Common Forex Terms
As a beginner trader it is important for you to learn the basic commonly used terms in forex trading.
What are Pips?
Pip, the price interest point, refers to a unit of change in an exchange rate of a currency pair. Most major currencies are generally priced to four decimal places. A pip is one unit of the fourth decimal point.
What is Volume?
The Volume is the number or value of securities traded over a specified period of time.
What is Margin?
Margin is the back-up that is given by clients to insure forward transactions and day trading transactions that are carried out on credit.
What is Margin Call?
A Margin Call is a request from a broker or dealer for an investor to give additional cash or other securities as collateral, or decrease his current exposure to bring the margin up to a necessary level.
What is Margin Level?
Margin Level is account balance calculated in the following way: (Equity / Margin)*100%.
What is Base Currency?
The Base Currency is the currency against which the other currencies are quoted. One unit of the Base Currency is equal to X units of the secondary currency.
What is Currency Pair?
Two currencies that make up a foreign exchange rate, for example EUR/USD.