Every trade has its own terms and word list that are generally used by the traders and the customers. Similarly Forex trade also has its own dictionary that expresses its deals, deviations and other aspects. If you are about to plunge into the trading business of forex then you should get a brief idea about the common terms used here. Here are some of the important ones from the forex dictionary.

The first one has to be the ask price which is also known as the offer price. This refers to the market value of the currencies that the traders will have to pay in order to purchase some foreign exchange. They are often mentioned on the right hand side of the quotes.

Second one is the “base currency”. When a pair of currencies is mentioned in a particular quote, it shows the first one of the two is called the base currency. Suppose the quote shows as EUR/USD 1.1986 “C. Here the base currency is Euro and the price of I Euro is equivalent to 1.1986 US dollars.
The third one is a “Bar chart”. This is kind of a chart, which is related to the technical analysis of the forex trading.

This chart clearly shows the intricate details of the rise and fall of the market. The vertical bar that you get to see on the chart displays the price range of the currencies. The top and bottom of the bar denotes the highest and the lowest price respectively. There are two horizontal lines on the either sides of the perpendicular. The left one stands for the opening price and the right one is the closing price.

Next is the turn of “Bid Price”. This denotes the selling price of the currencies for the traders of forex market. This is always mentioned on the left hand side of the quote. The “Bid Spread” which is also known as the “Ask Spread” refers to the difference between the ask and the bid price which is actually the broker’s commission. Hence you will see this varying from one broker to other.

The other two most important but widely used words of forex market are the Pips and Spot. Even if you are not a regular trader of this market, you might have some idea about this. The term “Spot” denotes the smallest amount of modification that takes place between the selling and the buying price of different foreign currencies. The other term “Pips” is the least change that occurs in the cross currency quotes. Now you need to know what the meaning of “Cross Currency” is. When more than two currencies are traded at the same time, they are known to be cross currencies. Now talking about this market we know it is often called the spot market. The reason is that because of the absence of the geographical boundaries all the deals are fixed using the electronic communication. So these are the general glossary of forex, which you might find useful.

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