Forex Terminology for Beginners – ONE

Ask (offer) – the price of the offer, the price for which you buy.

Bearish – If someone has a negative view of a particular currency and believes its price will decline, they are said to be “bearish” on that currency.

Bid (Ask) – the ask price, the price for which you sell.

Bull: If someone has a positive view of a particular currency and believes that its price will rise, they are said to be “bullish” on that currency.

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

Fed (The Federal Reserve) – the main regulatory body of the United States of

The US financial system, a division of which, the FOMC (Federal Open Market Committee), regulates, among other things, federal interest rates.

Fundamental Analysis – A Forex trading analysis based only on news, economic indicators and global events.

GDP (Gross Domestic Product) – this is a measure of national income and output for the economy of a given country. It is one of the most important online forex indicators.

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

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

Loss: The loss for closing a long position at a lower rate than the opening or a short position with a higher rate than the opening, or if the profit from closing a position was less than the broker’s commission.

Lot: defined number of units or amount of money accepted for handling operations (usually 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. Shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA), etc. they are just the ways of weighting rates and periods.

Open Position (Trade) – A position to buy (long) or sell (short) a currency pair.

Order: An order for a broker to buy or sell the currency at a certain rate.

PIP – stands for price interest point and refers to the smallest digit in any price, so if GBPUSD went up from 1.9443 to 1.9450, it went up 7 pips.

Pivot Point – The main support/resistance point calculated based on the high, low and closing prices of the previous trend.

Principal Value: The initial amount of money in the investment.

Profit (Profit) – positive amount of money earned by closing the position.

Forex analysis based solely on news, economic indicators and global events.

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