Trading techniques in the Forex market
To fully understand the following examples of trading procedures, you need to familiarize yourself with specific jargon, acronyms, and terminology, accepted in the Forex market.
First and foremost, the following acronyms are used to signify the most heavily traded currencies:
The currency pair ‘US dollar versus Japanese yen’ is expressed as USDJPY, or USD/JPY. The first currency of a currency pair is called the “base currency”. There exist other currency pairs, such as EURUSD, GBPUSD, USDCHF, etc.
Trades are executed in standard volumes called lots, with one lot usually equalling 100,000 units of the base currency. In other words, you will be able to buy and sell 100,000 units, 200,000 units, 300,000 units, etc.
Trading financial instruments involves substantial risk of loss to your capital. The high degree of leverage available in the Forex market can work against you as well as for you. Before starting Forex trading, it is critical that you carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you can sustain a substantial loss of some or all of your investments due to unfavourable fluctuations in currency exchange rates. You should abstain from Forex trading unless you are an experienced market participant or you fully understand the basics of currency markets, inherent risks, mechanisms of transaction execution and order placement. You are strongly recommended not to invest money that you cannot afford to lose. Before signing up for a Forex account, you must read and accept the terms and conditions of Forex trading, agreements, and tariffs. In order to reduce the risk of potential losses, you can (but are not obliged to) use pending stop-loss orders and, at each transaction invest not more than 5% of your Forex account. BCS-Cyprus shall not be held liable for incorrect interpretation of information posted on this website, as well as for possible mistakes, typos, and incorrect information.