Like in any other specified field, without a firm grasp of the language and terminology, the likelihood of success is bleak. While forex trading is relatively new, many terms overlap with others in the investing and financial sector. However, forex/currency trading has introduced some new words and terms of its own. Forex Language Agent Bank: A bank which acts for another bank. Aggregate Demand: The total demand for goods and services in an economy, both through importing and exporting. Aggregate Risk: A bank’s vulnerability to forex contracts from an individual customer. Agio: The fee incurred to exchange money from currencies. Algorithmic Trader: An automated trader(employed by many forex brokers) whose trading structure is based on complicated mathematical systems. At Best: Orders given to a dealer or fx broker to transact at the best price possible. Aussie: The name for the Australian Dollar. Bank Note: The central bank issued paper…money. Bar Charts: A system for studying the fluctuations of currency pairs. Bid: The price at which the trader wants to buy a currency pair. Buy Limit Order: A command to purchase at a specific price, or lower. Carry Currencies: Currencies with a higher interest rate. Capital Risk: A risk when a bank has to deal with another bank, or financial entity, that may not be able to uphold its part in the transaction. Chartist: No, not a fortune teller, well, sort of. Someone who uses charts of past movements to predict future ups and downs. Cross Deal: A forex deal in which neither of the paired currency is the U.S. dollar. Currency Pair: The two currencies involved in a forex trading deal; such as EUR/USD. Day Trade: A trade that is opened and closed on the same date. Day Trader: A trader, or forex broker, that tries to profit from short-term fluctuations in prices. Usually from open to close on the same day. And we’ve only gotten to the D’s, still in this small sampling, one can see that if you want to learn the language of forex trading, one will have to put in the time and effort. Paul is a financial writer and journalist. He recommends anyone looking to start online forex trading please do your research and make informed decisions.
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