(or any other currency pair the exchange rate tells you how much you need to pay in terms of the" currency to buy one unit of the base currency. For example, if EUR/USD.3200, 1 Euro is worth US1.3200. You do not own, or have any rights to, the underlying assets. The price at which the market is prepared to sell a product. If you open one standard lot of EUR/USD for 150,000 (100,000 x eurusd.5000) your leverage ratio is 15:1 (150,000 / 10,000). Prices are"d two-way as Bid/Ask. This allows why is bitcoin tanking right now a trader to leverage his account by up to 100 times or a leverage ratio of 100:1. The ask price is the price at which the market (or your broker) will sell a specific currency pair to you.
Forex Trading Terminology » Learn To Trade The Market
Pip, the smallest increment of price movement a currency can make. The reason for this is because in any foreign exchange transaction you are simultaneously buying one currency and selling another. Bid/Ask Spread, the spread of a currency pair varies between brokers and it is the difference between the bid and ask the price. Also called point or points. The major Forex pairs and their nicknames: Understanding kurs euro rupiah seputar forex Forex currency pair"s: You will need to understand how to properly read a currency pair" before you start trading them. Jump To Next Chapter, part 3: Long or Short? Used margin is that amount which is being used to maintain an open position, whereas free margin is the amount available to open new positions.
Most brokers will automatically close a trade when the margin balance falls below the amount required to keep it open. Thus, at the bid price, a trader can sell the base currency to their broker.