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Friday, January 1, 2010

The Tower of Forex - Reaching each other using Terminology

By Tom K Kearns

If it is not enough that God came down from the heavens to see the Tower of Babel, and then separate each soul by a foreign language so that they could not talk to one another but now here lies a terminology, a language, to be used amongst the masses of foreign exchange so that they can understand one another leaving non-Forex citizens out of the loop.

Although the terminology used by the foreign exchange inhabitants makes perfect sense to themselves it all sounded like babble to me when I set out to learn it. Traders know best the language of shortened phrases, acronyms, and idioms that explains what they want during speeches of exchanges and trades. Any new or experienced Forex civilian must learn and be comfortable with the language.

You will be left in the dust not being educated and fully prepped in this speech used to converse with fellow speakers. The journey into a career of a Forex trader can be forgotten if confused by the terminology or not aware of the sayings they use. For now at least.

The leading financial market of the world is the Forex market which trades all global currencies in real time. A basic understanding of the language is a must to succeed at all in the Forex market.

Basic terminology

To get by in the utmost way one must know at least the basic terminology of the Forex globe.

Bullish, if you are bullish you have a general tendency to trade on the long side of a currency pair and believe that pair will increase in price.

Bearish is having a general tendency to trade on the short side of a currency pair and believing that pair will decrease in price.

Going long refers to buying a currency pair with the hope that the price will go up.

4) Going short- selling a currency that is not yet owned by the trader, with the hope that the price will decrease and the currency can be put back at a lower price than that at selling.

Pip, as funny as it may sound, is popular as well. A pip is simply the smallest price change that a currency pair can make. It generally is equal to 10USD on full size lots of 100,000.

6) Range- the offering of information to the seller on the variety of prices offered; also gives the highest and lowest prices of the currencies.

The full range of definitions for the Forex language can be found on many websites and dictionaries. If an interest exists in a career of Forex trading you must be full prepped on the terminology needed for conversation. If not you will be separated from your fellow Forex inhabitants by the language of terminology. This surely is not wanted. - 23208

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