Not everyone familiar with forex trading. Actually, most people think that when you talk about forex trading, it has something to do with stocks or bonds. But forex trading is different from stocks or bonds. It is about the trading of currency pairs.Currencies are traded in pairs, and you can’t find a particular currency without a pair. The major currencies being traded are chosen above the rest because they are stable and have a greater value than other foreign currencies.
Whenever a new comer arrives in the market, the very first ones to take notice of them are what you call frauds. That is why, if you’re new in forex trading, you need to take some advice. It would be convenient to ask for advice from the ones who are already engaged in forex trading. In fact, you can make use of their advice for your own good, and even to your advantage.
Given that forex trading is globally available, it is not strange that some frauds are able to infiltrate the financial market. To safeguard people from these frauds, they must be made aware of these growing fact, so that they will be able to protect their trading career.
The opportunities that forex trading provides for different individuals, firms, and organizations is increasing rapidly every year. And accompanying this growth is the widespread growth of different scams related with forex trading. But there is no need to worry about it because there are a lot of legitimate companies or firms that can help you in forex trading.
The best you can do is to find these legitimate companies to stay away from fraudulent ones. However, most new traders become victims these scammers because of their savory offers.
A piece of advice: stay away from companies or firms which advertise high profits for minimal risks. In today’s financial market, if you want to earn high profits, you will probably have to run high risks as well. These things always go together.
Always stay on the safe side. If you’re looking for a forex trading broker, and of course, each broker is part of a certain company, make sure that you choose a government registered company. When signing any contract with them, double check if they are registered or certified brokers. This is a good step to undertake in order to prevent any adversity that you might encounter in the future.
It is your job reducing the risk, not that of the broker; so if the company offers or promises little risks, guaranteed profits, and something like that, that is a sure sign that they are there to make a fool out of you.
Professional trader or not, the use common sense can go a long way.
Before doing any forex trade, do your homework. Research all the necessary details about trading. Ever heard of inter-bank market? Stay away from companies which attacks you into trading in the inter-bank market because the currency transactions are negotiated in a unstable network of large companies and financial institutions.
If a certain company does not disclose any information about their background, that should serve as a red flag. It means that you should not keep on doing transactions with them. It is also inadvisable to transfer/send cash through the mail or the internet. Practice caution in everything you do, and you’ll be more than sure that you are always safe.
Fraudelent companies often solicit services and advertise soaring pressure tactics to attract you in participating or joining their services. Stay away from offshore companies which guarantees no risk and return of profit. Always be skeptical and don’t jump in to any instant offer that comes your way.
You can decide for yourself. After all these pieces of advice, it will be up to you whether you will apply it or not. You are the one who will be subject to fraudulent individuals or companies. If you want to protect your forex trading career, carefully consider these things.
With patience and a little attention, you can expect for a successful forex trading career. These frauds which overflow in the financial market will not succeed if only people are alert and skeptica
The Different Options You can Avail to Learn Forex Online Trading
Forex trading, many of people may already have heard of it, but not all know what it is all about. One may often assume that it is for the ‘big’ ones, big businesses and organizations. But that is not so, actually, there are a lot of ordinary individuals who are into forex trading.
Different countries or nations have different currencies. But not all currencies are traded in the FX market. There are seven major currencies traded in the market. Forex trading consists of buying and selling of currencies in pairs. You can possibly do the trade without a currency pair. A typical example is the US dollars/Japanese Yen. The essence of forex trading is to buy a currency at a lower price and sell it at a much higher price. But sometimes, having this knowledge is not sufficient. Forex trading involves a lot of different things that not all individuals have a proper knowledge on.
Forex trading takes place twenty four hours a day, so even when you’re sleeping, the trade continues. The FX market is by far the largest financial market in the whole world. That is why many organizations and individuals are attracted to do the trade.
In the past, large speculators, banks and currency traders controlled the FX market, but that is not such way any longer. There are now brokers who can help individuals and small companies by breaking down inter-bank units.
If you’re interested in forex trading, you can do it alone, but try to attend a forex course first, or practice as a beginner. The forex market is volatile, and new traders may find it hard because of the risks that it involves.
The last two options are much better especially if you are new in the FX market. This way, you can take advantage of well-experienced instructors. You are to have a real time experience which you can use later on when you do your trade.
You have to understand the process of forex trading first. Remember that the FX market has no boundaries or barriers. Though before entering the market, you have to know the right entry points.
Charting and mapping are also important aspects in forex trading. Charting software are readily available, you can secure one so that you can learn about it; as well as learning how to properly map it. This will show you how the market moves. And you can now make wise decisions whether to buy or sell a currency, and earn profits in return.
It is also important an thing to learn is forex trading psychology. You should know how to properly deal with all your losses, of course you can’t expect to gain at all times. If for a short period you have made a lot of losses, maybe its time to stop just for sometime. Don’t be carried away in doing the trade, otherwise you may incur a lot of losses.
New starters who instantly earn a lot of money may think that they know too much. But it helps to know that it is not the same all throughout. Good profits oftentimes encourage more people to trading too much, without considering the risks. Discipline is one trait that you should practice and learn.
Beginners, who go through forex trading on their own, without any help, are unlikely to succeed in this kind of trade, not unless he or she is ‘gifted’. Although they may enjoy a certain amount of revenue, time will come when won’t be able to keep up with the trade without knowledge of forex trading and its technical aspects.
As a trader, you alone can decide which option is best for you. Learning forex trading requires devotion, if you can pull it off on your own, good for you. But if you think that you need a little help, you are free to choose among the many forex trading classes available; or you can be a broker’s apprentice. Anyway you choose, you can learn so much about forex trading. And all your learning experiences can be of great importance once you do your actual trade.
There is no replacement for proper learning. It gives you a good grip about the trade, and you can be confident that you’re making good decisions. These would show a lot from the profits that you are about to gain
Different countries or nations have different currencies. But not all currencies are traded in the FX market. There are seven major currencies traded in the market. Forex trading consists of buying and selling of currencies in pairs. You can possibly do the trade without a currency pair. A typical example is the US dollars/Japanese Yen. The essence of forex trading is to buy a currency at a lower price and sell it at a much higher price. But sometimes, having this knowledge is not sufficient. Forex trading involves a lot of different things that not all individuals have a proper knowledge on.
Forex trading takes place twenty four hours a day, so even when you’re sleeping, the trade continues. The FX market is by far the largest financial market in the whole world. That is why many organizations and individuals are attracted to do the trade.
In the past, large speculators, banks and currency traders controlled the FX market, but that is not such way any longer. There are now brokers who can help individuals and small companies by breaking down inter-bank units.
If you’re interested in forex trading, you can do it alone, but try to attend a forex course first, or practice as a beginner. The forex market is volatile, and new traders may find it hard because of the risks that it involves.
The last two options are much better especially if you are new in the FX market. This way, you can take advantage of well-experienced instructors. You are to have a real time experience which you can use later on when you do your trade.
You have to understand the process of forex trading first. Remember that the FX market has no boundaries or barriers. Though before entering the market, you have to know the right entry points.
Charting and mapping are also important aspects in forex trading. Charting software are readily available, you can secure one so that you can learn about it; as well as learning how to properly map it. This will show you how the market moves. And you can now make wise decisions whether to buy or sell a currency, and earn profits in return.
It is also important an thing to learn is forex trading psychology. You should know how to properly deal with all your losses, of course you can’t expect to gain at all times. If for a short period you have made a lot of losses, maybe its time to stop just for sometime. Don’t be carried away in doing the trade, otherwise you may incur a lot of losses.
New starters who instantly earn a lot of money may think that they know too much. But it helps to know that it is not the same all throughout. Good profits oftentimes encourage more people to trading too much, without considering the risks. Discipline is one trait that you should practice and learn.
Beginners, who go through forex trading on their own, without any help, are unlikely to succeed in this kind of trade, not unless he or she is ‘gifted’. Although they may enjoy a certain amount of revenue, time will come when won’t be able to keep up with the trade without knowledge of forex trading and its technical aspects.
As a trader, you alone can decide which option is best for you. Learning forex trading requires devotion, if you can pull it off on your own, good for you. But if you think that you need a little help, you are free to choose among the many forex trading classes available; or you can be a broker’s apprentice. Anyway you choose, you can learn so much about forex trading. And all your learning experiences can be of great importance once you do your actual trade.
There is no replacement for proper learning. It gives you a good grip about the trade, and you can be confident that you’re making good decisions. These would show a lot from the profits that you are about to gain
Where to Get The Correct Education in Forex Trading
Forex or Foreign Exchange is the most liquid extensive financial market in the world. Unlike other financial market, the Forex market doesn’t have a centralized location. Exchanges are done through electronic network and the whole world participates in the trade.
Forex trading involves buying and selling of different currencies. As with most trades, to make a profit in Forex, you need to buy low and sell high. Forex isn’t really difficult to learn. However, there are things that you need to consider in order to successfully make some profit out of this very liquid financial market.
Forex trading can really give you a chance to earn large amounts of money. Actually, some people who traded in Forex became instant millionaires almost overnight. However, you should realize the fact that aside from the earning potential you can get when trading Forex, there are also risks involved and many people suffered huge financial losses trading in Forex.
This is the reason why an education on Forex trading is important for you. You have to get a proper education and not just a crash-course-read-articles kind of education.
In most business schools in the United States, there are courses specifically for trading in the financial market such as Forex. These schools can really give you that proper skills and knowledge required to successfully trade in the Forex market. Not only that. Getting a proper education from good business schools about Forex prepare you when you enter the Forex market to trade.
A good Forex trading school will educate you on how to read charts effectively and how to spot trends. Since knowing how to read the Forex market charts can give you an idea on where a particular currency is heading, you will have an idea on which currency you should buy and sell. Knowing how to read the charts is one of the most important skills you need to have when you enter the Forex market. This skill will considerably minimize the risk of losing money and maximize the chances of earning.
As much as possible, you should look for a school offering real-time trading with dummy accounts and real accounts. Since the best teacher is experience, schools should require you, as their students, to open dummy accounts for practice and also real funded accounts to trade currencies in the actual Forex market. However, the real funded accounts should be in mini Forex accounts to avoid risking and losing a lot of money in case you make a mistake in the trades.
Another advantage of trading in real or dummy accounts for practice is experience. Once you enter the Forex market, you will have a better idea on how Forex markets work. The school should also have different trading systems to allow you to choose which trading system you are most comfortable with. Also, you will get a first hand feel on how to use these systems and avoid making mistakes in the real world.
Since trading Forex today is widely available for all kinds of people with a computer and a high speed internet connection. Most people forget that Forex requires you to have skills and considerably, a high amount of money to invest. Forex doesn’t guarantee that everyone will win; you should know that Forex is a very risky financial market to invest in and having the proper knowledge and skills is essential for your success in trading in the Forex market.
You should be aware of the risks involved in Forex and you should also know that many people have suffered financially because they entered the Forex market without having the knowledge and skills required to be successful. Therefore, it is very important for you to get the proper education first before you enter the Forex market.
Always remember that if you have proper knowledge about trading Forex, you will have better chances to profit in this financial market.
There are several schools available that teaches all about the basics in Forex and allow you to experience trading in Forex with a trial account. Take in mind the things mentioned above and you can be sure that you will obtain all the things you need in order to start trading in the Forex market
Forex trading involves buying and selling of different currencies. As with most trades, to make a profit in Forex, you need to buy low and sell high. Forex isn’t really difficult to learn. However, there are things that you need to consider in order to successfully make some profit out of this very liquid financial market.
Forex trading can really give you a chance to earn large amounts of money. Actually, some people who traded in Forex became instant millionaires almost overnight. However, you should realize the fact that aside from the earning potential you can get when trading Forex, there are also risks involved and many people suffered huge financial losses trading in Forex.
This is the reason why an education on Forex trading is important for you. You have to get a proper education and not just a crash-course-read-articles kind of education.
In most business schools in the United States, there are courses specifically for trading in the financial market such as Forex. These schools can really give you that proper skills and knowledge required to successfully trade in the Forex market. Not only that. Getting a proper education from good business schools about Forex prepare you when you enter the Forex market to trade.
A good Forex trading school will educate you on how to read charts effectively and how to spot trends. Since knowing how to read the Forex market charts can give you an idea on where a particular currency is heading, you will have an idea on which currency you should buy and sell. Knowing how to read the charts is one of the most important skills you need to have when you enter the Forex market. This skill will considerably minimize the risk of losing money and maximize the chances of earning.
As much as possible, you should look for a school offering real-time trading with dummy accounts and real accounts. Since the best teacher is experience, schools should require you, as their students, to open dummy accounts for practice and also real funded accounts to trade currencies in the actual Forex market. However, the real funded accounts should be in mini Forex accounts to avoid risking and losing a lot of money in case you make a mistake in the trades.
Another advantage of trading in real or dummy accounts for practice is experience. Once you enter the Forex market, you will have a better idea on how Forex markets work. The school should also have different trading systems to allow you to choose which trading system you are most comfortable with. Also, you will get a first hand feel on how to use these systems and avoid making mistakes in the real world.
Since trading Forex today is widely available for all kinds of people with a computer and a high speed internet connection. Most people forget that Forex requires you to have skills and considerably, a high amount of money to invest. Forex doesn’t guarantee that everyone will win; you should know that Forex is a very risky financial market to invest in and having the proper knowledge and skills is essential for your success in trading in the Forex market.
You should be aware of the risks involved in Forex and you should also know that many people have suffered financially because they entered the Forex market without having the knowledge and skills required to be successful. Therefore, it is very important for you to get the proper education first before you enter the Forex market.
Always remember that if you have proper knowledge about trading Forex, you will have better chances to profit in this financial market.
There are several schools available that teaches all about the basics in Forex and allow you to experience trading in Forex with a trial account. Take in mind the things mentioned above and you can be sure that you will obtain all the things you need in order to start trading in the Forex market
Forex Trading: The Best Education You Can Get
People trade in a daily basis. Some trade their services for money, while others trade products like food, toys and other things for money. People trade with the purpose of earning money to properly live their everyday lives.
This is the reason why people work, why people put up businesses and why people trade in the financial market. Today, it is all about money in order for you to get yourself and your family a comfortable life.
If you are taking into consideration making money aside from your day job or starting a career, you can do so by trading in Forex. Surprisingly, most people don’t understand how Forex works but are still interested in trading in this financial market. Besides, people would really want to trade in the largest, the most liquid financial market in the world.
Forex operates 24 hours a day and 7 days a week with no centralized location unlike other financial markets. It involves all the currency in the world and trillions of dollars are being exchanged everyday in this market, what has made it the worlds largest and the most liquid financial market in the world.
The Forex market offers traders a promising way to earn money. However, Forex also has its risk and people can lose money trading in this market. But, there are also people who became millionaires in the Forex market almost overnight. Education is the key to start trading in the Forex market. Without the proper knowledge in Forex trading, chances are you will end up losing money.
Firstly, before you trade in Forex, this market operates by buying and selling currencies. In simpler terms, you, as a Forex trader, will be purchasing one kind of currency against another kind of currency. This gave Forex a trend to trade in pairs.
If you traveled to another country, you have probably traded your currency against the local country’s currency to enable you to buy things from that country. If you did this, you have a good idea on how Forex works.
If you want to trade in this ever liquid market, you have to get the best education possible in trading currencies. A good education will allow you to trade in Forex more effectively and increase your chances of earning a considerable amount of money. It is even known that lots of people have given up their day job to concentrate in Forex trading.
Getting a good education about Forex trading is essential to increase your chances of profiting and decrease the risks involved. In getting the proper education in Forex trading, you will also learn how to read Forex charts. Forex charts are one of the most important things you should learn in order to successfully trade in the Forex market. Without this knowledge, you are doomed to fail in this very liquid market.
Expert Forex traders said that the best way to learn Forex is by actively trading in the Forex market. For this, website and software developers have developed a program that you can use to practice trading Forex. There are websites available that will enable you to open a dummy Forex account where you can trade in a simulated Forex market using no money at all. With this kind of software, you can really learn the way Forex works. It is also a great program to get in touch with the Forex market and you can even consider it as a stepping stone to start trading in a real account.
Thanks to the internet and the improvements in technology, anyone can trade in this financial market. Unlike in the past, only the multi-national companies and financial institutions, such as banks are allowed to participate in the Forex market.
Trading Forex is relatively simple to start. All you need is a computer with a high speed internet connection, a funded Forex account, and a trading system.
Always remember that apart from the fact that Forex can give you the potential to earn a lot of money, the risks involved are also equally great. So, you should first read books about Forex trading that is readily available in the internet for purchase or for download. You have to learn about the major currencies traded in the market, about leverage, and also about minimizing the risks in trading
This is the reason why people work, why people put up businesses and why people trade in the financial market. Today, it is all about money in order for you to get yourself and your family a comfortable life.
If you are taking into consideration making money aside from your day job or starting a career, you can do so by trading in Forex. Surprisingly, most people don’t understand how Forex works but are still interested in trading in this financial market. Besides, people would really want to trade in the largest, the most liquid financial market in the world.
Forex operates 24 hours a day and 7 days a week with no centralized location unlike other financial markets. It involves all the currency in the world and trillions of dollars are being exchanged everyday in this market, what has made it the worlds largest and the most liquid financial market in the world.
The Forex market offers traders a promising way to earn money. However, Forex also has its risk and people can lose money trading in this market. But, there are also people who became millionaires in the Forex market almost overnight. Education is the key to start trading in the Forex market. Without the proper knowledge in Forex trading, chances are you will end up losing money.
Firstly, before you trade in Forex, this market operates by buying and selling currencies. In simpler terms, you, as a Forex trader, will be purchasing one kind of currency against another kind of currency. This gave Forex a trend to trade in pairs.
If you traveled to another country, you have probably traded your currency against the local country’s currency to enable you to buy things from that country. If you did this, you have a good idea on how Forex works.
If you want to trade in this ever liquid market, you have to get the best education possible in trading currencies. A good education will allow you to trade in Forex more effectively and increase your chances of earning a considerable amount of money. It is even known that lots of people have given up their day job to concentrate in Forex trading.
Getting a good education about Forex trading is essential to increase your chances of profiting and decrease the risks involved. In getting the proper education in Forex trading, you will also learn how to read Forex charts. Forex charts are one of the most important things you should learn in order to successfully trade in the Forex market. Without this knowledge, you are doomed to fail in this very liquid market.
Expert Forex traders said that the best way to learn Forex is by actively trading in the Forex market. For this, website and software developers have developed a program that you can use to practice trading Forex. There are websites available that will enable you to open a dummy Forex account where you can trade in a simulated Forex market using no money at all. With this kind of software, you can really learn the way Forex works. It is also a great program to get in touch with the Forex market and you can even consider it as a stepping stone to start trading in a real account.
Thanks to the internet and the improvements in technology, anyone can trade in this financial market. Unlike in the past, only the multi-national companies and financial institutions, such as banks are allowed to participate in the Forex market.
Trading Forex is relatively simple to start. All you need is a computer with a high speed internet connection, a funded Forex account, and a trading system.
Always remember that apart from the fact that Forex can give you the potential to earn a lot of money, the risks involved are also equally great. So, you should first read books about Forex trading that is readily available in the internet for purchase or for download. You have to learn about the major currencies traded in the market, about leverage, and also about minimizing the risks in trading
Forex V/S Stock
- The Forex market has a lot of advantages compare to stock market:
A Forex trader could make profit through the market no matter if it is bearish and bullish which is different from the capital market, Forex has no strict regulation in speculation, no matter whether it is a long-term or a short-term transaction there is still a hidden profit, moreover, Forex market is a double-transaction market which means Forex traders could make profit through both upward and downward trend.
Forex traders could obtain a much larger transaction compared to the stock market, through the Forex trading, Forex traders could obtain 100 times larger transaction compared to the stock market. According to the present US situation, if a Forex trader invests $1,000 in the stock market, the trader may obtain $2,000 of stock domination property with a proportion of 2:1, but through Forex trading, a Forex trader can do transaction with a proportion up to 100:1.
Forex trader may make profit from the ordinary news, like the interest rate change, Forex market is closely related to various countries' politic, economy and culture, Forex traders could also obtain profit from other kinds of news, for example interest rate level change, will influence the interest of the Forex deposit.
Forex traders could do 24 hours trading. The stock market can only be traded during daytime at a specific time, generally from 9:30a.m. to 4:00p.m.. If you too have your own full time job, then you will face the dilemma - either to give up your full time job or forgo the trading opportunity. But Forex market can be traded 5 days a week and 24 hours a day, Forex traders can trade during their free time which is normally at night after working hour.
If a trader analyze based on technical analysis, Forex trading would be much more suitable for such traders because the Forex market has a very large trading volume. Currently the Forex market has daily trading volume of 190 billion Dollar, such giant market will completely digest a fore trader's transaction cash, under such situation the accuracy of the technical analysis would be much higher then any financial market, the chances of using technical analysis to make profit would be much more higher.
In the stock market there are hundred and thousand kinds of stocks, then choosing stock will be a very difficult matter. But in the Forex market, the currency combination is extremely limited, this may enable Forex traders to concentrate on these currencies combination, and could follow the trend quickly.
Forex Glossary Terms
American-style option An option contract that may be exercised at any time before it expires.
Ask The quoted price at which a customer can buy a currency pair. Also referred to as the 'offer', 'ask price', or 'ask rate'.
Base Currency For foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. For example, in a USD/JPY currency pair, the US dollar is the base currency. Also may be referred to as the primary currency.
Bid The quoted price where a customer can sell a currency pair. Also known as the 'bid price' or 'bid rate'.
Bid/Ask Spread The point difference between the bid and ask (offer) price.
Call A call option gives the option buyer the right to purchase a particular currency pair at a stated exchange rate.
Counterparty The counterparty is the person who is on the other side of an OTC trade. For retail customers, the dealer will always be the counterparty.
Cross-rate The exchange rate between two currencies where neither of the currencies are the US dollar.
Currency pair The two currencies that make up a foreign exchange rate. For example, USD/YEN is a currency pair.
Dealer A firm in the business of acting as a counterparty to foreign currency transactions.
Euro The common currency adopted by eleven European nations (i.e., Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) on January 1, 1999.
European-style option An option contract that can be exercised only on or near its expiration date.
Expiration This is the last day on which an option may either be exercised or offset.
Forward transaction A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date. This term may also be used to refer to transactions that the parties expect to offset at some time in the future, but these transactions are not true forward transactions and are governed by the federal Commodity Exchange Act.
Interbank market A loose network of currency transactions negotiated between financial institutions and other large companies.
Leverage The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as 'gearing'.
Margin See Security Deposit.
Offer See ask.
Open position Any transaction that has not been closed out by a corresponding opposite transaction.
Pip The smallest unit of trading in a foreign currency price.
Premium The price an option buyer pays for the option, not including commissions.
Put A put option gives the option buyer the right to sell a particular currency pair at a stated exchange rate.
Quote currency The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. Also referred to as the secondary currency or the counter currency.
Rollover The process of extending the settlement date on an open position by rolling it over to the next settlement date.
Retail customer Any party to a forex trade who is not an eligible contract participant as defined under the Commodity Exchange Act. This includes individuals with assets of less than $10 million and most small businesses.
Security deposit The amount of money needed to open or maintain a position. Also known as 'margin'.
Settlement The actual delivery of currencies made on the maturity date of a trade.
Spot market A market of immediate delivery of and payment for the product, in this case, currency.
Spot transaction A true spot transaction is a transaction requiring prompt delivery of and full payment for the currency. In the interbank market, spot transactions are usually settled in two business days. This term may also be used to refer to transactions that the parties expect to offset or roll over within two business days, but these transactions are not true spot transactions and are governed by the federal Commodity Exchange Act.
Spread The point or pip difference between the ask and bid price of a currency pair.
Sterling Another term for British currency, the pound.
Strike price The exchange rate at which the buyer of a call has the right to purchase a specific currency pair or at which the buyer of a put has the right to sell a specific currency pair. Also known as the 'exercise price
Ask The quoted price at which a customer can buy a currency pair. Also referred to as the 'offer', 'ask price', or 'ask rate'.
Base Currency For foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. For example, in a USD/JPY currency pair, the US dollar is the base currency. Also may be referred to as the primary currency.
Bid The quoted price where a customer can sell a currency pair. Also known as the 'bid price' or 'bid rate'.
Bid/Ask Spread The point difference between the bid and ask (offer) price.
Call A call option gives the option buyer the right to purchase a particular currency pair at a stated exchange rate.
Counterparty The counterparty is the person who is on the other side of an OTC trade. For retail customers, the dealer will always be the counterparty.
Cross-rate The exchange rate between two currencies where neither of the currencies are the US dollar.
Currency pair The two currencies that make up a foreign exchange rate. For example, USD/YEN is a currency pair.
Dealer A firm in the business of acting as a counterparty to foreign currency transactions.
Euro The common currency adopted by eleven European nations (i.e., Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) on January 1, 1999.
European-style option An option contract that can be exercised only on or near its expiration date.
Expiration This is the last day on which an option may either be exercised or offset.
Forward transaction A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date. This term may also be used to refer to transactions that the parties expect to offset at some time in the future, but these transactions are not true forward transactions and are governed by the federal Commodity Exchange Act.
Interbank market A loose network of currency transactions negotiated between financial institutions and other large companies.
Leverage The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as 'gearing'.
Margin See Security Deposit.
Offer See ask.
Open position Any transaction that has not been closed out by a corresponding opposite transaction.
Pip The smallest unit of trading in a foreign currency price.
Premium The price an option buyer pays for the option, not including commissions.
Put A put option gives the option buyer the right to sell a particular currency pair at a stated exchange rate.
Quote currency The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. Also referred to as the secondary currency or the counter currency.
Rollover The process of extending the settlement date on an open position by rolling it over to the next settlement date.
Retail customer Any party to a forex trade who is not an eligible contract participant as defined under the Commodity Exchange Act. This includes individuals with assets of less than $10 million and most small businesses.
Security deposit The amount of money needed to open or maintain a position. Also known as 'margin'.
Settlement The actual delivery of currencies made on the maturity date of a trade.
Spot market A market of immediate delivery of and payment for the product, in this case, currency.
Spot transaction A true spot transaction is a transaction requiring prompt delivery of and full payment for the currency. In the interbank market, spot transactions are usually settled in two business days. This term may also be used to refer to transactions that the parties expect to offset or roll over within two business days, but these transactions are not true spot transactions and are governed by the federal Commodity Exchange Act.
Spread The point or pip difference between the ask and bid price of a currency pair.
Sterling Another term for British currency, the pound.
Strike price The exchange rate at which the buyer of a call has the right to purchase a specific currency pair or at which the buyer of a put has the right to sell a specific currency pair. Also known as the 'exercise price
Forex Glossary Terms
American-style option An option contract that may be exercised at any time before it expires.
Ask The quoted price at which a customer can buy a currency pair. Also referred to as the 'offer', 'ask price', or 'ask rate'.
Base Currency For foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. For example, in a USD/JPY currency pair, the US dollar is the base currency. Also may be referred to as the primary currency.
Bid The quoted price where a customer can sell a currency pair. Also known as the 'bid price' or 'bid rate'.
Bid/Ask Spread The point difference between the bid and ask (offer) price.
Call A call option gives the option buyer the right to purchase a particular currency pair at a stated exchange rate.
Counterparty The counterparty is the person who is on the other side of an OTC trade. For retail customers, the dealer will always be the counterparty.
Cross-rate The exchange rate between two currencies where neither of the currencies are the US dollar.
Currency pair The two currencies that make up a foreign exchange rate. For example, USD/YEN is a currency pair.
Dealer A firm in the business of acting as a counterparty to foreign currency transactions.
Euro The common currency adopted by eleven European nations (i.e., Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) on January 1, 1999.
European-style option An option contract that can be exercised only on or near its expiration date.
Expiration This is the last day on which an option may either be exercised or offset.
Forward transaction A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date. This term may also be used to refer to transactions that the parties expect to offset at some time in the future, but these transactions are not true forward transactions and are governed by the federal Commodity Exchange Act.
Interbank market A loose network of currency transactions negotiated between financial institutions and other large companies.
Leverage The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as 'gearing'.
Margin See Security Deposit.
Offer See ask.
Open position Any transaction that has not been closed out by a corresponding opposite transaction.
Pip The smallest unit of trading in a foreign currency price.
Premium The price an option buyer pays for the option, not including commissions.
Put A put option gives the option buyer the right to sell a particular currency pair at a stated exchange rate.
Quote currency The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. Also referred to as the secondary currency or the counter currency.
Rollover The process of extending the settlement date on an open position by rolling it over to the next settlement date.
Retail customer Any party to a forex trade who is not an eligible contract participant as defined under the Commodity Exchange Act. This includes individuals with assets of less than $10 million and most small businesses.
Security deposit The amount of money needed to open or maintain a position. Also known as 'margin'.
Settlement The actual delivery of currencies made on the maturity date of a trade.
Spot market A market of immediate delivery of and payment for the product, in this case, currency.
Spot transaction A true spot transaction is a transaction requiring prompt delivery of and full payment for the currency. In the interbank market, spot transactions are usually settled in two business days. This term may also be used to refer to transactions that the parties expect to offset or roll over within two business days, but these transactions are not true spot transactions and are governed by the federal Commodity Exchange Act.
Spread The point or pip difference between the ask and bid price of a currency pair.
Sterling Another term for British currency, the pound.
Strike price The exchange rate at which the buyer of a call has the right to purchase a specific currency pair or at which the buyer of a put has the right to sell a specific currency pair. Also known as the 'exercise price
Ask The quoted price at which a customer can buy a currency pair. Also referred to as the 'offer', 'ask price', or 'ask rate'.
Base Currency For foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. For example, in a USD/JPY currency pair, the US dollar is the base currency. Also may be referred to as the primary currency.
Bid The quoted price where a customer can sell a currency pair. Also known as the 'bid price' or 'bid rate'.
Bid/Ask Spread The point difference between the bid and ask (offer) price.
Call A call option gives the option buyer the right to purchase a particular currency pair at a stated exchange rate.
Counterparty The counterparty is the person who is on the other side of an OTC trade. For retail customers, the dealer will always be the counterparty.
Cross-rate The exchange rate between two currencies where neither of the currencies are the US dollar.
Currency pair The two currencies that make up a foreign exchange rate. For example, USD/YEN is a currency pair.
Dealer A firm in the business of acting as a counterparty to foreign currency transactions.
Euro The common currency adopted by eleven European nations (i.e., Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) on January 1, 1999.
European-style option An option contract that can be exercised only on or near its expiration date.
Expiration This is the last day on which an option may either be exercised or offset.
Forward transaction A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date. This term may also be used to refer to transactions that the parties expect to offset at some time in the future, but these transactions are not true forward transactions and are governed by the federal Commodity Exchange Act.
Interbank market A loose network of currency transactions negotiated between financial institutions and other large companies.
Leverage The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as 'gearing'.
Margin See Security Deposit.
Offer See ask.
Open position Any transaction that has not been closed out by a corresponding opposite transaction.
Pip The smallest unit of trading in a foreign currency price.
Premium The price an option buyer pays for the option, not including commissions.
Put A put option gives the option buyer the right to sell a particular currency pair at a stated exchange rate.
Quote currency The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. Also referred to as the secondary currency or the counter currency.
Rollover The process of extending the settlement date on an open position by rolling it over to the next settlement date.
Retail customer Any party to a forex trade who is not an eligible contract participant as defined under the Commodity Exchange Act. This includes individuals with assets of less than $10 million and most small businesses.
Security deposit The amount of money needed to open or maintain a position. Also known as 'margin'.
Settlement The actual delivery of currencies made on the maturity date of a trade.
Spot market A market of immediate delivery of and payment for the product, in this case, currency.
Spot transaction A true spot transaction is a transaction requiring prompt delivery of and full payment for the currency. In the interbank market, spot transactions are usually settled in two business days. This term may also be used to refer to transactions that the parties expect to offset or roll over within two business days, but these transactions are not true spot transactions and are governed by the federal Commodity Exchange Act.
Spread The point or pip difference between the ask and bid price of a currency pair.
Sterling Another term for British currency, the pound.
Strike price The exchange rate at which the buyer of a call has the right to purchase a specific currency pair or at which the buyer of a put has the right to sell a specific currency pair. Also known as the 'exercise price
Jumping into the Forex Market
You may have probably heard people saying that there is a lot of money to be made in the currency market or in the Forex trade but wondered how that was really possible. The fact of the matter is that if you hear someone say that this is a great place to make easy money then you are speaking to the wrong person because making money at Forex is a risky venture that not only requires luck but a proper grasp of how the market moves. It’s safe to say that you can easily make a million dollars today and loose ten million tomorrow.
If you are looking to try your hand at trading currencies I would suggest that you start by getting yourself a demo account from any one of the many online forex trading websites. A demo account with come preloaded with some ‘funny money’ that you can use to execute real time trades to learn if the decisions you are making are profitable. Over time as you do this you will begin to get a feel of how the market moves as well as whether or not you are ready to put in some real money.
If you are looking to try your hand at trading currencies I would suggest that you start by getting yourself a demo account from any one of the many online forex trading websites. A demo account with come preloaded with some ‘funny money’ that you can use to execute real time trades to learn if the decisions you are making are profitable. Over time as you do this you will begin to get a feel of how the market moves as well as whether or not you are ready to put in some real money.
