Forex trading glossary

Arbitrage

Taking advantage of different prices of an asset in two markets is called arbitrage. For example, buying an asset for 100 dollars in market A and selling it for 105 dollars in market B.

Ask

it is the highest price at which a trader is willing to pay to buy a particular asset or currency.

Asset

it refers to something valuable, such as a currency.

Base currency

The first currency of any currency pair is called the base currency. for example, the USD is the base currency in this currency pair: USD/EUR

Bear market

It describes a situation in which a market is experiencing price declines.

Bull market

It describes a situation in which a market is experiencing increasing prices.

Bid

It is the lowest price at which a trader is willing to sell a particular asset or currency.

Buy limit order

it is an order to buy an asset or currency at or lower than a specific price level and it helps traders to control the amount of money they pay to buy something.

Carry trade

it is a trading strategy in which a trader borrows an amount of money with a low-interest rate and invests that money in an asset that provides a high rate of return.

Closed position

A trade that is no longer active and its profits or losses are realized.

Closing market rate

the final value of a currency or an asset at the end of a specific time frame (usually regular market hours)