Forex Signals Glossary
As we do know by now that the Forex market is a very dynamic market to trade in. When trading in the forex market people generally use their very own trading strategies that they are comfortable with. Trading in the forex market with forex signal systems makes trading easy; however before you do so there are a lot of things you need to understand. Firstly you need to understand certain things when working with a forex signal. This will not only make it easier for you to trade but you will also learn how to take advantage of certain profitable situations. This is important for you if you want to make the best of your forex signal system.
Here is a glossary list of terms that are generally used in Forex signal systems:
Ask – This refers to the price that’s quoted and is generally the price you can pay to buy a certain currency. There are different names to it like “ask rate”, “offer”, and “ask price”.
Base currency –Forex is nothing but trading in currency pairs e.g. USD/GBP in this case the first currency is the base currency (USD). It is also known as the primary currency.
Bid – This is the quoted price with allows you to sell a currency pair. Most traders also refer to it as the 'bid price' or 'bid rate.'
Call - This is an option that allows you as the buyer the right to purchase a currency pair at its exchange rate as it is stated.
Cross Rate – This refers to the two trading currencies in a pair that make up the foreign exchange rate.
Expiration – This term also refers to the last day during which the option could be offset or even exercised.
Interbank Market- It refers to the network of currency transactions that is negotiated amongst a few large companies and most importantly financial institutions.
Leverage – This term refers to the ability where the large dollar is controlled with a commodity that has a small capital.
Open Position – A transaction that is not closed because of a corresponding opposite transaction.
Pip – It is considered to be the smallest trading unit in a foreign currency price.
Premium – This does not include commissions but is the price that is paid by the option buyer.
Put – This lets the buyer to sell a currency pair as per the rate that is stated in the exchange.
Quote currency – The second currency in the currency pair is referred to as quote currency.
Rollover – This is when you want to get the settlement date extended for which you will have to roll it over to another date.
Security deposit - The money if you have to open a position.
