The Tower of Forex – Reaching each other using Terminology
Written by Tom K Kearns on November 22nd, 2009 in Investment.
If it is not enough that God came down from the heavens to see the Tower of Babel, and then separate each soul by a foreign language so that they could not talk to one another but now here lies a terminology, a language, to be used amongst the masses of foreign exchange so that they can understand one another leaving non-Forex citizens out of the loop.
As I set out to learn the language of the Forex player’s world all I heard at first was babble. It all seemed to make perfect sense to the foreign exchange inhabitants. It is a language of shortened phrases, acronyms, and idioms that explain what is needed during the speeches of exchanges and trades. It is a language known best by traders. One that must be known and understood by any new or experience Forex civilian.
To not be prepped and educated in the use of this speech, to communicate with fellow speakers, will leave you out in the cold. A career of a Forex trader can be laid to rest if there is confusion of the terminology or an unawareness of the sayings they use. That is for now.
The leading financial market of the world is the Forex market which trades all global currencies in real time. A basic understanding of the language is a must to succeed at all in the Forex market.
Basic terminology
The basic terminology of the Forex globe, in the least, must be known to get by.
Bullish, if you are bullish you have a general tendency to trade on the long side of a currency pair and believe that pair will increase in price.
Bearish is having a general tendency to trade on the short side of a currency pair and believing that pair will decrease in price.
Going long refers to buying a currency pair with the hope that the price will go up.
Going short means that you sell a currency that is not yet owned by you, the trader. The hope here is that the price will go down and you can but the currency pair back at a lower price than you sold it at.
5) Pip- a popular word meaning the smallest price change a currency pair can make. Generally it is equal to 10USD on full size lots of 100,000.
The offering of information to the seller on the variety of prices being offered is Range. It also the highest and lowest prices of the currencies.
The full range of definitions for the Forex language can be found on many websites and dictionaries. If an interest exists in a career of Forex trading you must be full prepped on the terminology needed for conversation. If not you will be separated from your fellow Forex inhabitants by the language of terminology. This surely is not wanted.
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