Commonly Used Term when using the Forex Megadroid

November 23, 2010

Forex Trading

Every trade has its own jargon. Talk to any professional and you are sure to chance upon a term that you won’t understand. Even traders have terms that are commonly known to them but not to members of other industries. More terms on Forex Megadroid review. Knowledge of these terms will be most beneficial when using analysis robots such as the Megadroid Forex Robot. Of course, tweaking the settings will make using the machine easier. However, altering the Forex Megadroid setting will be useless if you do not understand the terms of the trade.

Below are a few examples of these trading jargons. Learn them and use them well.

PIP stands for Percentage in Point. It is the most basic used for all currencies. It stands for the last digit after the decimal point when the exchange rate is written. It is important to know how to use PIP gains and lessen PIP losses in order to gain profits.

Spreads stands for the difference between buying and selling rates. It also stands for the quotations between a bid and ask. It highly determines the profits that a trader made in the past. It is a very effective tool in analyzing whether you will lose or win with a particular investment.

A lot refers to the size of the transaction. There are different types if lots. A standard lot is equivalent to 100,000 units of base currency. A mini lot has 10,000 units while a micro lot has only 1,000 units. The larger number of lots brings in more profit. The trader makes the final decision and he decides how many lots he wants to take up.

Leverage determines how much lots can be bought with an investor’s dollar. If a broker offers a 100:1 leverage, the trades can buy one hundred lots for one dollar. If you invest 100 dollars, you will get 100,000 lots.

These are only a few of the most commonly used words in Foreign exchange. In order to be a successful trader, you must familiarize yourself with other terms as well. Do your reading and research and you should be a well-versed broker in no time.

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One Response to “Commonly Used Term when using the Forex Megadroid”

  1. Anton Kamolov Says:

    Appreciate your help. Please also keep in mind – I am new at this area, so probably it will take time for me to catch all the important data mentioned – but I will keep tracking it..

    Reply

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