What is leverage in forex trading?
What does a point difference mean?
What is the margin about?
When your friends ask you about foreign exchange, it can be very embarrassing if you don’t come back with the above questions.
In contact with a new industry or skill, the most basic is: you need to understand and learn the relevant jargon, just like we learn classical Chinese, to understand the most basic concepts of the text, to be able to understand the article.
As a forex investor or trader, there are certain technical terms you must learn before entering the forex market.
Today the author will be the most complete trading terms summary for you to see, I hope to help the big guy.
What is two-way trading business?
A two-way trade means that the buying price can go down or the buying price can go down.
There are profit opportunities regardless of the price fall or fall.
What is T+0 trading business?
The T+0T refers to the date of the transaction.
Any trading track system that is cleared and settled on the same day as the transaction is called T+0 business.
What is margin trading?
The so-called margin trading (commonly known as virtual trading in China) is a pattern in which a trader allows the broker to take a sum of money deposited in the broker’s account at that time as a guarantee that the transaction may be lost, and signs a trading contract to fulfill the business.
This collateral is called a margin.
What is a forced closing?
A loss greater than the amount of money available in your account after margin is removed.
Due to the platform forced to close the remaining funds after the total capital minus your losses, individual is a part of the remaining.
Standard formula: Net value of user account ¡Â margin of open position = risk rate.
What is a trading position or position?
A market contract that commits an initial position in a business contract. The buyer of the contract is a long;
A sell contract is a short position.
What is a short, short, or short position?
A trade in which a currency or option contract is sold at the current market price in anticipation of a future decline in the market price, and then covered when the price falls behind.
What is long, buy, long?
A trader buys a certain amount of money at the current price in anticipation of future market price increases, and when the exchange rate falls behind for some time, hedges his contract position at a cheaper price, thus earning his cost.
This way belongs to the trading pattern of buy and sell;
Shorts are just the opposite.
What is liquidation, hedging?
Closing a previously bought (sold) currency position by selling (buying) the same currency.
What is opening/building a position?
When the movement of the market and their own analysis suits, or investors feel that today is an opportunity to enter the market, may consider entering the business.
What is a liquidation?
The so-called liquidation is for the lock position, in the lock position state, investors in a single direction to close out the multiple or short single is called liquidation, of course, if the same number of multiple and short single are also called liquidation.
What is unwinding?
Liquidation requires a reverse order. If the previous position is bullish, it should be sold at the target and vice versa.
At $660 an ounce, say, investors should aim for $665.
When the price falls to $665 / oz, the investor senses the target price and can sell a position at $665 / oz.
At this point, the account is empty.
What is loading?
The direction of the market has been agreed to the case, their own single look at the direction, investors can play a certain trend can perhaps consider adding positions, but in the bottom of their own position is guaranteed, the bottom of the position is too shallow do not consider.
What is price change margin?
A margin that a customer must post when the price falls below the percentage specified in the contract price.
What is booking and withdrawal?
Often encounter the environment is after 1:30 in the morning to rest or have something to go out, you can perhaps decide to list, list is also called declaration, is wish itself in what price to buy and sell, then the price reporting system waiting for a deal, at the same time, but also report a list deadline;
Cancellation is the cancellation of an order that has been posted.
What is the elimination of billing?
Investors in advance to close positions or forecast that the market will break the target price can perhaps consider the previous setting of orders cancelled, waiting for the outbreak of the market.
If the investor fails to eliminate the order in time, their own early liquidation of the case, the order is still valid, once the target price is reached, the order will be immediately effective, then you will open a new position.
So investors should pay attention to: control must keep a clear mind!
What is a stop profit and a stop loss?
Investors need to adopt the idea that when you enter, you already know when to leave.
So when investors jump in at a certain level — both at the right and the right — they must have both a target and a stop-loss point in mind.
As the old saying goes: don’t spend all your money on one gamble.
Stop profit and stop loss can be set in mind, one to the target price judgment performance;
You can also set up the order, depending on the specific situation.
What is a lock-up?
The so-called lock-in refers to an operation strategy in which investors lock out the profits or losses of their positions when the market direction is unknown in the process of trading, so that market price fluctuations have no relationship with their profits or losses. The main operation modes are as follows:
Sell (short) the same number of orders as the multiple orders (hold multiple orders), or buy (long) the same number of orders as the short orders (hold short orders).
Lock warehouse is divided into two situations: lock profit, lock loss.
What is lock profit?
Lock up the existing profits from the warehouse receipt, e.g.
The former CNOOC (10) placed a multi-order position at a price of 2000 and the current market price of 3000. If it placed a short order at the current price, the profit between 2000 and 3000 would be locked. When the market price rises to 4000 or even 5000, the profit difference of its position would still be 1000 points.
The profit spread on the receipt is still 1000 points.
The same goes for locking losses.
Summary: The process of foreign exchange trading more or less involves some professional terms, which are slightly different from our daily language. If you are a novice, you may be confused. Today, the author gives you the summary of basic foreign exchange terms, you should be clear!
