Forex terms

Here are a number of Forex terms you need to know.

Forex

is an investment trading one currency with another currency. An abbreviation of Foreign Exhange or Exchange foreign currency. If the transactions in the money changers or banks for the buying and selling of US Dollar to the Rupiah, it is called a ' Spot ' Forex transactions (buying and selling going on here-the handover took place on the spot). Forex transactions are non-Spot is the buying and selling of currency contracts, so it is not a direct handover of goods, only his contract only.

Lot, Mini and Standard Contracts Contract/Regular

If we buy oil, its size is the liter, if granulated sugar then its size is kilogram. Forex for its size called a Lot. How the hell of Lot 1? If the world's Stock of 1 Lot = 500 shares, Forex 1 Lot = 10,000 currencies concerned, e.g. 1 Lot USD/JPY = 10,000 USD and GBP/USD 1 Lot = 10,000 GBP. Size of 1 Lot = 10,000 so-called Mini-Contracts, why is it called a Mini? Because earlier in the forex world is 1 Lot = 100,000 currency in question (also called Standard/Regular Contract), then because of the high interest in forex trading, then created a mini contract where the 1 Lot = 10,000 currency concerned

Margin

the guarantee is in forex trading, suppose as a down payment to purchase a home. When you submit an advance purchase of a home amounting to 30 million dollars for a home costing 100 million dollars then we get the contract purchase agreement, Your landlord is legally valid in the House despite only holding the contract. This contract you can sell at full price on others, such as being 120 million. You will earn a net profit of 20 million (120-100jt). The same is true in forex is traded contracts, currencies, e.g. USD/JPY value 1 lot contract is USD 10,000, to get it we simply issue a margin (deposit) of $ 100. Why is USD 100? This is related to the Leverage that is discussed below.

The margin deposited when the open position and will then be returned when closing a position, just like buying and selling homes of yesteryear. You deposit money when purchasing 30 million then resold for $ 120 million, when you receive money 120 million, then 100juta we pass on the seller and the seller returns the first cash advance (initial capital) of money and we have the 30jt 30 million of start-up capital and an excess of 20 million.

Leverage

Is leverage in Forex trading that ratio to determine how margin (cash advance) is required in the transaction, where the ratio is multiplied by the contract size. Example: 1: 200 Leverage on contracts for mini account is 10,000 then the margin used is (1/200) x 10,000 = 50 units of currency are traded.

For example, USD/JPY open position of 1 lot for mini-contracts, then purchased is 10,000 USD, the required margin is equal to 1/200 x 50 = USD 10,000 USD. If trade with GBP/USD then used margin is by 50 Pounds. For Standard account, contract used is 100,000 with the Leverage 1: 100, so 1 lot USD/JPY = USD 1000 and the margin required 1/200 x EUR 100,000 = USD 500

 

Buy

is the position in the Forex Trading to buy and do if prices are expected to rise. In a nutshell buy on the cheap and sell expensive time, your profit is the difference between the price when bought with resale time

Sell

is the position in the Forex Trading to sell and do if price is estimated to be down so that when prices go down you can close positions Sell you Buy lower. In short, such as consignment, we sell in advance with an expensive price (loan) and then we buy it back when the price is cheap, the difference being our advantage. Read more on the Two Way Opportunity

Orders and positions

Order is an order to buy or sell at a certain price but if Orders delivered turns ' match ' or ' there's his opponents ', for example if you order to buy at a price of 9500 and happen to anyone willing to sell at the same price, the Order becomes a position. So long as the order has not been ' match ' then his name still order but after the ' match ' then is now a position. To sell back that you already have position (closed position) then it can be done by doing Order again but with the direction berlawaran (if a Buy then closed with Sell and vice versa)

Floating Profit/Loss and Realized

When you have a buy position in the 9500 and then the price moves down to 9000, so if the calculated estimate of your loss is 9000-9500 =-500. But that value can still be changed tomorrow, somehow gain dropped to 8700 or back up to 9700. Well, the 500 at this point is called the Floating Loss (Loss), if the value is positive, for example, is now priced at 10,000 then the difference of 10,000-9500 = + 500 is called the Floating Profit. If you decide to sell/close your position at the moment the price is 10,000, the value + 500 to Realized Profit (not to mention Floating/floating but already a Real/Real)

 

Pip

a picture is worth 1 point rise or fall in the price movement. For mini account, 1 point value is $ 1, for a standard account is $ 10.

Technical Analysis

is an analysis in Forex trading to measure the movement of prices through a price chart. Things that ought to be aware of this is technical analysis trend, saturation, support, ressisten, and Pivot Point.

Fundamental Analysis

is an analysis in Forex trading to predict price movements based on Fundamental news. Fundamental news here in the form of economic news, political, and security that affect price movement.

Resistance

is the limit price on the psychological price, for example, currently (in 2010) the dollar exchange rate is 9,000 and has price limit of 10,000 Rupiah (resistance), which could be interpreted if until Exchange rates dollar broke through the 10,000 rupiah price then there is likely to be rising steadily away from 10,000, but haven't touched the 10,000 possibilities for the price will only move up and down below 10,000.

Support

is a price limit below which is a pair of resistance (above), for example, currently (in 2010) the exchange rate of the dollar has a lower price limit (support) 8,500 Rupiah, which could mean that up to exchange rates dollar down through the price of 8,500 rupiah then there is the possibility of going down steadily away from 8500 8500 haven't touched but as long as possible the price will only move up and down above 8500 (support) and under 10,000.(resistance)

Zig Zag

is a technical analysis tool to find out the trend at the same time support-ressisten price.