Learning of the forex language is primarily required for the beginning of the forex journey. Let’s start with these important forex terms. You can also find additional information on the best online forex trading platform review at www.ForexSmartTrade.com
A type of account that a trader uses to make money is known as a forex account. Based on the lot size, forex accounts consists of three types:
Micro forex accounts: this type of forex accounts grant the permission of trading almost 1,000 USD of currencies per lot.
Mini forex accounts: this type of forex accounts permits the trading of nearly 10,000usd per lot.
Standard forex accounts: A trader tends to trade up to 100,000 USD per lot in this type of forex accounts.
Note: the limitation for trading each lot also involves margin money utilized for leverage. This means that the trader can offer a pre-determined amount of capital. For instance, if you put $1 for trading, they may raise it to $100. This means that for trading over 1,000usd, you can use only $10.
A price at which a trader buys a currency pair by his choice is the ask price. For instance, for GBP, if you put an ask price of 1.3891 USD, then the amount is lesser than you pay for a pound in American dollars as per your choice. The ask price is typically greater than the bid price.
A price at which a trader sells a currency pair by his choice. In a given currency, the market maker is obliged to repeatedly set up bids about the buyer’s questions. Generally, bid prices are lesser than ask prices; when demand is higher, ask prices get lower than bid prices.
In the bear market, one experiences a prolonged decline in the prices of almost all currencies. It typically manifests a drop in the market, which results in significant catastrophic events like natural calamities or economic problems.
A bull market is one in which prices increase for all currencies. Bull markets signify a market uptrend and are the result of optimistic news about the global economy.
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