Trading Dictionary
We offer you all that matters to the forex trader from terms that may lose his meaning from his mind to get to know the trading world.
Forex: It is the foreign exchange market, and it is one of the most famous and largest financial markets and the Hugest in terms of liquidity. Forex is traded through the exchange of currencies and taking advantage of the price differences between buying and selling.
Trade: It is simply the exchange of one thing for another, that is, the exchange of a commodity for money, or in other words, the purchase of something.
Leverage: It is the doubling of your invested amount so that you can make good profits in the forex market.
Pip: is the unit of size of the movement in the exchange rate between two currencies.
Lot: The number of currency units, a standard lot equals 100,000 units of the base currency/your account currency
Ask: it is the price at which you can buy and it is the top line in chart.
Bid: it is the price at which you can sell and it is the bottom line in chart.
Spread: It is the difference between the buying and selling or the ask line and bid line for any currency pair, commodities, stocks, and others. Which is the number of points between the two operations.
Balance: It is the balance of your account deposited before opening any order.
Credit: It is the Bonus amount granted by the company and is not withdrawable.
Equity: It is the sum of the balance and the Credit in your account and during opening any order.
Margin: It is the amount reserved from your account when opening any order.
Free Margin: It is the remaining amount in your account after opening any order and after deducting the margin.
Margin call: It is when there is no longer enough money in your account to keep the current order open and a margin call occurs when the market price drops more than the money in your account.
Currency: It is divided into two currencies, and the first currency pair is called the base currency and the other is the counter currency, which is the second currency in any pair and is often called the point currency.
Base currency: The first currency in a currency pair, also referred to as the filter or top number.
Quote currency: The second currency in a currency pair, it is also referred to as the common denominator or the bottom number.
Bulls: It is a term given to traders who want to buy and seek to rise in a particular pair of currencies of other commodities, and they were called by this name because they push the price up.
Bears: It is a term given to traders who want to sell and seek to drop a particular pair of currencies or other commodities. They were named by this name because the bear can repel the bull’s attack and throw it to the ground.
Stop Loss: It is a market order used to close a losing trade as soon as it reaches a certain level and is achieved when the ask line is touched.
Take profit: It is a market order used to close a profitable deal as soon as it reaches a certain level and is achieved when it touches the Bid line of the order.
Buy limit: It is a purchase transaction at a price lower than the current price and is achieved when it touches the Bid line of the order.
Sell limit: It is the process of selling from a price higher than the current price and it is achieved when it touches the Ask line of the order.
Buy stop: It is a buying process at a price higher than the current price and is achieved when the Bid line of the order touches.
Sell stop: It is the process of selling from a price lower than the current price and it is achieved when the Ask line touches the order.
Trailing Stop: It is the process of successive stop loss and controlling the stop loss order, and it is achieved when the Ask line touches the order.
Sell stop limit: is a process that combines the two orders sell stop and sell limit, and the two orders are activated when the ASK line touches the specified price
Buy stop limit: is a process that combines the buy stop and buy limit orders, and the two orders are activated when the BID line touches the specified price
IB: He is a partner of the broker and gets a sum of money by referring people to register in the company.
PAMM: Percentage Allocation Money Management is the management of trading accounts by professional account managers.
ECN: It is an abbreviation of Electronic Communication Network. It is the network that connects traders directly with liquidity providers such as banks and major financial institutions, and this means that the client’s orders are displayed on the market directly without the intervention of the broker.
VPS: is the abbreviation of Virtual Private Server is used by Internet hosting services and these virtual servers are dedicated to the needs of individual clients in the field of trading or other.
Spot: It is the price of the current moment, and it is organized through its own market, and these markets have their users according to their needs.
Future: Contracts that contain a delivery date, and there are two contracting parties, a party that sells and a party that buys, and a specific delivery date is agreed upon.
Important Equations
We offer you everything that matters to the forex trader from the equations that he may need to know to enter successful deals in the world of trading
🔸 Used Margin For Currencies
Contract Size / Leverage * Trade Size
🔸 Free Margin For Currencies
Balance – Used Margin
🔸 Margin Level Calculation For Currencies
Balance / Margin * 100
🔸 Pip Calculation For Currency
Lot Size * Number of Pips / Current Price
