Understanding forex terminology is important before starting with the right approach in forex trading. Here is the part 2 list of the most basic Forex terms that every trader should know before starting to trade in Forex.

1. LEARN FOREX TRADING TERMS - PART 2
1) MARGIN CALL
2) POSITION
3) LONG POSITION (Going Long)
4) SHORT POSITION (Going Short)
5) LOT SIZE
When traders/investors’ account runs low or out of sufficient
funds to sustain their current open position then they are
warned. This warning is known as Margin Call.
The trader has to borrow fund from the broker to buy and sell
securities.
If the market goes against trader’s open positions, the find will
be requested by this margin call.
A margin call is basically a demand to maintain the margin
value in the trading account.
The amount of currency an investor/trader owned by him/her is
called position.
A position trader is a trader who hold the position (currency or
stock) for long-term like for weeks, month or year.
The position is of two type.
When a forex trader buys an assets(currency or security) and
owns it expecting that value of that asset will rise in future, this
is called Long Position.
When a forex investor or trader don’t own the asset and he/she
is expecting to sell it and repurchase it in the near future when
the price of the asset will go down.
The main difference in going long or short is the expectation of
trader.
The number of units of currency you are trading is Lot Size in
forex. You can also say this is the size of your trade.
Lot size comes in four types:
Standard Lot 100,000 units $10/ pip
Mini Lot 10,000 units $1.00/ pip
Micro Lot 1000 units $ 0.10/ pip
Nano Lot 100 units $ 0.01/pip
(Nano lot some broker measure it in 10 units and many brokers
do not offer nano lot size.)
For example, suppose you bought $ 100,000 against Euro at rate
100.00 and exchange rate moves up to 100.40 which 40 pip
movement. That means you have made $400 in this process. Or if
exchange rate changes to 99.60 then you have suffered from a
loss of $400.
+ 65-3158-2180
info@mmfsolutions.sg
www.mmfsolutions.sg