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Financial Trading

Written by ForexCult Team
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Financial Trading When it comes to financial trading, it is important that you take the time to learn the terms that are associated with financial trading. When you are a beginner in the market it is important that you take the time to learn these terms so that you will be able to know the language that is spoken in the forex market. If you don’t learn these terms you with be lost and you may end up making mistakes that could cost you a lot of money in the long run and I know that you don’t want to do that. In the following article, I am going to tell you about a few terms that are associated with financial trading. You can determine how you will go about learning these terms because many people learn in different ways than others do. I recommend that you put these terms and definitions on index cards and use them to refresh your memory over and over again. You can put the term on the front and the definition on the back so that you can try to say what the term means before you actually look at the definition. This is the easiest way that I know to learn them but if you have another way then you should go ahead and go with your own personal way first. Financial Trading Terms The first term that I am going to tell you about that is related to financial trading is the term foreign exchange which is also referred to as forex; this term is used to describe the actual purchasing of one currency and the actual selling of another currency. The second term that I would like to tell you about is the term foreign exchange market which is used to describe the actual market in which these foreign currencies are indeed traded, when I say traded I mean bought and sold. The actual exchange rates are also figured out here in the foreign exchange market as well. Another term that you will need to learn is the spot market which is also referred to as the cash market because of the fact that the prices are actually settled with cash on the actual spot with the market prices that are current. It is known that the cash market or spot foreign exchange market is the largest financial market as well as the most liquid market as well. One of the terms that you are going to become familiar with is the terms exchange rate and this term is used to describe the actual value of a particular currency in relationship with another currency. Financial Trading Terms That You Should Know In this paragraph, I am going to continue to tell you about the terms that are related to financial trading in hopes that you will be able to become aware of all of them so that you can be successful in the market. The term that I would like to talk with you first about is the term currency pair, the reason that this word is so common is because of the fact that the currencies that are traded on the market are always found quoted in pairs. This particular pair is known to make up the exchange rate. When it comes to a currency pair you will find that when one currency is purchased the other currency is sold and visa versa. When you take a look at the currency pair, there are two different parts, the first part is known as the base currency and the second part is known as the counter currency. Now lets take a look at the spread, when it comes to the spread, the spread is the actual difference that takes place between the two parts of the price which are the bid and the ask of a currency that is shown in pips. You will notice that when you have a smaller spread, this is better for the individual trader. When you hear the term pip you should know that it is used to refer to the smallest increment in the price that is located in a currency. When you hear the term pip value, you should know that these terms are used to state the value of the pip in the actual dollar value. When it comes to financial trading, you don’t have to know all of these terms. However, in order to be successful with financial trading you are going to have to be aware of the terms that are associated with financial trading. I know that you may think that you don’t need to know the terms that are associated with financial trading but you do and you will find that there is even more information that you are going to need to know that is related to financial trading as well. Financial trading doesn’t have to be stressful, financial trading doesn’t have to be complicated, financial trading is what you make it out to be. If you look at financial trading with a positive outlook then you are going to get positive results.