When trading in the forex market, there are certain types of orders that you need to understand. To have the basic understanding of what they are and what they do is crucial to your success in forex trading.
A pip stands for a “point in percentage” and is the smallest amount by which a given currency pair can change. The actual value of a pip varies depending on the size of your trade. A Long position means you buy, and a Short position means selling. The smallest size in currency trading that you can buy or sell is called a Lot. The spread is the difference between the Ask price and the Bid price.
Forex trading is not a game of chance and therefore, you should gain at least basic understanding of the forex market and what factors determine the value of currencies before you start trading. Some of the main factors that can influence the value of currencies are political environments, monetary flows, and economic conditions.
Forex stands for foreign exchange market, also known as fx, or currency market. Forex is a global-scale decentralized trading market for international currencies and financial centers as well as individual private investors around the world, functioning as trading anchors between several foreign currencies. It functions in a similar way as the stock market except that the forex market is an over-the-counter-market where individual investors can trade freely from all over the world, and the market is open all day, 24 hours a day, except for weekends. The forex brokers are typically large-scale international banks and financial institutions.