What are Forex terms? I have collected some terms for you that you must know and learn before starting Forex trading. Learning about them will be useful for the profit of your investments.
What Are Forex Terms?
Open position: a term indicating that an investor in the Forex market is at risk or expects benefits. Indicates that the designated investment vehicle is in an open position, that is, in the case of buying or selling.
Buy price: this is the standard price in the market set for the investor to buy the investment vehicle of his choice.
Arbitrage: this is the process of buying a target investment vehicle from a cheap one and selling it to an expensive one if it is presented at different prices in different markets.
Supply : the state of readiness to sell the investment vehicle at the current price
Brokerage: these are licensed, audited and legal companies or banks that can perform Forex transactions within their structure.
Bear Market (bear Market): it is called markets where prices quickly depreciate after inputs and sales are very strong.
Back-Test: in Trading technique, profit is tested on past data.
Band: refers to the highest and lowest level of price movement in the specified time interval.
Simple interest : this is the interest rate at which the principal earns over the investment period.
Initial margin: the amount required to enter the intended position and trade in the Forex market.
Base currency: a term used for a currency unit used as a constant value in currency pairs in parity. For example, since $ 1 is expressed in TL when the dollar/TL parity is 5.75, here the dollar is the base currency.
Base Score: indicates the minimum price of the investment vehicle in the market.
Bid: refers to the purchase price of an investment vehicle in the market by the customer.
Compound interest: it is the operation of interest by reusing the interest amount of the principal deposited for interest processing at the end of the period as principal in the next period.
BOE (Bank of England) : means the Bank of England.
Bull market ( bull Market): these are called markets where prices in the market quickly increase in value with inputs and the intensity of purchases is too high.
BOJ (Bank of Japan) : means the Bank of Japan.
Brokers: they are called brokerage firms that meet buyers and sellers who serve investors in the Forex market.
Bundesbank: Germany’s Central Bank.
Buy Limit: this is the term used for purchases that want to be made below the minimum lower limit of the current market.
Buy Stop : a term that refers to purchases that are intended to be made above the maximum price of the current market.
Budget deficit: means that the total expenses of any country are greater than the revenues. The greater the budget deficit, the weaker the country’s economy.
Cable: it is the specialized and anonymous equivalent of sterling/dollar parity in the Forex market.
CAD: refers to the Canadian dollar, which is used as the currency of the Canadian state.
Candlestick : refers to candlestick charts, which are quite often used in market analysis.
Current account deficit: means that the total income of any country from exports and services it offers is less than the total amount of payments during imports and purchases of services. It is one of the main parameters that indicate the economic strength of the country.
Carry Trade: refers to buying a currency with a high interest rate by borrowing from a currency with a low interest rate in the market.
Chunnel: a term used to refer to euro/sterling parity in the Forex market.
Turnover: the total value of all transactions and revenues that occur in the specified time period in the enterprises.
Cross exchange rate: in case of trading with different currencies, all currencies are calculated in dollars and proportional to each other. In contrast, currency units that do not contain dollars are called cross-exchange rates.
Core inflation: an index formed by combining categories whose fluctuation is limited due to seasonal movements.
Floating exchange rate system: this is called a Exchange Rate System in which the national currency used by the country is freely determined according to supply and demand.
Day Trading: The Investor closes the positions he has opened on the same day without looking at the profit and loss situation.
Dealer : a term used for people and companies that make trading transactions in the market on their own behalf and account.
Deflation: refers to the continuous decline of market prices in the generally determined process.
Demo account: this is a trial account provided by brokerage firms before investors who have just entered the Forex market open a real account, aimed at training and gaining experience for investors and making transactions with virtual money.
Support point (level) : this is the base level where price drops from investment instruments in the market stop and have been experienced before.
Devaluation : a term that refers to the constant depreciation of the national currency used by a country.
Resistance point (level) : this is the ceiling level at which the price increases of investment instruments in the market stop and have been experienced many times before.
Doji: refers to analysis charts in which the opening and closing prices of investment instruments are almost the same, especially in unstable market types.
Currency pair: refers to a currency pair bought and sold together during simultaneous transactions in the markets.
Currency risk: refers to the fact that the type of currency that was previously purchased is likely to cause losses to the investor in the future.
EA (Expert Advisor) : it is an expert advisor appointed by the brokerage firm you have chosen to support you, especially when you start trading in the Forex market.
Exotic pairs : these are currency pairs that are constantly traded by investors of the country to which they belong in the markets.
Economic indicator: economic data that reveals the strength and possibly course of the country’s economy. For example, the inflation rate, national income per capita and Gross Domestic Product are the country’s economic indicators.
ECB (European Central Bank) : means the European Central Bank.
Inflation : refers to the fact that from an economic point of view, the total demand of citizens of the country exceeds the total supply offered, as a result, the prices of goods and services generally exceed market standards.
FED (Federal Reserve System) : means the Central Bank of the United States.
Financial instrument: refers to the market values involved in trading in the markets from a financial point of view.
Forex market: it is the most widely used international currency market today. It is the largest market in the world, allowing 24-hour trading 5 days a week and with a daily trading volume of about $ 6 trillion.
Forward: this is a contract between the buyer and seller that provides for the delivery of a pre-determined product on a specified date and at a specified price in the future.
FOMC (the Federal Open Market Committee) : means the Open Market Committee of the Central Bank of the United States.
Frank: refers to the national currency of the Swiss state.
GBP (Great Britain Pound) : means the British pound.
Chart: these are figures that allow analysis by revealing the date and price levels that show price fluctuations in the horizontal and vertical plane.
GNP ( Gross National Product): the total value of the total amount of goods and services produced by citizens living in a country over a period of one year in the national currency or the type of designated currency.
Moving average: a Forex indicator that aims to show the overall average level of the market as a result of mathematically determining the target asset price of its average value over the specified time period.
Hawkish: also referred to as hawkish policy, is an aggressive view that advocates the implementation of strict monetary policies in financial markets.
Hedge: refers to the fact that the investor trades in the same amount in the opposite direction of foreign exchange risk in order to protect against potential risks that exist in the market.
IB (Introducing Broker): it is a branding process created within the framework of CMB rules in order to carry out the promotional activities required by the institutions serving the market.
IMF (International Monetary Fund): it is an International Monetary organization and fund over countries created to follow the global economic order around the world, conduct the necessary audits and organizations, and provide the necessary technical and financial support to the countries in need.
Interbank Rates: these are restrictions on large currency transactions that large banks give to each other in the markets.
Jobber: a term used for investors who constantly make short-term transactions and trade in this way.
JPY: refers to the yen, the national currency of the country of Japan.
Leverage: low amounts in Forex Trading allow you to invest exponentially at a much greater rate.
Profit take / take Profit level: this is the level at which an open position in the Forex market will be automatically updated if it reaches a predetermined profit.
Opposite currency: 2 from two currency pairs in parity.denotes sin. It is also called a quoted or Pip currency.
Key Points: refers to the support and resistance levels in the currency trend, which are determined as a result of chart analysis and are continuous.
Short position / Short Position : refers to the selling position in buy-sell transactions and means that the investor will profit from the price drop.
Killer: refers to the automatic closing of the position with sudden movements in case of previously determined prices in the market.
Knocking: refers to the fact that the investment vehicle or exchange rate touches both support and resistance points 2 times as a price.