FOREX

The FOReign EXchange, the cash foreign currency business.   This business of trading in cash currency around the world is necessary and has been a viable way for major banks and businesses to protect themselves from exchange rate risk for probably hundreds of years.  It is an important and legitimate business, and has always been done through world banks.

Then came the speculator and along with that came the "trading" in cash currency.  Still done through the banks and even through some honest clearing firms that handled the business as a service to their securities or futures trading customers.  The commissions charged on such transactions varied, of course, but for the most part the fees were very reasonable, and in a case known personally the charge was $35 for each full contract of the currency traded as a cash transaction.  There was also the "spread" between the bid and ask price of the cash contract exchange rate.  This difference was usually equal to a cost of between $25 and $50 depending upon the supply of, or the demand for the particular currency involved. 

Signals

Forex signals providers gives you exact entry, stop, profit and limit orders. You receive alerts by email or SMS, or directly on your desktop through a software, or in your trading platform. You can even have the signals autotraded if this service is provided. Use only reliable and trusted companies.

Dictionary

Base currency
This is the first currency of a currency pair. Example : EUR/USD. The Euro is the base currency. For every trade, you always buy or sell the base currency.
Broker
This is the company that will provide you the forex trading service. You open and fund an account and start to trade. Each broker has its own prices, spreads, minimum requirements (amount of money to start trading). Brokers generally offer a demo account and also have some training programs. See a list of Forex Brokers we recommend.
Exchange rate
The exchange rate tells how much a currency is worth in terms of another currency. Example In the pair EUR/USD, the exchange rate is 1.30. This means 1 euro (base currency) is worth $1.30. SO you can buy $1 .30 dollar with 1 euro, or sell 1 euro for $1.30.
Leverage
This is what allow small investors to trade big lots. Forex brokers have leverage of 100:1 or 200:1. This means you can use $100 to trade $10,000 (100x100) or $20,000 (100x200). The leverage depends of the broker.
Lot
Forex is traded in lots, because a pip is a too small amount of money if you could only trade with $1. You can't trade forex with only $1. The standard lot size is $100,000, the mini lot size is $10,000. Brokers now also let you trade smaller lots. To understand pips and lots see our article : Forex profits - pips and lots.
Quote currency
This is the second currency in a currency pair. In the EUR/USD pair, the US Dollar is the quote currency. Quote currency is also called counter currency.
Pip
Pip stands for percentage in points. This is the last decimal point and minimum increment you can see on a quote. Example : 1.1230. Here 0 is the last decimal point, if the price increases to 1.1235, this is 5 pips more. You will look at the pips to know if you are earning or losing money. To understand pips and lots see our article : Forex profits - pips and lots.
Position
A position can be "long" or "short". Long specifies a trade where you buy and hope the price goes up. Short specifies a trade where you sell and expect the price go down.
Signal
Signals are alerts that help traders. Signals are sent by signals providers or your broker. Signals are sent by email, sms or directly to your trading platform (software). Signals generally include the entry and exit points for a pair at a specific time of the day.
Spread
The Ask/Bid spread is the different between the ask (buy) and bid (sell) price. The spread is given in pips.
Easy-Forex? You're invited to trade with professionals.