Fx Trading Lingo

Fx market generally refers to the foreign exchange market. It is the most liquid and the biggest financial market of the world with the average turnover of about $1.9 trillion daily. This market basically deals with the purchasing & selling of different currencies of the world. There are different terms in fx trading. As for beginners, it is essential to get familiar with fx trading lingo so that they can trade more efficiently. In simple words, before you actually start trading it is important to understand all the online fx trading lingo used in fx market.

Let’s find out some of the important fx trading terms used in fx market:

Base currency – In fx market, currencies are always traded in pairs. The value of a currency is determined by its comparison to the value of another. Base currency generally refers to the first currency in the currency pair.

Quote currency – As in fx market, currencies are quoted in pairs. The second currency in a currency pair is termed as quote or counter currency in fx trading. This is another fx trading lingo that you should get familiar with.

Ask price – This is another commonly used fx trading lingo. Fx currency is usually traded with bid and ask price. Ask price in fx trading refers to the price which a seller offers or willing to sell a currency to a purchaser. This price is also called as offer price.

Bid price – As fx currency is traded with bid and ask price, the bid price is the price which a purchaser wants to or willing to pay for the currency from the seller. This also includes in one of the important fx trading lingo.

Pips – Pips is another fx trading lingo used in fx market. It denotes smallest unit of price for any foreign currency.

Spread – Spread is the term that refers to difference between the bid & offer price.

Support level – This term is often used in fx trading. In fx trading when the price move downwards, the lower price level at which the price movement changes and begin moving upwards is called support level.

Resistance level – This is another fx trading lingo often used in fx market. In fx trading when the currency pair moves a higher price level and then return back, this higher price level is is known as resistance level.

Lots – The term lots demotes the size of fx transaction. A standard lot consist of 100,000 units whereas a mini lot has 10,000 units. However, there are also brokers that offer lot of 1,000 units.

Market order – This another fx trading lingo online that you need to get familiar. It is the type of order used to enter a trade at the latest market value.

Limit order – Limit order is frequently used term in fx trading. This order refers to the set numbers to sell at when the currency reaches a certain point. In simple words, this limit order is used to purchase and or sell when the trade gains a certain price in the market.

Stop Loss Order – This order is often used by traders to minimize potential losses. In simple words it’s an order type that helps the traders against the potential losses by pulling out.

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