Some Forex Terms you need to know

OK, I did promise there is a dictionary of terms that we can access every time for foreign terms in forex. But there are terms that are absolutely important to understand. So, out of the dictionary I created we do not read the better I write it hereinstead.

The first is called "Pip pip" is commonly used in mentioned the value of an exchange rate or also called "points". For example: USD/CHF last week was worth 1.4235 and today rose to 1.4245» it means the pair suffered rising as much as 10 pips. Well, understand ..?

The other thing we need to know is that his name is "leverage". This is more or less the same meaning with "margin collateral" at stake. Simply put is when we infusecapital is Rp. 5 million when the unit is subjected to leverage 1:100 means that we are given the rights by the brokerage to buy 100 x greater than the funds that we have.Mean with money amounting to Rp. 5 million, we are given funds to purchase foreign currencies amounted to Rp. 500 million rupiah. Well it's called collateral margin orleverage. Every broker has its own leveragenya. In this case, the large leverage means the possibility of profit/loss became bigger. Likewise, the small leverage then the magnitude of the losses that might occur with the consequences become smalleradvantages also become smaller in value.

I myself prefer a little leverage because with such a smaller risk of loss. If I believe atransaction will be menguintungkan, then I can bring up the number of lots that will be me are operating with.

Then next is the "contract size". This is the magnitude of the multiplier in calculating profit and loss. The value is already set by the Government and fix that is 10,000 (ten thousand).

The next thing is a "lot" of the Lot is the contract on any transactions. So when ITransact, for example purchase (buy) USD against CHF the value unit in the lot. Againeach broker has its own rules in determining the lot, relying on the pip and levereragethem. On AsiaFXOnline, a lot of the transaction's value is $ 1 million.

Yes, that's some simple terms you need to understand, again we remind if you findthe term that you don't understand, please open the link Forex Dictionary that contains a complete Dictionary of terms used in Forex Trading