Understanding The Terms For Currency Trading India
Are you planning to venture on forex trading in India or foreign exchange? If yes then you need to first learn currency trading India basics. In forex, you will understand how buying and selling of currencies are effectively done therefore there are certain terms and words that you need to be familiar with. You will get assistance in the flow of things after knowing the terminology commonly used in the trading market by other traders. Getting into the forex trading venture without knowing even a single word is like entering a battle without any weapon. Below are some of the important terms you must understand before currency trading India.
Currency Pair
two types of currency or money traded with one another refers to currency pair. As long as currencies are available in the forex market you are participating in, you can practically any kind of currency with another one. There are seven types of currencies mainly traded namely US dollars, Canadian dollars, Euros, Australian dollars, Euros, Mexican pesos and Japanese yen. Currencies move up and down with each other and there is no independent standard on how much a particular currency is so the market is constantly unstable.
Bid
It is the price for buying an exchange.
Ask
It is the price for selling an exchange.
Spread
The disparity between bid and ask is referred as Spread. If you are a trader, then the broker, who will attach a spread to the currency you are trading is the one you should choose. This is how a broker earns profits. Look out for deals with low brokerage. In the pair you are trading, you need to that it is important that you watch out for the numbers. if the currency you have has a number that is higher, than the one, you are planning to trade for then you are certain to make profits. you will lose money if the opposite happens.
Margin And Leverage
A trader puts up this deposit in good faith, as a form of collateral to be able to hold his position in trading. Your leverage will be determined by how much margin you have put up. you are basically putting down your margin in order to receive leverage if you have put up a margin that is more than the necessary amount to open a position. Leverage, thus, is the money you are controlling with relative to your margin.
Pip
The last digit in the price of an exchange is this Percentage in Point or Pip. Suppose Euro against US dollar is 1.3746. There is 3pip increase if selling price is 1.3749. Pip increase is 100, if selling price is 1.4746. In the foreign exchange market, Pip is the smallest unit.
Stop Loss
you can expect to minimize your possible losses, not considering the direction the market is heading for, if you have set up the stop loss accordingly. At certain estimation, there is a regular stop loss remains in between two currencies. Regardless of how high regular stop loss will reach, there is also the trailing stop loss that continues along with your position. The decent amount of profits you have earned will be protected by this trailing stop loss.
Currency trading India has big prospects. One just needs to have the right understanding of the market to reap gains. Deals with low brokerage will help a lot on this regard.
Currency Pair
two types of currency or money traded with one another refers to currency pair. As long as currencies are available in the forex market you are participating in, you can practically any kind of currency with another one. There are seven types of currencies mainly traded namely US dollars, Canadian dollars, Euros, Australian dollars, Euros, Mexican pesos and Japanese yen. Currencies move up and down with each other and there is no independent standard on how much a particular currency is so the market is constantly unstable.
Bid
It is the price for buying an exchange.
Ask
It is the price for selling an exchange.
Spread
The disparity between bid and ask is referred as Spread. If you are a trader, then the broker, who will attach a spread to the currency you are trading is the one you should choose. This is how a broker earns profits. Look out for deals with low brokerage. In the pair you are trading, you need to that it is important that you watch out for the numbers. if the currency you have has a number that is higher, than the one, you are planning to trade for then you are certain to make profits. you will lose money if the opposite happens.
Margin And Leverage
A trader puts up this deposit in good faith, as a form of collateral to be able to hold his position in trading. Your leverage will be determined by how much margin you have put up. you are basically putting down your margin in order to receive leverage if you have put up a margin that is more than the necessary amount to open a position. Leverage, thus, is the money you are controlling with relative to your margin.
Pip
The last digit in the price of an exchange is this Percentage in Point or Pip. Suppose Euro against US dollar is 1.3746. There is 3pip increase if selling price is 1.3749. Pip increase is 100, if selling price is 1.4746. In the foreign exchange market, Pip is the smallest unit.
Stop Loss
you can expect to minimize your possible losses, not considering the direction the market is heading for, if you have set up the stop loss accordingly. At certain estimation, there is a regular stop loss remains in between two currencies. Regardless of how high regular stop loss will reach, there is also the trailing stop loss that continues along with your position. The decent amount of profits you have earned will be protected by this trailing stop loss.
Currency trading India has big prospects. One just needs to have the right understanding of the market to reap gains. Deals with low brokerage will help a lot on this regard.
