Whether you’ve been trading currencies in MetaTrader 5 for years or are just starting out, you’ll come across a lot of jargon. Learning how to trade on the financial markets is a must for anyone who wants to get into this lucrative but also very complicated business. By reading through this glossary, you can learn the language and get up to speed so you can focus on trading instead of reading. It should also help you avoid making rookie mistakes that could leave you without a way to make a living. If you don’t know what a word or term means, you might want to rethink your plan and ask yourself if you really know what you’re doing. This list of the most important forex trading terms will help you get back on good terms with your forex broker in France and, in the end, make trading more fun.
When trading on a live exchange, you need to use technical analysis tools to track how currency pairs move and figure out where they are going. Traders use moving averages, RSI, candlesticks, and other types of indicators to help them spot trends and signals. By using a live chart to look through financial data, you can see how the prices of assets have changed in the past, which can help you spot possible trades. This process is called “live charting.” You can use the live charting features on the website of a different trading platform if you want to use it.
Target Price and Stop Loss
When you trade currencies, you’ll often hear the term “stop loss.” Here’s what a professional forex broker in France had to say about it: Stop loss is a price or amount at which you want to sell your assets to protect yourself from a possible drop in their value. The other important term you’ll often hear when trading currencies is “target prices.” These are the prices you want to see when you buy and sell, or when you take the long or short position. You can protect yourself from a big market move with a stop loss and a target price. If the market falls below your stop loss, you can still sell at the magic number you set and make money from the drop. If the market goes back up more than your goal, you can just buy back in at the old price and make more money from the market’s movement.
Marge and Leverage
When you use leverage, you trade with more money than you have. When you put up money to buy an asset and then borrow money against it to make the trade more profitable, this is called “margin.” So, if you bought a $1,000 stock and gave yourself a $100 loan to pay for it, you would have $900 in your bank account and $100 in debt. When you trade with money you have borrowed, you are taking a risk. You could lose some or all of what you put up. On the other hand, if you used leverage to buy an asset worth $1,000, you would only have $100 in your hands, but you would have made $1,000 by taking a lot of risks and borrowing that money.
Time Frames for Trading Forex
Forex time frames in MetaTrader 5 are the periods of time during which prices can be traded. For example, if you have a forex trading platform that lets you trade 24 hours a day, 7 days a week, you might find that the markets are open for trading for much longer than that. These time frames also change based on the kind of trade you are doing. For example, if you are interested in short-term trading, you might only need access to the markets for a few hours. But if you want to stop a trend or use a trading strategy that may work for months, you will probably need to keep your positions open for much longer periods of time.