Forex is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. Forex transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The forex market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system until 1971. The forex market is currently one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions.
Ask (Offer) the price of the offer, the price you buy for.
Bear If someone has a negative view of a particular currency and believes that its price will decrease, they are said to be bearish about that currency.
Bid (Demand) the price of the demand, the price you sell for.
Bull - If someone has a positive view of a particular currency and believes that its price will increase, they are said to be bullish about that currency.
ECB (The European Central Bank) the main regulatory body of the European Union financial system.
Fed (The Federal Reserve) the main regulatory body of the United States of
America financial system, a division of which, the FOMC (Federal Open Market Committee), regulates, among other things, federal interest rates.
Fundamental Analysis a Forex trading analysis based only on news, economic indicators and global events.
GDP (Gross Domestic Product) this is a measure of the national income and output for a given country's economy. It is one of the most important online forex indicators.
Limit A limit is placed on a trade so as to exit it after a speculator has gained the expected number of pips.
Long Trading a currency under the assumption that its price will rise a buy trade..
Loss the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.
Lot definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).
Momentum the measure of the currency's ability to move in any given direction.
Moving Average (MA) one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
Open Position (Trade) position on buying (long) or selling (short) for a currency pair.
Order order for a broker to buy or sell the currency with a certain rate.
Pip Means Price Interest Point and refers to the smallest digit in any pricing, so if GBPUSD rose from 1.9443 to 1.9450, it rose 7 pips.
Pivot Point the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
Principal Value the initial amount of money of the invested.
Profit (Gain) positive amount of money gained for closing the position.
Forex analysis based only on news, economic indicators and global events.
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Author Resource:-
Dave Logen is a forex trader and strategy analyst. Other than writing, he designs software for market analysis of forex trading. For more information regarding forex and forex news, you may visit http://www.etoro.com
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