The fact regarding the FOREX market is that it is highly profitable, but on just one condition that they become the part of this market and get used to it. Another very important thing that investors need to do is to understand the terms prevailing in the market. It is very important to be aware of the basic terminology prevailing in the market. Let us learn some of them.
Cross rate – This phrase is most of the times used to refer to the currency quotes that don’t involve the US dollar regardless of which country the quote is provided in. The currency exchange rate between two currencies which are not the official currencies of the country in which the text is given.
Exchange Rate – This term is the value of one currency expressed in terms of another. For example, if EUR/USD is 1.3200, it means that one Euro is worth USD 1.3200.
PIP – The term PIP refers to the smallest increment of price movement a currency can make. Sometimes PIP is also called point or points. For example, 1 PIP for the EUR/USD = 0.0001 and 1 pip for the USD/JPY = 0.01.
Leverage – The term leverage actually refers to the ability to take your account to a position greater than the total account margin. Here is an example that suppose a trader has USD 1000 of margin in his account and he decides to open a USD 100,000 position; he leverages his account by 100 times.
Similarly, there are several other UK forex trading terms like MARGIN, SPREAD, BID PRICE, ASK PRICE, BID/ASK PRICE, etc.
Cross rate – This phrase is most of the times used to refer to the currency quotes that don’t involve the US dollar regardless of which country the quote is provided in. The currency exchange rate between two currencies which are not the official currencies of the country in which the text is given.
Exchange Rate – This term is the value of one currency expressed in terms of another. For example, if EUR/USD is 1.3200, it means that one Euro is worth USD 1.3200.
PIP – The term PIP refers to the smallest increment of price movement a currency can make. Sometimes PIP is also called point or points. For example, 1 PIP for the EUR/USD = 0.0001 and 1 pip for the USD/JPY = 0.01.
Leverage – The term leverage actually refers to the ability to take your account to a position greater than the total account margin. Here is an example that suppose a trader has USD 1000 of margin in his account and he decides to open a USD 100,000 position; he leverages his account by 100 times.
Similarly, there are several other UK forex trading terms like MARGIN, SPREAD, BID PRICE, ASK PRICE, BID/ASK PRICE, etc.