the base currency. Its value is always 1. In the Forex quote, EUR/USD = 1.3489, EUR is the base currency. Bid/Ask Spread: The bid/ask spread or simply spread is the "distance" between the bid and ask prices. This spread is usually expressed in pips. Bid Price: The bid price is the price you can sell at. Counter Currency: The currency to the right of the / in a Forex quote is the counter currency. In the Forex quote, EUR/USD = 1.3489, USD is the counter currency. Forex Deal: The purchase or sale of a currency. Forex Quote: Forex quotes are always expressed in pairs. In the following example, your "pair" of currencies are the U.S. Dollar (USD) and the Euro (EUR). The Forex quote, EUR/USD = 1.3489, means that one Euro is equal to 1.3489 U.S. dollars. Fundamental Analysis: A fundamental analysis uses economic and political factors, such as housing starts, the unemployment rate, or inflation, as a means of predicting currency movements. Fundamental analysis is concerned with the reasons for currency movements. Long Position: A long position is a market position that appreciates in value if the market price increases. Lot: 1 lot is equal to 100,000 units of the base. Likewise, 2 lots are equal to 200,000 units of the base, 3 lots are equal to 300,000 units of the base, and so on. Margin: Margin is referred to as the collateral needed to facilitate A Forex deal. Usually, this is a very small portion of the entire deal, say 1% or 1:100. However, margin is a "double-edged sword."