Basic terms of forex, Forex buy/sell, currency trading

 

Basic terms of Forex:
 
  1. Ask Price: The price at which the market is prepared to sell a currency. At this price, trader can buy the base currency.
  2. Base currency: The first currency in the currency pair is called base currency
  3. Bid price: The price which is prepared to buy a currency. At this price you can sell the base currency
  4. Bid/Ask Spread: Difference between the bid and ask price.
  5. Close position: The process to close a position is to buy or sell a certain amount of currency to offset an equal amount of the open position.
  6. Counter currency: The second listed currency in a currency pair.
  7. Currency pair: Two currencies that build up a foreign exchange rate.
  8. Going Long: To purchase a currency for investment.
  9. Going Short: The selling of a forex currency or implement not owned by the seller.
  10. Leverage: The ratio of amount used in a transaction to the required security deposit, otherwise known as margin.
  11. Trading Platform: Platform is set of tools used to trade. It provide real time price of currencies.