Forex Learning

Learn forex trading terminology

• BASE CURRENCY This is the first currency in a currency pair, and the currency your account is denominated in.
• BID PRICE/ SELL QUOTE Usually displayed on the left, it is the price at which you can sell your base currency.
• BUY QUOTE/ SELL PRICE Displayed on the right, it is the price at which you can buy your base currency.
• CURRENCY PAIR A foreign exchange deal is always made up of two currencies. Currencies are always bought and sold in pairs. When one is bought the other is sold. The first currency in the pair is the base currency, the second is the counter currency, also known as the terms currency.
• LEVERAGE This is expressed as a ratio and refers to the margin requirements enforced by your broker. If the broker you are using asks that you maintain a 2% margin, it means you must keep 2% of the total value of a forex trade in cash in your account. 50:1 is 2% expressed as a ratio.


• LOT The size of a transaction is measured in lots. One standard lot is typically 100,000 units of the base currency. Some dealers, however, offer trades of 1 unit at a time.
• MARGIN The deposit required to open or keep a position. It can be free or used. Your free margin is the amount that can be used to open new positions, while the used position refers to the amount being used to maintain a position.
• PIP Also known as points this is the smallest price increment a currency can make.
• ROLLOVER Settlement of a spot transaction usually occurs within 2 days. You can rollover a transaction, but you will be liable to interest charges.
• SPREAD The difference between the bid and sell price.

Start to learn forex trading with these few simple tips…

• Be realistic in your goals. Nearly everyone who enters the forex market wants to make money, with many have dreams of making truck loads of it. It is important to realise that it isn’t as easy as just having a dream. You have to work at it and gain all the knowledge you can. Forex lesson are an important part of your journey.
• Be cautious about bright promises. You probably won’t become a successful forex trader overnight.
• Don’t be overwhelmed by it all. Take advantage of all the resources available to you. Enrol for forex training courses, read forex lessons at every opportunity. Avail yourself of all the experienced and knowledgeable people out there, to help you on your way to becoming a successful trader.
• Open a demo account. Forex trading can be very exciting, but you need to learn to control your emotions. Making use of a demo account to hone your skills is an opportunity too good to miss.
• Don’t rush into trading with your own money. If you really don’t have the ready cash available to cover the inevitable first weeks or months loses, you really should practice your skills with a demo account. You could open a small live account if you wish to experience the thrill of trading with real money. If your finances are strictly limited keep it very small, while continuing to practice with your demo account.
• If an offer seems too good to be true it probably is. If you read somewhere or someone comes to you with a strategy that is sure to win you millions be suitably sceptical. If there was a way to invest 100 pounds which guaranteed enormous profits, the financial systems of the world would collapse.
• Forex trading is a learning process. Learn forex trading in one simple session? Impossible! The forex market is constantly evolving and as such you need to keep your forex training up to date.