While reading our daily articles, News and quotes you come across many repeated words which are central to the Forex word. Today we explain those basic words which you may not be familiar with in a mini Glossary.



Word Directly Related To Trading

Ask Price -The quoted price at which a customer can buy a currency pair (also referred to as the 'offer,' 'ask price,' or 'ask rate').
Bid Price- The price at which a trader can sell a currency pair ( also known as the 'bid price' or 'bid rate'
Pip (or Points) - A Pip is the last decimal place of a quotation. The Pip is how you measure your profit or loss.For example: If EUR/USD is 1.2444 to 1.2446 then we can see here that it has increased by '2 pips'
Spread - It is the difference between the bid and the ask price. Generally speaking, more liquid currency pairs have smaller bid/ask spreads. Less liquid currency pairs have larger spreads.
Stop Order - Forex stop orders are used to exit positions and to protect investments in the event that the market moves against the opened position
Stop Loss Order - An instruction to buy or sell a currency pair when it trades beyond a specified price. During times of extreme volatility it can be difficult or impossible to execute orders
Resistance - A price level at which you would expect selling to take place
Support - A price level at which there is an expectation of buying to take place, a break in the support often leads to lower prices



World's Generally Related to Forex

Back Office - Represents a financial institutions area responsible for settlement, administration and reporting
Bear Market - A period of generally falling prices. Bear - An investor who believes that prices are going down
Broker -Brings the buyers and sellers together for a commission paid by the initiator of the transaction. They do not take market positions
Bull Market - A period of generally rising prices. Bull - An investor who believes that prices are going up
Trend - The direction of price
Central Bank - A country's main regulatory bank; its primary responsibility is development and implementation of the monetary policy
Currency Pair - The two currencies that make up a foreign exchange rate. As an example, EUR/USD is considered a currency pair
G7 - The seven leading industrial countries - United States, Germany, Japan, France, UK, Canada and Italy.
G10 -The ten industrialized nations - G7 countries + Belgium, Netherlands and Sweden. Switzerland is sometimes involved.

By MerexMarkets