Every Trader Should Be Familiar With These Forex Terms
Familiarize yourself with key terms that every FX trader should be aware of in order to help them build their knowledge.
The Forex industry is so full of unusual terms, acronyms, and words that it can easily send us into a tailspin.

Getting used to new trading platforms, such as MT4, MT5, and others can be difficult enough.
When combined with foreign terminology, not understanding such trading language can be a significant impediment to a trader's journey and profitability.

Pair of currencies
There are 180 recognized currencies in circulation, with 195 countries using them. As traders, we can speculate on the performance of a specific currency by conducting various analyses and research to determine how that currency will perform in the market.

The way we trade these currencies is based on the performance of one currency versus another – Forex Trading.

When choosing a currency to trade, you will notice that it is available in pairs. As an example, consider the EUR/USD pair.

Price Bid/Ask
A trader's bid price is the price at which he or she is willing to sell a currency pair.

The ask price is the price at which a trader will purchase a currency pair.

These prices are displayed in the 'Market Watch' section on the left side of MT4.

The spread is the difference between the bid and ask prices.

Going Long / Going Short
When a trader goes long on a currency pair, the first half of the pair is purchased while the second half is sold. Going long, or purchasing a currency, indicates that you anticipate the price rising.

AUD / USD, for example

Purchasing the Australian Dollar against the US Dollar with the expectation that the price of the AUD will rise.

When a trader goes short, the first currency is sold and the second currency is purchased.

Going short means selling one half of a currency pair in the hopes of seeing the price fall.


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