Forex Terms That You Must Be Familiar With While Using Online Forex Trading

Forex terms and meanings
Knowing the basics is very important in online forex trading. It is the knowledge of the basic terms and basic procedures that help traders, especially beginners to make proper trades within the forex market. The following are some of the basic terms that can be useful in online forex trading, especially if you are a beginner.
• Going long: it is the process where the trader buys a certain currency, anticipating an increase in its monetary value. In such trades, it is believed that the money value will change within hours. So once the money value goes up, the trades will sell those currencies for making a profit.
• Going short: it is the process where the trader sells a certain currency, anticipating a decrease in its monetary value. In such cases, those currencies will be repurchased with a much lower monetary value.
• Currency pair: forex trading means the exchange of currency. It means one currency is bought and another one is sold at the same time. Forex trading takes place in pairs. For example, take the pair USD/GBP = $1.15. In this case, the U S dollar (USD) is the base currency and Great Britain Pound (GBP) is the counter currency. If a trader wishes to buy GBP, they have to spend $ 1.15 for each pound.
• The ask: it is the term that represents the price during the purchase of the currency. It means this term represents the amount the trader must pay while purchasing a currency pair.
• The bid: it is the term that represents the price during the selling of the currency. It means this term represents the amount the trader must pay while selling a currency pair.
• The spread: this term shows the difference between the selling and buying price of the currencies.