KEYWORD FOREX DEFINITIONS

If you have just started their journey in the world of trading Forex, which will be useful for the definition of some terms you need to know before you start trading. Whether you call it Forex or FX, you're talking about the foreign exchange market. This is where the trading of currencies, against each other, is done. To get an idea of how big is the action, add all the stock exchanges in the world together and the Foreign Exchange dwarfs them all!

When you consider that speculators, hedge funds, large corporations, governments and even, and several private investors to participate in currency trading, it is hardly surprising that this market is so strong and that the estimated average daily turnover of the foreign exchange market is more than 3 trillion U.S. dollars!

Here are some definitions you will want to know before you start trading in Forex market.

1. Spot Trade: This is the purchase or sale of a foreign currency or a commodity for immediate delivery. Spot trades are settled "on site", as opposed to a fixed date in the future. Futures transactions which expires next month, are also called spot trades. The transaction must be resolved within two business days.

2. Lance: It refers to the price at which the buyer is obliged to buy the currency.

It can be compared to an auction, when someone puts his hand to say

they are willing to buy the things they auctioned off the price.

3. Limit Order: This is where you want to give instructions to buy or sell a currency at a specified exchange rate.

4. Inter Bank Rates: This is the launch of exchange rates and international banks that are traded when buying and selling among themselves.

5. Spread: This is the difference between the purchase price and asking for a coin.

6. Stop Loss: occurs when given an order to buy or sell a currency at a price set by the client in a particular trade. If the price is reached, he will quit the position, in particular the price declared.

7. Transaction Date: This is the date that trade in currencies is being done.

8. Date of liquidation: This is the date of exchange of currencies that contracts are settled.