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Forex Trading Terminology: 5 Must Know Terms

Forex Trading Terminology 5 Must Know Terms PIP A pip is short from Percentage in Point and represents the smallest increment that an exchange rate can move up or down. Usually, one pip equals the fourth decimal of most currency pairs. Currency pair Each time we place a trade in the market, we have to trade on currency pairs. Currency pairs consist of two currencies - the first one is the base currency and the second one the counter-currency. Going long/short You've probably heard about going long or short in a currency pair. Going long simply means to buy, while going short means to sell. In equity markets, most traders are long in anticipation of rising prices. Leverage Trading on leverage allows traders to open a much larger position size than their initial trading account size would otherwise allow, and the Forex market is known for extremely high leverage ratios offered by retail brokers. Exchange rate The exchange rate of a currency pair is what all traders follow. The exchange rate is often simply called the price, since it shows the price of the base currency expressed in terms of the counter-currency. WwW.FXREVIEWS.BEST

Forex Trading Terminology: 5 Must Know Terms

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A pip is short from Percentage in Point and represents the smallest increment that an exchange rate can move up or down. Usually, one pip equals the fourth decimal of most currency pairs.

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