As a beginner of forex trader, we exactly still have not understood some terms related to forex trading. Pips, leverage, margin, and such kinds of terms perhaps make new forextraders confused. Actually, this kind of problems
will disturb us in doing the transaction. Perhaps there is someone
among us who still do not know what forex itself? Let’s understand
the forex first before continuing to the terms that related to
it. Forex is an abbreviation of Foreign Exchange. This is a transaction
in trading the currencies. Actually, most participants of this trading
are big international banks. This market is helping international trade
and asset by allowing currencies exchange.
In forex trading there are some terms that we have to be familiar with. Here is just few of them. The first term is pip. Pip is the moving of the price. It is usually used to mention the rate nominal or also known as points. For instance, if the rate is change from 14255 to 14265, it means that the pair has increased 10 pips. The second term is lot. Lot is standard unit transaction in forex trading. So, if we buy USD toward CHF, it will be measured with lot.
The next term is margin. Margin is a quantity of money needed in our account to maintain our trades’ available on the markets. It is functioned like a mortgage in a forex trading. Leverage is functioned as a controller in forex trading. It is a ratio to decide how large the margin needed in doing a transaction. You should also know about contract size. This is about the largeness of multiplier in profit and loss calculation. The quantity has been decided by the government to be ten thousand rupiah.
In forex trading there are some terms that we have to be familiar with. Here is just few of them. The first term is pip. Pip is the moving of the price. It is usually used to mention the rate nominal or also known as points. For instance, if the rate is change from 14255 to 14265, it means that the pair has increased 10 pips. The second term is lot. Lot is standard unit transaction in forex trading. So, if we buy USD toward CHF, it will be measured with lot.
The next term is margin. Margin is a quantity of money needed in our account to maintain our trades’ available on the markets. It is functioned like a mortgage in a forex trading. Leverage is functioned as a controller in forex trading. It is a ratio to decide how large the margin needed in doing a transaction. You should also know about contract size. This is about the largeness of multiplier in profit and loss calculation. The quantity has been decided by the government to be ten thousand rupiah.