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Some Forex terms that you will find useful should you choose to start Forex Trading as a business or for extra income.

So let’s start with the obvious question, what is Forex?

The Forex (Foreign Exchange) Market is the largest market in the world. It is the market where currencies are traded.

Why should you consider to trade Forex?

The Forex market is open 24 hours a day.

Narrow Focus

Unlike the stock market, a smaller market with tens of thousands of stocks to choose from, the Forex market revolves around more or less eight major currencies.

Liquidity

The huge volume of daily trades makes it the most liquid market in the world, which means that under normal market conditions you can buy and sell currency as you please at any time of the day.

It’s Simple

Use technical analysis methods from other markets like equities.

Basic Forex terms

Listed below are some of the key terms used in Forex and CFD/Share trading

Pip

A Pip is the “Percentage In Point” (PIP), sometimes also referred to as “Point”. It is equal to the minimum price increase of a Forex trading rate. The most common Pip is 0.0001.

Ask price

The ask price is the price you can buy a currency at. It is also the price at which the market is willing to sell the currency to you.

Bid price

The bid price is the price you can sell a currency at. The market is willing to pay you this price for this particular currency.

Spreads

Spread are the difference between bid price and ask price.

Currency rate

A currency rate against another currency rate.

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