ce increment a currency pair can make. The value of a pip varies and is determined by the pair, the lot size you buy or sell, and the amount of leverage you have. Using the EUR/USD again as an example; if the pair is at .9025 and goes to .9027 the increase is 2 pips.

Leverage: This is what attracts some to Forex. You can control large amounts of money while using very little of your own. The amount of leverage you can obtain varies from broker to broker. Here is an example. If you have an account with $1,000 and your broker offers 100:1 leverage, you can buy or sell $100,000 worth of currency.

These are just a few to get you started. In part two of this series we will cover several more terms commonly used by Forex tra

When you begin your path to Forex trading, you will undoubtedly think everyone is speaking a foreign language. Just like learning to speak Spanish , English, or any other language, it takes time. There are many Forex related terms you would never have heard had you not started this journey. Here we will discuss some of the more common terms used in currency (or Forex) trading.

Ask Price: The price at which a broker is willing to sell a currency pair.

Bid Price: The price at which a broker is willing to buy a currency pair.

Of course, these two prices are never the same and the difference between the two is what is commonly referred to as “the spread”. For example if the current ask price for EUR/USD is .9025 and the bid price is .9023, then the spread would be 2 pips. So, whether you are buying or selling, you will start every trade with a 2 pip deficit. Always remember to calculate the spread into your trading system.

Bull or (bullish): No, it’s not the same term you use when your winning trade makes a sudden reversal on you. This term means the price is going up.

Bear or (bearish): You can probably guess, the price is going down.

These terms are also commonly associated with a trend, meaning the currency pair is either in a “bullish” trend (going up) or in a “bearish” trend (going down). The nice thing is you can make money being a bull or a bear.

Base Currency: You will see currency pairs abbreviated like this; EUR/USD or USD/JPY. The first currency, in this example the Euro and the US dollar, would be considered the base currency. When the price of the EUR/USD goes up this means the Euro is gaining value while the dollar is losing value against the Euro.

Day Trading: I’ll trade you a Monday for a Saturday. Oh wait, this term actually means to open and close a position or positions in the market before the end of the day. But doesn’t the Forex market stay open 24/7? It does so, you can calculate days by going by the opening and close of each trading session i.e.; London, US, Asian, etc.

Drawdown: When you first hear this one you think it’s a poker term or a challenge to some type of duel. Actually, this is a very important term and one you try to avoid. No trading system wins every time. There will be peaks and valleys along the way. When you measure the systems peak to the subsequent valley, you have what is referred to as drawdown. Trading systems with a larger drawdown will require a larger account to avoid blowing out your account while you , so to speak, weather the storm of the drawdown.

Short or Long Positions: Hearing someone say they are short or long doesn’t mean they are either complaining or bragging. When you are selling a currency pair you are short or have “shorted” or “went short” on that particular pair. Having a long position or “going long” simply means you have bought the pair.

Pip or Pips: This is the smallest price increment a currency pair can make. The value of a pip varies and is determined by the pair, the lot size you buy or sell, and the amount of leverage you have. Using the EUR/USD again as an example; if the pair is at .9025 and goes to .9027 the increase is 2 pips.

Leverage: This is what attracts some to Forex. You can control large amounts of money while using very little of your own. The amount of leverage you can obtain varies from broker to broker. Here is an example. If you have an account with $1,000 and your broker offers 100:1 leverage, you can buy or sell $100,000 worth of currency.

These are just a few to get you started. In part two of this series we will cover several more terms commonly used by Forex trad

the bid price is .9023, then the spread would be 2 pips. So, whether you are buying or selling, you will start every trade with a 2 pip deficit. Always remember to calculate the spread into your trading system.

Bull or (bullish): No, it’s not the same term you use when your winning trade makes a sudden reversal on you. This term means the price is going up.

Bear or (bearish): You can probably guess, the price is going down.

These terms are also commonly associated with a trend, meaning the currency pair is either in a “bullish” trend (going up) or in a “bearish” trend (going down). The nice thing is you can make money being a bull or a bear.

Base Currency: You will see currency pairs abbreviated like this; EUR/USD or USD/JPY. The first currency, in this example the Euro and the US dollar, would be considered the base currency. When the price of the EUR/USD goes up this means the Euro is gaining value while the dollar is losing value against the Euro.

Day Trading: I’ll trade you a Monday for a Saturday. Oh wait, this term actually means to open and close a position or positions in the market before the end of the day. But doesn’t the Forex market stay open 24/7? It does so, you can calculate days by going by the opening and close of each trading session i.e.; London, US, Asian, etc.

Drawdown: When you first hear this one you think it’s a poker term or a challenge to some type of duel. Actually, this is a very important term and one you try to avoid. No trading system wins every time. There will be peaks and valleys along the way. When you measure the systems peak to the subsequent valley, you have what is referred to as drawdown. Trading systems with a larger drawdown will require a larger account to avoid blowing out your account while you , so to speak, weather the storm of the drawdown.

Short or Long Positions: Hearing someone say they are short or long doesn’t mean they are either complaining or bragging. When you are selling a currency pair you are short or have “shorted” or “went short” on that particular pair. Having a long position or “going long” simply means you have bought the pair.

Pip or Pips: This is the smallest price increment a currency pair can make. The value of a pip varies and is determined by the pair, the lot size you buy or sell, and the amount of leverage you have. Using the EUR/USD again as an example; if the pair is at .9025 and goes to .9027 the increase is 2 pips.

Leverage: This is what attracts some to Forex. You can control large amounts of money while using very little of your own. The amount of leverage you can obtain varies from broker to broker. Here is an example. If you have an account with $1,000 and your broker offers 100:1 leverage, you can buy or sell $100,000 worth of currency.

These are just a few to get you started. In part two of this series we will cover several more terms commonly used by Forex tra

EUR/USD or USD/JPY. The first currency, in this example the Euro and the US dollar, would be considered the base currency. When the price of the EUR/USD goes up this means the Euro is gaining value while the dollar is losing value against the Euro.

Day Trading: I’ll trade you a Monday for a Saturday. Oh wait, this term actually means to open and close a position or positions in the market before the end of the day. But doesn’t the Forex market stay open 24/7? It does so, you can calculate days by going by the opening and close of each trading session i.e.; London, US, Asian, etc.

Drawdown: When you first hear this one you think it’s a poker term or a challenge to some type of duel. Actually, this is a very important term and one you try to avoid. No trading system wins every time. There will be peaks and valleys along the way. When you measure the systems peak to the subsequent valley, you have what is referred to as drawdown. Trading systems with a larger drawdown will require a larger account to avoid blowing out your account while you , so to speak, weather the storm of the drawdown.

Short or Long Positions: Hearing someone say they are short or long doesn’t mean they are either complaining or bragging. When you are selling a currency pair you are short or have “shorted” or “went short” on that particular pair. Having a long position or “going long” simply means you have bought the pair.

Pip or Pips: This is the smallest price increment a currency pair can make. The value of a pip varies and is determined by the pair, the lot size you buy or sell, and the amount of leverage you have. Using the EUR/USD again as an example; if the pair is at .9025 and goes to .9027 the increase is 2 pips.

Leverage: This is what attracts some to Forex. You can control large amounts of money while using very little of your own. The amount of leverage you can obtain varies from broker to broker. Here is an example. If you have an account with $1,000 and your broker offers 100:1 leverage, you can buy or sell $100,000 worth of currency.

These are just a few to get you started. In part two of this series we will cover several more terms commonly used by Forex tra

erm and one you try to avoid. No trading system wins every time. There will be peaks and valleys along the way. When you measure the systems peak to the subsequent valley, you have what is referred to as drawdown. Trading systems with a larger drawdown will require a larger account to avoid blowing out your account while you , so to speak, weather the storm of the drawdown.

Short or Long Positions: Hearing someone say they are short or long doesn’t mean they are either complaining or bragging. When you are selling a currency pair you are short or have “shorted” or “went short” on that particular pair. Having a long position or “going long” simply means you have bought the pair.

Pip or Pips: This is the smallest price increment a currency pair can make. The value of a pip varies and is determined by the pair, the lot size you buy or sell, and the amount of leverage you have. Using the EUR/USD again as an example; if the pair is at .9025 and goes to .9027 the increase is 2 pips.

Leverage: This is what attracts some to Forex. You can control large amounts of money while using very little of your own. The amount of leverage you can obtain varies from broker to broker. Here is an example. If you have an account with $1,000 and your broker offers 100:1 leverage, you can buy or sell $100,000 worth of currency.

These are just a few to get you started. In part two of this series we will cover several more terms commonly used by Forex tra

ce increment a currency pair can make. The value of a pip varies and is determined by the pair, the lot size you buy or sell, and the amount of leverage you have. Using the EUR/USD again as an example; if the pair is at .9025 and goes to .9027 the increase is 2 pips.

Leverage: This is what attracts some to Forex. You can control large amounts of money while using very little of your own. The amount of leverage you can obtain varies from broker to broker. Here is an example. If you have an account with $1,000 and your broker offers 100:1 leverage, you can buy or sell $100,000 worth of currency.

These are just a few to get you started. In part two of this series we will cover several more terms commonly used by Forex traders.