New to forex trading? Here’s the trading lingo you need to know…

Julie Brownlee, Fsp Invest, 30 Oct. 2014

Tags: forex, forex trading, forex trading glossary, trading glossary, beginner forex trading,

If you’re just starting to trade forex, you’ll have to get to grips with the vocabulary that traders use.

This way you’ll be able to understand what you’re doing better. Before you know it you’ll be sounding like a seasoned forex trader.

So what terms do you need to know when it comes to forex trading?

Read on to find out…

Your introduction to forex trading glossary

This is when you place a forex trade when you think the market is going to rise. This is also known as going long. If you’re in a short forex trade, you’ll buy to close your position.

Expiry date
This is the date which you can no longer trade a currency futures contract. For instance, March futures expire of the morning of the Monday before the third Thursday of the month.

This is the magnifying effect of the potential positive or negative outcome of your forex trade. When you trade forex, using currency futures or spread trading, you’re trading geared products.

Gearing also gives trading a high level of risk. For example, if you’re ten times geared, your gains or losses will be multiplied by ten.

This is having a forex position when you bought the currency in the hope the price will rise. It’s the same as buying.

This is the amount of money you need to open and maintain a forex position. This depends on the gearing and the size of the trade you’re in.

This is putting a forex trade on when you think the currency pair will fall in value. It’s also known as going short. Or if you’re in a long position, this is how you close your trade.

This is the same as selling. You put a forex trade on where you sell the currency in the hope it will drop in value. To close the trade you have to buy the position back at a later date.

Stop loss
A stop loss is an order you give you forex trading company to limit your losses if a trade you’re in goes against you.

So there you have it, the trading lingo you need to know if you’re new to forex trading.

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