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Market Terms

Market Terms
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Forex trading or overall investing activity requires constant learning and practice. Sometimes, understanding forex and general trading terminologies can seem confusing and overwhelming, but you should not feel intimidated. It is important to understand all the relevant key terms, as this will only help you to become a better trader. It can help you to gain further knowledge from more professional sites as well as participate in interesting trader-centric forums.
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Reading, learning, viewing and using forex terms continually will make you more comfortable with trading lingo over time. There are basic and advanced forex glossaries. Basic terminologies will help you get acquainted in the market, whereas more advanced terminologies can even help you to understand sophisticated strategies. To set you off, here are some of the basic terms you should understand:

  • Asset:
    This is anything that can be exchanged in the financial markets. Assets can be bought or sold.
  • Bid/Ask Prices:
    Bid is the price at which the broker or market buys an asset from the trader. It is the price at which the trader sells. Ask is the price at which the broker or market sells an asset to a trader or the price at which the trader buys.
  • Spread:
    This is the cost of opening a trade in the market. It is the difference between the bid and ask prices that the trader pays to the broker.
  • Day Trading:
    This is a strategy of opening and closing one or more trades within a single trading session or day.
  • Swing Trading:
    This is a strategy of holding open trades for a few days up to a few weeks with a view of taking advantage of big price swings in the market.
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