Forex Terms Every Trader Should Know in 20236 min read
Reading Time: 3 minutesForex Terms is today’s topic. Investors should know. Forex, as it is known, is the name given to the exchange between foreign currencies.
Since the highest volume of trading is done on forex today and forex has high liquidity, traders and investors have started to spend more time with forex.
Of course, forex also has details that need to be learned and paid attention to. Forex terms is one of the information traders need in order to trade correctly.
We have mentioned forex platforms and forex trading tips in our other blog posts. In this article, we will talk about a few terms that you must know in the forex market.
Forex Terms
Like exchanges and cryptocurrencies, the forex market has its own language. You can start to step into the Forex market by learning the following words.
- Currency Pair: You need a trading pair to trade in the Forex market. You can see all trading pairs on the forex trading platform you use. In addition to the world’s most widely used currencies, you can also see the currencies of small countries on forex platforms and trade whenever you want.
- Pip: Pip indicates the lowest percentage in a trading pair. In other words, a possible exchange can be made at the lowest pip rate. The lowest percentage you will see when you want to trade in the Forex market is determined as 0.0001.
- Lot: The term lot, which investors frequently encounter, is seen as a payment unit. The lot size in the Forex market is 100,000 but this is not the only lot size offered. There are two other lot types called micro and mini and their sizes are 1,000 and 10,000.
- Leverage: Leverage is known as borrowing in the forex market, which allows you to make high-amount transactions without having to put in a large amount of money.With leverage, you can trade many times more than your deposited amount, but you also take the risk of loss at the same rate.
With leverage, it is possible to make and lose large amounts of money. You can see more detailed information about leverage in our other blog posts.
- Leverage: Leverage is known as borrowing in the forex market, which allows you to make high-amount transactions without having to put in a large amount of money.With leverage, you can trade many times more than your deposited amount, but you also take the risk of loss at the same rate.
- Margin: Traders who want to trade with leverage should deposit some money. The requested margin is demanded by the brokers depending on the chosen leverage ratio.To open a leveraged position, you must have the amount of margin. In summary, the amount of collateral you will deposit before making a transaction is expressed in margin.
Of course, not all forex terms are limited to the above terms. However, we have mentioned a few terms that you will often hear and cannot act without knowing.
Knowing the meanings of terms in the Forex market will allow you to trade more consciously, although it will not be enough to make money.
In addition to the terms, you should also research tips and strategies, and learn the platform you use and the tools it offers. Examining the trades of experienced traders and comparing them with your own can also be seen as one of the ways to gain experience.
Make sure to do your own research for the forex terms to know, and be sure to test your knowledge before investing real money.
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