Forex for Beginner Chapter. 3 basic forex word

Hello everyone..!!! We continue so far to chapter 3, I hope everyone are good with your investment. This chapter will be about those words that we use on forex market knowing between investment people(especially forex trader, investment bank). I write about this because when I was new, I was very confuse about these word from news and every someone who teach me or in those article. I try to collect some knowledge and it waste of my time(back then internet sauce is not popular as today). I hope this will make newby to understand those news more. See you on next chapter.....  

A Summary of Essential Forex Terms

Before we move on, let's recap some of the key concepts covered so far with this list of key Forex terms:

• Pip: A pip is the base unit in the price of currency pairs, or 0.0001 of the quoted price. So when the bid price for the EUR/USD pair goes from 1.16667 to 1.16677, that represents a pip change of one.

• Spread: The spread is the difference between a currency pair's bid and ask price. For the most popular currency pairs, the spread is often low - sometimes even less than a pip! For pairs that aren't traded as frequently, the spread tends to be much higher. Before a Forex trade becomes profitable, the value of the currency pair must cross the spread.

• Margin: Margin is the money in a trader's account. However, because the average 'Retail Forex trader' lacks the margin required to trade a high enough volume to make a good profit, many Forex and CFD brokers offer their clients access to leverage.

• Leverage: Leverage is capital provided by a Forex broker to bolster their client's trading volume. For example, if you use a 1:10 rate of leverage and have $1,000 in your trading account, you can trade $10,000 worth of a currency pair. If the trade is successful, leverage will maximise your profits by a factor of 10. However, please note that leverage also multiplies your losses to the same degree, so it should be used with caution. If your account balance falls below $0, you may trigger a broker's negative balance protection settings (if trading with an ESMA regulated broker), which will result in the trade being closed. Fortunately, this means that your balance cannot move below $0, so you will not be in debt to the broker.

Bank Section

• BOC (Bank of Canada) - The central bank of Canada, established in 1935 and governed by Stephen Poloz. Its headquarter is in Ottawa, Ontario, Canada. Besides being a central bank, it's charged with the responsibility of price stability and economic growth.
• BOE (Bank of England) - The central bank of the United Kingdom, established on 27 July 1694 and governed by Mark Carney. BOE is the center of focus for forex traders and stock market investors as it's charged with the responsibility of controlling the money supply through monetary policy, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.
• BOJ (Bank of Japan) - The central bank of Japan, established on 27 June 1882 and governed by Haruhiko Kuroda. Besides this, a nickname of the BOJ is Nichigin. Like other central banks, the BOJ is also a center of focus for forex traders and stock market investors as it's charged with the responsibility of controlling the money supply through monetary policy, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.
• FED - The Federal Reserve, the central bank of USA
• FOMC (Federal Open Market Committee) - FOMC is an abbreviation of Federal Open Market Committee. It's a subsidiary of the central bank of the U.S. named FED (Federal Reserve) and charged with the responsibility of controlling the money supply through open market operations, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.
• ICBC - Chinese bank for loans. The largest commercial bank in the world (by market capitalization).
• G 8 - A group of the most industrialized countries in the world. The associates in the G8 are: USA, Japan, England, Germany, France, Italy, Russia and Canada.
• MPC (Monetary Policy Committee) - Is a branch of the Central Bank of the United Kingdom named BOE (Bank of England) and charged with the responsibility of controlling the money supply through interest rates and open market operations, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.
• RBA (Reserve Bank of Australia) - The Central Bank of Australia, established on 14 January 1960 and governed by Philip Lowe. Its headquarter is in Sydney, New South Wales, Australia. Besides being a Central Bank, it's charged with the responsibility of price stability and economic growth.
• Reserve Bank of New Zealand (RBNZ) - The Reserve Bank of New Zealand (RBNZ) is the central bank of New Zealand. It was established in 1934 and is governed by Graeme Wheeler. Like other central banks, the RBNZ receives a lot of attention from forex traders and stock market investors. This is because it's charged with the responsibility of controlling the money supply through monetary policy, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.
• SNB (Swiss National Bank) - Swiss National Bank is the central bank of Switzerland and began business activities on 20 June 1907. The current chairman is Thomas Jordan. Its headquarters are in Bern and Zurich. Besides being a central bank, it's charged with the responsibility of price stability and economic growth. Swiss National Bank is the central bank of Switzerland and began business activities on 20 June 1907. The current chairman is Thomas Jordan. Its headquarters are in Bern and Zurich. Besides being a central bank, it's charged with the responsibility of price stability and economic growth.

Other Forex Jargon

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