Etoro foreign exchange brokerage overview – terms and glossary
If you’re going to create an account with forex entering the market as a newbie, you’re probably stuck and don’t know who to choose as your broker as there are loads of broker houses available.
Somebody who’s new to this world requires a good broker house, which will make everything a lot easier and simple. Regarding this, Etoro is the best one to choose. Apart from providing charts and graphs, they have all kinds of tools and systems which can take the pressure off new dealers by making the whole process easier. This has changed enormously the entire brokerage system. A beginner has free access to all the tools with which they can get experience in both the foreign exchange and commodities market.
A few reasons as to why Etoro is one of the best foreign exchange brokers:
• A free account to practice with actual time rates.
• You get up to a thousand dollars as a welcome.
• The best foreign exchange brokerage.
• Also you get a personal dealing tutor and one on one dealing sessions.
• A VIP account with includes extra benefits.
• Tools for advanced foreign exchange and commodities dealing.
• Twenty four hours a day, 7 days a week telephone and live chat support.
• Cero commissions and tight spreads.
• Online dealing brokerage.
• There’s no trading desk.
• And the best foreign exchange dealing system.
A few foreign exchange terms:
1 – Asking price/Bidding price: the price of purchasing currencies. This means that you as a customer can purchase the currencies at the asking price. It’s usually found on the right area of the screen. For example, if you see that the value of the Euro can rise you can ask to display the asking quote.
2 – Aussie: a slang term frequently used by traders for the AUD/USD foreign exchange currency set.
3 – The base forex currency, counter forex currency, forex currency set and rate: when any given currency appears in the currency set its called base price.
4 – The bidding price: this is actually the price it sells for, found on the left hand side of the screen. When there’s a risk of the value falling, you are able to sell your goods for the USD. This in the opposite to the asking price.
5 – Cable: this is a slang term used by forex traders for the GBP/USD currency set, also referred to as Sterling.
6 – Counter currency: in any currency set this is the second currency. The counter currency’s value is calculated against the value of the other one (base currency). For example, if somebody picks the AUD/USD then the USD would be the counter currency.
7 – Cross rate: the cost quote, a currency quoted against another currency instead of the USD. This is called the cross rate. The certain exchange rate of two currencies that go against the US dollar creates the quote.
8 – Currency forex set: these are currencies that have rates which are comprised, creating the currency set. With these two, one of them is purchased and meanwhile the other is sold.
9 – Day dealing: it’s just the function of opening and closing spots in a dealing day, providing no open spot for any dealer at the end of a day.
10 – Fed: this term is used as an abbreviation for the American Federal Reserve, the main bank of the United States of America. Any kind of declaration regarding the United States financial policy on the Federal Reserve issues could seriously affect the foreign exchange market.
11 – Forex: forex or frequently mentioned as fx is a reference made to the foreign exchange, the procedure of purchasing and selling currencies
at once. As it’s the purchase and sale of money, two transactions occur at the same time.
12 – The fundamental analysis: the analysis that informs you about the impacts of macroeconomics on the currencies of a country. The spots of foreign exchange dealers are done according to their perception of changes, which are bound to have an effect on different economies.
13 – Hedging: a place where one spot decreases the risk of the other positions, this is known as hedging.
14 – Kiwi: a slang term used by forex traders in reference to the NZD/USD forex currency set.
15 – Leverage: a kind of loan which is offered by your brokerages in order to help you continue dealing with a small quantity of capital. This can definitely increase your chances of making profit and losses at the same time.
16 – Long position: long going means opening such a spot, this gives dealers hope to sell high when purchasing at a low cost.
17 – Loonie: a slang term used by foreign exchange dealers regarding the USD/CAD currency set.
18 – Lot: this refers to the standard unit for dealing, usually a lot is made from 100,000 units of a base currency. A lot is additionally divided into what’s called mini lots (which are 10,000 units) and micro lots (1000 units)
19 – Margin/leverage: the minimum amount required to deposit. This means that you need a minimum amount of money in your account for transactions. At the same time increasing the ability to purchase and lose.
20 – Pip/point: PIP means the rate’s smallest cost increase in the last digit. The fourth digit after the decimal point is known as a PIP (apart from USD/JPY pair)
21 – Cost trend: also known as price trend, is a regular movement in cost of currencies in a particular direction. Dealers like this because it gives them a better chance of capitalizing on their potential.
22 – Rate/quote: in reference to the cost of a currency for another currency.
23 – Risk capital: it’s the amount of risk of loss you can afford to take, which doesn’t affect the entire life of the dealer.
24 – Spread: the difference between the asking price and the bidding price.
25 – Stop loss: of the foreign exchange market goes against your spot, the market can automatically close any open spot at a certain cost (in order to avoid losses)
26 – Swissy: a slang term used by forex experts in reference to the USD/CHF currency set.
27 – Take profit: an order of a deal which increases an open spot, at a certain quantity of profit. You can make use of this to understand your profits.
28 – Technical analysis: the observation of how the market behaves which can be predicted by analyzing past information. Which consists of chart patterns of currencies movements.
29 – The virtual balance: this is the potential current balance, understood by closing all the dealer’s open deals.