Terms in Forex Trading

Here are some terms you need to know Forex.

Forex

is an investment trade one currency with another currency. Is an abbreviation of Foreign Exhange or foreign currency exchange. If the transaction in money changer or a bank to purchase the US Dollar to Rupiah, then called a Forex transaction 'Spot' (buying and selling happening place - the handover occurred on the premises). Forex transactions are non-Spot is buying or selling currency contracts, so indirectly the handover of goods, only the contract alone.

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Lot, Mini Contracts and Contract Standard / Regular

If we buy oil, the measure is liter, if the sugar then the measure is kilograms. For its size forex called Lot. How much is the big one Lot it? If world stocks 1 Lot = 500 shares, at Forex 1 Lot = 10,000 currency in question, eg 1 Lot USD / JPY = 10.000USD and 1 Lot GBP / USD = £ 10,000. Size 1 Lot = 10,000 called Mini Contracts, why is it called the Mini? Because earlier in the forex world 1 Lot = 100,000 currency pair (also called Contract Standard / Regular), then because of the high interest in forex trading then made mini contracts where 1 Lot = 10,000 currency in question

margin

is a guarantee in forex trading, suppose like Advance purchase of a home. When you submit a home purchase down payment of 30 million for a house worth 100 million then we get a contract purchase agreement, you are legally rightful owner of the house although it only holds his contract. This contract can sell at full price in others, for example, to 120 million. You will earn a net profit of 20 million (120 - 100jt). The same is true in forex, which are contracts traded currency, eg USD / JPY then 1 lot contract value is USD 10,000, to get us spend enough margin (deposit) of USD 100 to USD 100. Why? It is associated with leverage that is discussed below.

Margin deposited when opening a position and then will be returned when closing the position, the same as buying or selling the house earlier. You deposit money of 30 million when purchased and then resold for $ 120 million, when you receive the money 120 million, then 100 million we submit the first seller and the seller return the deposit (initial capital) amounted 30jt and we have the money 30 million of initial capital and surplus 20 million.

leverage

Is the leverage in Forex trading, ie the ratio to determine how much margin (deposit) is required in the transaction, in which the ratio will be multiplied by the contract size. Example: Leverage 1: 200 on contracts 10,000 mini account is then used margin (1/200) x 10,000 = 50 units traded currency.

Eg open position of USD / JPY for 1 lot for mini contracts, then purchased is $ 10,000, the required margin is equal to 1/200 x $ 10,000 = USD 50. If trading with GBP / USD then used margin amounted to 50 Pounds. For the Standard account, the contract used was 100,000 with a leverage of 1: 100, so 1 lot of USD / JPY = USD 1000 and the necessary margin 1/200 x $ 100,000 = $ 500

Buy

is the position in Forex Trading to Buy and be done if the price is expected to rise. In short buy cheap and sell when the time is expensive, your profit is the difference between the price when purchased at the time of resale

sell

Forex Trading is in the position to Sell and do if the price is expected to fall so that when the price drops you can close your position with a Buy Sell lower. In short as consignment, we must first sell at high prices (borrow) and then we buy back when the price is cheap, the difference becomes our advantage. Read more in Two Way Opportunity

Order and Position

Order is an order to buy or sell at a certain price, but if the order is submitted turned out to 'match' or 'no opponent', for example if you buy order at the price of 9500 and happened to be willing to sell at the same price, the order becomes position. So as long as the order has not 'match', the name remains the order but after the 'match' it now becomes Position. To resell the position you already have (closed positions), it can be done by Order back but with directions berlawaran (if the position is then covered with a Buy Sell and vice versa)

Floating Loss / Profit and Realized

When you have a buy position in 9500 and then the price goes down to 9000, so if your losses are calculated estimate is 9000-9500 = -500. However, these values ​​can still be changed tomorrow, either increases or back down to 8700 rose to 9700. Now, the value of -500 at this time is called Floating Loss (Loss), if the value is positive, for example, the current price to 10,000, the difference 10000-9500 = + 500 called Floating Profit. If you decide to sell / close your position at the time the price is 10,000, then the value of +500 become Realized Profit (no longer a floating / floating but already Estate / Real)

pip

is the value of 1 point increase or decrease in price movements. For a mini account, the value of 1 point is $ 1, for a standard account is $ 10.

Technical analysis

is an analysis in Forex trading to measure price movements over the price chart. Things are noteworthy from this technical analysis is the trend, saturation, support, ressisten, and Pivot Point.

Fundamental analysis

is an analysis in Forex trading to predict price movements based on fundamental news. Fundamental news here in the form of economic news, politic, and security that affect price movement.

resistance

is the price limit above which is a psychological price, for example, at this time (in 2010) dollar exchange rate was 9000 and had a price limit on (resistance) 10,000 rupiah, which could mean that up to the price of the dollar through the price of 10,000 rupiah then there is likely to rise steadily away 10,000 but for not touching the 10,000 possible price will move up and down just under 10,000.

Support

is a price limit below which a pair of resistance (above), for example, at this time (in 2010) the exchange rate of the dollar has a price limit lower (support) 8,500 rupiah, which could mean that up to the price of the dollar down through the price of 8,500 rupiah then there is likely to be decline further away from 8500 but during 8500 the possibility has not touched the price will only move up and down over 8500 (support) and below 10,000. (resistance)

Zig Zag

is a technical analysis tool to know the trend well as support-ressisten price.

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