For instance, if the currency pair EUR/USD is currently being traded at 1.34, you can set a sell order if the price reaches 1.35. The Forex market is open around the clock and offers traders to profit not only on rising prices, but also on falling ones. The order remains until cancelled or executed. In the case A pip can be described as the smallest price change of a currency pair. © 2020 Copyright PMJ Publishing Limited. currencies. A leverage ratio of 100:1 asks for a margin that equals 1% of your position size. A pip represents the fourth decimal place of most currency pairs, but there is an even smaller increment that prices can change. Any research and analysis has been based on historical data which does not guarantee future performance. If the price meets a certain pre-set level, the position is automatically closed, and the trader can collect his/her profits up to that exact point. Some brokers even allow you to trade on nano-lots (100 units of the base currency.) regardless of the exchange rate. Similarly, if you open a position size of $40.000 with a leverage ratio of 100:1 and a trading account size of $1.000, your broker will allocate a margin the size of $400. FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). When Forex traders talk about profits or losses, they usually use the term “pips”. Market orders are the most common type of trading order. Automated software that is used to trade on your behalf. If your free margin drops to zero, you’ll receive a margin call and all your open trades will be closed at the current market rate. Learning these common terms is an essential first step before jumping into this industry. In this case, the Euro is set as the base currency, and the USD is the quote currency. But what about a wider array of other currencies? Average Income of a Swing Trader: How Much Do Swing Traders Make? To me, the Forex market is magic. Thank you! Stay informed with real-time market insights, actionable trade ideas and professional guidance. explain Forex in a plain and simple manner and give you enough information to get started sooner rather than later, in the exciting world of Forex Trading. For more details, including how you can amend your preferences, please read our A spread represents the difference between a currency pair’s ask price and bid price. It’s an order you make to close your trade as soon as it reaches a certain level of loss. For example, if EUR/USD is currently trading at 1.1558 and rises to 1.1562, that rise would equal to a change of 4 pips. Robot trading is usually charged for on a subscription Full Disclosure. trade automatically when a specific price point is reached. Choose from spread-only, fixed commissions plus ultra-low spread, or STP Pro for high volume traders. One pip is equal to 0.0001. By continuing to browse this site, you give consent for cookies to be used. Each time we place a trade in the market, we have to trade on currency pairs. The point at which you exit your trade. With this type of order, the trader ensures that he or she at least gains some profit even though there might be a possibility for additional gains. Trader's Glossary, you can read the meanings, abbreviations and acronyms behind a huge number of terms whenever you choose. Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. Admiral Markets Cyprus Ltd is registered in Cyprus – with company registration number 310328 at the Department of the Registrar of Companies and Official Receiver. So, you want to become a day trader and join the hundreds of thousands of day traders who are living in the UK? It’s also known as the offer price and is the price at which your broker will sell a specific currency pair to you. In other words, a support level is a previous low at which the price has a large chance to retrace and move up. If you’re a day trader or scalper, you need to pay attention to the bid/ask spread since it can eat a large portion of your profits at the end of the day. An instruction to a broker from a trader to execute a trade. To trade, a trader requires margin. Read on for our trading basics guide to minimise the risks and avoid the common pitfalls of initiate traders. Just like support levels, resistance levels are also a crucial tool in a technical trader’s toolbox. understand the various terms, we have put together this useful glossary. These products may not be suitable for all clients therefore ensure you understand the risks and seek independent advice. Admiral Markets Cyprus Ltd authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC), license number 201/13. available to place the trades for you based on what is the most likely outcome. The content provided by Irek Piekarski and Piekarski Research International Ltd. does not include financial advice, guidance or recommendations to take, or not to take, any trades, investments or decisions in relation to any matter.