Forex Glossary Of Terms

As I am sure we in the family would be interested to invest someday, I strongly believe that forex trading is the way to go. Think of the sales-pitch of High Finance Woman, the spunk of Bodoy and the cashflow -management of Tokak Suave, wow what a great combination! So here goes some details we all need to learn for the moment...

High Reward, Low Risk Forex Trading  is the way to go But before we go on  this new venture, we need to brush up on our forex terms knowledge.

Forex terms is one of the first steps to take before entering the Forex market.
Pip

The pip is the basic increment of price movement in any Forex market. The value of a pip may vary depending on the currency market and the size of the contract being traded.
Currency Pair

Each individual Forex market is a combination of two currencies. The price of a currency pair represents the exchange rate between the two currencies. Some examples of currency pairs are the EUR/USD, USD/JPY and GBP/USD.
Base CurrencyThe base currency is the first currency listed in a currency pair. When Forex traders buy or sell a currency pair, they are buying or selling the base currency against the quote currency. In the EUR/USD (euro/dollar), the euro is the base currency.
Quote Currency

The quote currency is the second currency listed in a currency pair. The value of the base currency is 'quoted' in terms of its value relative to the quote currency. In the EUR/USD, the dollar is the quote currency.

Bid

The bid is the price at which traders may sell a currency pair in Forex.
Ask

The ask is the price at which traders may buy a currency pair in Forex.
Bid/Ask Spread

The bid/ask spread, often referred to simply as 'the spread,' is the price difference between the bid and ask price in a Forex market. It is measured in pips. For example, if the bid for the EUR/USD is 1.4656 and the ask is 1.4658, the spread is two pips.
Rollover

Rollover is interest that is credited or debited to your account when holding a position overnight. The rollover reflects interest rate differences between two currencies in a currency pair.