Online commodity trading is becoming a more widely practiced system in our world today. Forex trading and currency trading has grown from trading 500 billion US dollars per day in 1989 to trading around 1.5 trillion US dollars per day in 2008. With this rapid growth in numbers and trading rates, it is important for those who enjoy Forex trading or who do it for a living to know terminology regarding trading.
So whether you are looking to start Forex trading, you are a veteran trader or you just would like a nice list of terms, here are some basic words and terms that are used commonly within Forex trading markets and other such online market trading circles.
The “Bid or Ask Spread” is the difference between what was asked for the currency and what is offered.
A “Bear market” is a market in which funds are declining or becoming less profitable.
A “Bull market” is the opposite of a bear market.
This market is where the funds are increasing or becoming more lucrative.
The “contract” is generally the standard with which traders use to trade.
When a currency grows stronger, this is referred to as an “appreciation”.
“Day trading” is trading that happens within one day. All deals are opened and closed within the same day.
“Currency” is the unit used to exchange money.
“Fundamental analysis” refers to the ability to determine what the market’s value will be in the future.
“Inflation” is determined by the economy and when it grows higher, the consumer’s power is lowered.
“Maturity” is when a financial investment expires or is able to be collected.
“Offers” are that which the seller says they will sell their product.
This price is due to change depending on the response of the buyer.
“Risk” is the possibly for loss.
The “Technical analysis” is what the historical market has been. Reading technical analysis will help you know what might happen in the future by reading the past.
“Transaction cost” refers to the amount it costs you to complete a transaction. This could be charges by the institution you are using to make the trade or other such costs.
A “Quote” is the perceived price of something. It is not necessarily the exact price for an item but gives a general idea of what the item may cost for advertising and such purposes.
A “Commission” is the payment or charge the broker or dealer requires for their services.
A “deficit” is the decline in a currency’s worth.
These few terms are important for anyone who is involved in market trading to know and memorize. They are used frequently and people will expect you to be able to use them in general conversation. For more terminology and trading tips, you can find much information on your favorite search engine or even in market trading classes. For anything from Forex market trading, to the New York Stock Exchange to Online Commodity trading, be sure to know your terminology and lingo!