You might be one of those people who are lured by the unlimited financial gains that you can have through forex. Are you convinced that forex trading is the business suited for your skills and talent?
Are you sure that you are already familiar with how forex works? Well, like other professions or careers, forex, too, is special. It has its own language and unique terms that you have to master to be able to thoroughly comprehend every single detail that you need to guide you in your decisions.
The following are some of the most commonly used terms in forex. You have to master these terms in order to get ahead in the forex world.
a) Propeller Ben- Ben Bernanke is the significant person for American economics. He is officially the chairman of the governor’s board of the US Federal Reserve. b) A ton of money- Following what Bureau of Engraving and Printing has been saying, a ton of dollar banknotes has a very exact price and it is about $908,000, or almost a million dollars. c) Gold Standard- This means the exchange rate. d) Margin- is the amount of money required in your account to keep your trades on the market. e) Leverage- In finance, leverage is a general term for any technique to multiply gains and losses. f) Position- A general reference to an investment holding. g) Ask- Price at which broker/dealer is willing to sell. Same as “Offer”. h) Bid- Price at which broker/dealer is willing to buy. i) Bid/Ask Spread (or “Spread”)- The distance, usually in pips, between the j) Currency Futures- Futures contracts traded on an exchange, most typically the Chicago Mercantile Exchange (“CME”). Always quoted in terms of the currency value with respect to the US Dollar. Parameters of the futures contract are standardized by the exchange. k) Drawdown- The magnitude of a decline in account value, either in percentage or dollar terms, as measured from peak to subsequent trough.
Now that you are aware of these special terms, it is time for you to talk like a real forex tradesperson, use these terms in as many transactions as you can.