Basic Terms You Need To Know İn Forex Trading
Currency pairs have two different prices. Sale price and purchase price. The difference between these two prices is called “spread”. The brokerage house makes a profit from difference between two prices. Investors prefer to work with a brokerage house that evaluates low spread rates provides them.
It is the name given to the system that allows you to perform transactions above the capital you have. The higher leverage ratio, the higher your profitability and the greater risk of loss. The leverage in Turkey is 1:100. In this case you can trade up to $ 100,000, with $ 1,000 you have.
The trading unit used in Forex markets is called lot. The standart lot size commonly used is 100, 000 units. Besides the standart lot, there are two lots called Mini and Micro. Mini lot: 10,000, Micro lot is 1000 unit.
The name given to the minimum amount of money that you must have in your account to open a new position. Also known as deposit money.
It’s the smallest price step in parity. Example 2.010 – 2.012 = 2 pip
It’s the process of buying the major from two different currencies and selling the other.It goes on the long position. Example: For the EURUSD buying positon: The Euro will appreciate against the dollar. The Euro should be bought. The Dollar should be sold.
You provide a stop loss, You will lose your invesment with small amounts. It doesn’t matter the Forex Market go down. If you have a good profit, A stop loss will be good for your regular profit.
The value of one currency against another is called parity. For USD\ TRY example; shows how much TRY should be given to get one USD.