Tipswalet. this is the term in forex To Predicting The Market- Forex is currently one of the businesses in the field of short-term investments that are quite tempting. In forex, extensive knowledge is needed, especially in discussing terms that are often used in analyzing the currency market.
By knowing the terms in forex, you will easily understand about indicators, analysis, both technical and fundamental. This will affect your position when there is an opportunity to take a favorable position.
Summarized from many sources, we have compiled a variety of terms in forex that you need to know. No need to go at length, here is a list of terms in forex that you must know to support the ability to read indicators and analysis in trading foreign currency trading:
The term in forex
When you decide to learn forex trading, the number of terms and abbreviations used in the trading process may be confusing. However, there are actually only a few basic terms that are important for you to know. Here are some basic terms in forex trading that you need to remember and understand:
The value of a particular currency against another currency. For example, if it is written a currency pair EUR / USD = 1.3200, that means 1 Euro is worth 1,3200 dollars.
The smallest value change that can occur in a currency pair. Often also referred to as points. For example, 1 pip for the EUR / USD pair is 0.0001 and 1 pip for the USD / JPY pair is 0.01.
Leverage is a trading feature that allows you to control trades with an amount greater than the capital you have. For example, with 1: 100 leverage, you can open a trading position up to USD100,000 with only an initial capital of USD1,000.
With leverage, you can increase the profit you get, but also increase the potential loss if the position you open actually moves against the price forecast. For that, for those of you who are learning to trade, you should use the leverage that is not too large to minimize losses.
The margin is the amount of deposit needed to open or maintain a trading position. A margin is divided into ‘used’ and ‘free’. The used margin is the number of funds you use to maintain a trading position. While free margin means the number of funds available in your account and ready to be used to open another trading position.
Spread is the difference in selling price and purchase price or bid and ask of a currency pair. For example, if the EUR / USD pair is at 1.3200 / 03, the spread is 3 pips, which is between 1.3200 and 1.3203.
In forex trading, it is known as two-way trading, which is when market conditions arise or decrease. To get profit when the market goes up, you have to buy at a low price, and sell it when the price is high. This is known as a long position.
Meanwhile, if the market is moving down, you must first sell at a high price, then buy it at a low price. This position is called a short position.
Stop / Cut Loss
Stop loss or cut loss is a term that means stopping losses in trading. In many trading applications, this feature can be run automatically. You only need to enter the amount of loss that you anticipate as the maximum loss, and the application will close the position automatically if the loss actually occurs.
Analysis in Forex
In forex, there are 2 ways to analyze market movements. This is used as a reference by foreign currency traders to determine the position of actions to be taken in order to take advantage. Two ways to analyze market movements are technical and fundamental analysis
Fundamental Analysis is an analytical technique that is generally used by investors in predicting the movement of the market. They using Fundamental analysis to assist in buying and selling shares and forex decisions. In essence, Fundamental Analysis is an analysis that is based on the situation and conditions of the economy, politics and security globally as well as each country. This is because events or policies in a country will affect the currency traded.
Technical analysis is an analysis activity carried out on the history of the movement of the currency in a certain period of time or condition. Usually, traders simply look at historical prices in order to predict trends in future price movements.