Before we started the Trading world, it's good to understand some of the terms commonly used in the world of trading. This term is absolutely for you to understand. Of the term which I have stored in my head to understand and disappears, the better I write it here so that you can understand. In the parse some terms in forex, I will divide into sections for easy to be understood by you.
The following terms in Forex Trading:
Broker: services and only provides trading facilities, namely an agreement between buyer and seller to be able to do transactions-buy, Loss or profit. By trading on a trusted forex Broker, security funds will be more secure.
Note: don't just chase the big Bonus of the Forex brokers, Security Funds is the most important thing.
Pip: Pip is commonly used in mentioned the value of an exchange rate or also called with "points". An example: EUR/USD last week worth 1.4113 and today rose to 1.4125 it means pairs increase by as much as 12 Pips/Point.
Leverage: this is more or less the same meaning with "margin collateral" at stake. Simply put is when we infuse capital 500 dollar then if the unit is subjected to leverage 1:100 means that we are given the rights by the brokerage to buy 100 x greater than the funds that we have. Mean with money of 500 dollars, we provided funds for the purchase of foreign currency in the amount of 50,000 dollars. Well it's called collateral margin or leverage. Every broker has its own leveragenya. In this case, the large leverage means the possibility of profit/loss became bigger. Likewise, the small leverage then the magnitude of the losses that might occur with smaller profit consequences also become smaller in value. I myself prefer a little leverage because with such a smaller risk of loss. If I believe a transaction will benefit, then I can bring up the number of lots that will be me are operating with.
Contract Size: this is the magnitude of the multiplier in calculating profit and loss. The value is already a fix and have been set.
Lot: Lot is a unit of the contract on any transactions. So when I Transact, for example purchase (buy) EUR against USD then the value of the unit in the lot. Again each broker has its own rules in determining the lot, relying on the pip and levererage them.
Margin Call-: Margin Call may occur if available margin is insufficient to support the Potential Loss, so that the position will be automatically including Close. Arguably a Margin Call is a kind of Nightmare for traders, although there is also the assumed "not enough pergalaman as traders if had never felt the margin call".
Pair: in forex trading known Pair (pair), currency, e.g. EUR/USD, GBP/USD, USD/JPY, etc. When I do buy/long, pair against currencies of EUR/USD, then I buy EUR and sell USD. As well as the other way around. That's why in forex trading is not like selling goods. We can directly Transact as a pair without having to have the pair it first.
Take Profit: Is order to liquidate a position automatically at a certain price when a trader has gained a certain amount of profit.
Stop Loss: Is order to liquidate a position automatically at a certain price to limit losses that might occur if the market moves will fight direction the trader's position. or it can also serve to protect the profit obtained by the traders.
Trailing Stop: Is a facility provided by the Forex Broker, which can change the Stop Loss to lock automatically profit in multiples. Trailing Stop is the development of the Stop Loss. Trailing Stop is generally only works when the trader's position has profit more than a certain minimum value determined by the Broker (e.g. minimum 200 pips/point).
That's what some of the terms in Forex Trading you need to understand before entering into the world of Forex.
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