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Forex Terminology for beginners – ONE

Discussion in 'Forex Beginner Q&A' started by etoroforex, Feb 22, 2009.

  1. etoroforex

    etoroforex New Member

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    There are plenty of great forex glossaries to be found online. But for the absolute beginner it is useful to reduce these huge lists to a much more manageable size by isolating the most basic terms. These are the terms that you must understand and feel confident with during the period of learning to trade on your practice account.

    Ask (Offer) — the price of the offer, the price you buy for.

    Bear – If someone has a negative view of a particular currency and believes that its price will decrease, they are said to be ‘bearish’ about that currency.

    Bid (Demand) —the price of the demand, the price you sell for.

    Bull - If someone has a positive view of a particular currency and believes that its price will increase, they are said to be ‘bullish’ about that currency.

    ECB (The European Central Bank) — the main regulatory body of the European Union financial system.

    Fed (The Federal Reserve) — the main regulatory body of the United States of America financial system, a division of which, the FOMC (Federal Open Market Committee), regulates, among other things, federal interest rates.

    Fundamental Analysis — a Forex analysis based only on news, economic indicators and global events.

    GDP (Gross Domestic Product) — this is a measure of the national income and output for a given country's economy. It is one of the most important Forex indicators.

    Limit – A limit is placed on a trade so as to exit it after a speculator has gained the expected number of pips.

    Long – Trading a currency under the assumption that its price will rise – a ‘buy’ trade..

    Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.

    Lot — definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).

    Momentum — the measure of the currency's ability to move in any given direction.

    Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.

    Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.

    Order — order for a broker to buy or sell the currency with a certain rate.
    Pip – Means Price Interest Point and refers to the smallest digit in any pricing, so if GBPUSD rose from 1.9443 to 1.9450, it rose 7 pips.

    Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.

    Principal Value — the initial amount of money of the invested.

    Profit (Gain) — positive amount of money gained for closing the position.

    Online Forex analysis based only on news, economic indicators and global events.
     
  2. daniellefr

    daniellefr New Member

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    awesome dictionary. Keep adding more stuff in here, I am sure this will be very interesting and useful for the beginners.
     
  3. hightidelowtide

    hightidelowtide New Member

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    I agree, great work with the dictionary
     
  4. etoroforex

    etoroforex New Member

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    thanks guys
     
  5. herry_fxhope

    herry_fxhope New Member

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    Thank's about your information
     
  6. GoLearnForex

    GoLearnForex New Member

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    Hey buddy,

    Thanks for the information. There are various sites where you can find forex glossaries and terminology.
     
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