Forex is the Foreign Exchange market where one currency is traded for another. Currencies are traded in pairs such as EUR/USD, GBP/USD, etc.
In Forex there is no fixed time factor — a trade will end either by reaching the Take Profit or Stop Loss level. Forex can be traded 24 hours a day and 5 days a week.
If the market moves upwards after your entry, you are in profit.
If the market moves downwards after your entry, you are in profit.
EUR/USD — EURO is the base currency & USD is the quote currency.
EUR/USD = 1.1390 means 1 EURO = 1.1390 USD.
The record of the highest price within a particular timeframe from the opening to closing of that candlestick.
The record of the lowest price within a particular timeframe from the opening to closing of that candlestick.
The open price of the market for any currency pair in a certain timeframe.
The close price of the market for any currency pair in a certain timeframe.
A Pip (Point) is the smallest price move that a given exchange rate makes based on market convention. For most pairs, pips are calculated at the 4th decimal place; for JPY pairs, at the 2nd decimal place.
Current Price − Ordered Price
Ordered Price − Current Price
All currency pairs except JPY are calculated at the 4th decimal place. JPY pairs are always calculated at the 2nd decimal place.
Lot Size — the smallest amount/quantity for exchanging currencies:
| Lot Type | Size | Units | 1 Pip Value | 10 Pips P/L |
|---|---|---|---|---|
| Standard Lot | 1.0 Lot | 100,000 units | $10 | $100 |
| Mini Lot | 0.1 Lot | 10,000 units | $1 | $10 |
| Micro Lot | 0.01 Lot | 1,000 units | $0.10 | $1 |
Borrowed capital used to increase the potential return on investment. Leverage is commonly available in ratios such as 1:50, 1:100, 1:250, and 1:500.
A good-faith deposit required to open an order. Margin is temporarily held by the brokerage until the order is closed or settled, at which point it is credited back to your balance.