Here are a few essential terms in the world of Forex trading.
 

Going Long/Short

When you are going long on a currency pair the first part of the pair is bought while the second is sold. And if you sell the first pair and buy the second, it means you are going short. For example; going long in EURUSD means that you buy EUR and sell USD.
 

Leverage

One of the most important factors that distinguishes the Forex market from others and makes the forex market very attractive in itself is the leverage system. Traders with low investment also have the chance to earn a large amount of profit thanks to leverage and, of course, accurate analysis.

For example, let’s say that you open an account with an amount of $ 20,000 and your Forex broker offers you 1:10 leverage. This means that with a $ 20,000 deposit, you can trade 20,000 x 10 (leverage ratio) = $ 200,000. Your profit will be calculated in line with this amount.
 

Spread

The difference between the purchase and the selling price of a currencu pair is called the spread. The spread difference varies among pair. EURUSD is generally the first among the pairs with the least spread. The difference is deducted from your account as soon as your position is opened. For this reason, each position actually starts with a loss.
 

Pip

The pip is the smallest unit a pair can move. Each point increase in prices is called a pip. For example; when the EURUSD reaches 1.3664 from 1.3660, it increased 4 pips.
 

Margin

Margin is the minimum amount your broker asks you to deposit into your account to start trading in the markets. There are no restrictions on using margin. If you want, you can open a position by using all.
 

Lot

Lot is the trading unit in Forex markets. For currency pairs, 1 lot is usually defined as 100,000 units and 1 lot for gold is defined as 100 ounces.
 

Swap

It is a transaction in which the two parties exchange cash flows that depend on an asset or liability. For example, a firm with a ten-year fixed-rate debt and a firm with floating-rate debt can change each other's obligations. The aim of swap transactions is to minimize the risk arising from changes in interest rates and foreign exchange.
 

Quote

It is the price of one currency in terms of another currency. For example, one Euro may cost you $ 1.2016, if you buy EURUSD.