FOREX Terminology
Greetings.
Then I give a list of terms used when trading in Forex. If you're interested in entering the world of Forex you need to know the basic terminology.
Fundamental analysis: The analysis shows how the value of the currency is affected by relevant economic facts and certain international variables.
Technical Analysis: The analysis examines the historical contribution of money to try to determine a pattern to be repeated or any indication of when the trends change.
Leverage: The amount by which we operate in the market, expressed in proportion to our capital invested. If the leverage is 200:1 can operate with 200 times our capital.
Findings: It is said that a currency appreciates when the price increases due to excess demand of the market, is an increase in the value of the currency.
Broker: An agent who handles investors' orders to buy and sell currencies. For this service we charge a fee, depending on the broker and the amount of the transaction. This commission is the spread.
Closing a Position: Delete a transaction in our portfolio, by performing the opposite operation. For example we sell a currency or buy one that had sold.
Crossing: Quote of the coin or currency of a given country measured in terms of another currency, also known as the currency pair.
Depreciation: A decrease in the value of a currency due to oversupply the market.
Depreciation Decline in value of one currency against another currency value, usually caused by an official announcement.
Currency: The name given to the currency of a country.
Forex: The FOREX word comes from the abbreviation of the word in English: Foreign Exchange (Foreign Currency). It is known for FOREX Foreign Exchange Market, one of the largest financial markets in the world, which consists of buying and selling of international currencies.
Economic Indicator: A statistic that indicates the current stability and growth of the economy, issued by the government or a nongovernmental entity (eg GDP, Employment Rates, Trade Deficits, Inflation, etc.).
Margin Call: Request for additional funds in the account to maintain the specified minimum margin to cover adverse movements in the market price.
Market Maker: An agent who is willing to buy or sell at the prices stipulated in buying and selling. A market maker runs a book operations.
Initial Margin: The initial deposit of collateral required to enter a position to guarantee compliance with that position in the future.
Bull Market: A market characterized by a prolonged period of rising prices accompanied by a widespread optimism. (Opposite of bear market)
Bear Market: A market characterized by a prolonged period of falling prices accompanied by widespread pessimism. (Opposite of Bull Market)
Base Currency: The currency in which the investor or issuer maintains the balance of your account, the currency against which other currencies are quoted. In the currency market, usually considered the U.S. dollar the currency `base 'for quotes, meaning that quotes are expressed as a unit of $ 1 USD (U.S. dollar) per the other currency quoted in the pair.
Order Cancels Order (OCO): A mode of execution, in which having given two orders (such as a Stop-Loss and Limit) if a run, the other is canceled automatically.
PIPS: It stands for "Price Interest Point" (Point of Interest Rate). Is the smallest unit of change in a currency pair.
Platform: The software of the broker through which purchase and sell foreign currencies.
Position: A position to perform the current operation to a particular currency, as expressed by the purchase or sale of the same, providing or detracting from our own.
ASK Price: price currency demand, the price at which the market is willing to sell this currency.
IDB price: price offer on the currency, the price at which the market is willing to buy the currency.
Spread: It is called the difference between the BID and ASK price of a currency. Put more simply, is the price difference between purchase price and sale of a currency.
Stop-Loss Order: It is a tool in the Forex platforms by which we can set a fixed price to close a position we have open to avoid or limit losses.
Take Profit Order: Reverse a "Stop-Loss Order", here we set the price to close a position when we have automatically determined gain.
Volatility: A statistical measure of changes in price movements in the market over time and is calculated using a standard deviation. A high level of volatility implies a higher degree of risk.
Traded volume: The volume traded, or level of operations in a given period, usually daily or yearly.
