Forex Terminology
Key Terms
– **Pips**: The smallest price move in a currency pair. For most pairs, a pip is 0.0001.
– **Lots**: Standard trading size in forex. A standard lot is 100,000 units of the base currency.
– **Leverage**: Allows traders to control a large position with a small amount of capital (e.g., 1:100 leverage).
– **Spread**: The difference between the bid (buy) and ask (sell) price.
– **Margin**: The required amount of funds needed to open a position.
– **Rollover**: The interest paid or received for holding a position overnight.
– **Market Conditions**:
– **Bullish Market**: A market condition where prices are expected to rise.
– **Bearish Market**: A market condition where prices are expected to fall.