Forex Trading

To better understand Forex trading, there are certain terms and phrases for which you will need the definitions. Here are some terms that will come in handy as you begin making trades in the Forex market.

Appreciation – Appreciation describes when currency rises in value on the Forex market.

Bear – A bear market describes the Forex trading market when prices for currency are steadily falling.

Bull – A bull market describes the Forex trading market when prices for currency are steadily rising.

Cross – A cross is the word for a trade of one currency for another on the Forex trading market. It is called a cross because the one currency crosses the other as they change hands.

Depreciation – Depreciation describes when currency falls in value on the Forex trading market.

Long – This is the term used to describe the action of buying currency on the Forex trading market. A long position will turn a profit if the market prices rise.

Majors – Majors are the most popularly traded cross exchanges. They include USDJPY, GBPUSD, EURUSD, and USDCHF.

Margin – A margin is the amount of the trade that must actually be paid when it is placed. It is sometimes as low as 2 percent.

Pip – A pip is the smallest amount of difference that is noted in the price change of currency.

Short – This is the term used to describe the action of selling currency on the Forex trading market. A short position will turn a profit if the market prices fall.

Spread – The spread describes the difference between the selling price for currency and the buying price.

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