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Developing your Basic Skills as a Novice Trader

  • August 5, 2021
  • Darren
Forex Trading
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When you learn any new skill you need to learn many new things related to that skill. Many new terms are added to your dictionary on a regular basis. If you are a part of the trading platform, you need to know certain terms before starting your first trade. You may know some of the terms already, yet you need a revision on it.

Major and Minor Currencies

As you have decided to be a Forex trader, you already know what are you treading. This is a platform for trading currencies. The idea about the most traded currency is a must for you. The eight currencies that are heavily traded currencies are called the major currencies and they are USD, JPY, EUR, GBP, CHF, NZD, and CAD.

All the other currencies are known as minor currencies.

Base Currency 

Base currency refers to the first currency so in any currency pair. The quote in a currency pair represents the difference in price value between the base and the second currency. In the currency market, the U.S dollar is considered as the base currency.

Quote Currency

In any currency pair, the second currency is considered as the quote currency. But if you find it hard to monitor two specific price levels in the market watch, you might focus on the base or quote currency only.

Pip and Pipettes 

By ‘pip’ we understand the smallest unit of price for any currency. Normally, currency pairs consist of five digits and pip is the point in the fourth place of the currency pair. For example, EUR/USD trading at 1.11220. Here, 2 is the fourth point and we will consider it as pip. But if you trade the stocks market, you might experience difficulties at the initial stage since some of the advanced brokers might use 5 digit pricing in their trading platforms.

Bid Price

In the Forex market, the bid price means the price at which the market is ready to buy a specific currency pair. The traders can sell the base currency at this price. The bid price can be found on the left side of the quotation.

Ask Price

Ask price is also known as the offered price. Ask price means the price at which the market is ready to sell a specific currency pair. The traders can buy their base currency at this price. The asking price can be found on the right side of the quotation.

Quote Convention

In the trading platform, usually, you should see the exchange rate in the following format.

Base currency/ Quote currency = Bid / Ask

Transaction Cost

The certain amount of costs or commission that a trader has to pay for every trade is known as transaction cost and it varies from broker to broker.

There is a formula to calculate transaction cost:

Transaction cost = Ask price – Bid price

Cross Currency

By cross-currency, we understand the currency where there is no U.S. dollar in the currency pair. This pair displays variable price behavior. Cross-currency pairs bear a higher transaction cost.

Margin

If you want to get trade the market with a leverage trading account, you need to deposit a minimum amount with that broker. The size of the minimum is not the same, rather it varies from broker to broker. 

Leverage

In the Forex market, the term leverage is used to indicate the loan that is offered Forex broker to a trader who has less balance in his account to invest for trading. By taking leverage he can make a huge profit without having less capital. Leverage creates the opportunity for new traders to take a position in the Forex market. But sometimes it also causes loss even becomes the reason for losing position. Before taking leverage, you have to be cautious and know the trading platform very well. 

So, these are some terms which you will get frequently in the Forex market platform.

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San Francisco has long been thought of as a town a bit too far left of left. As James Hurysz and others remember, it’s had a long history of being liberal, free-flowing, and far less conservative than other locales. However, it’s also been a city of change, being the birthplace of the tech boom as well as the ancestral home of some of the most prolific and influential writers and artists in the 1960s and 1970s. Unfortunately, today, San Francisco is leaning so far off track, it has now triggered just as much of a hard reaction by pushing back. James Hurysz reflects on the same view as others on the outside; the city’s government has embraced the idea of non-enforcement to the point that homelessness, drugs, and crime have made the city unlivable for regular people and businesses. And that has pushed businesses to the point of something that is fundamental to American independence: a tax revolt. The frustration and anger of businesses in San Francisco aren’t restricted just to the City by the Bay, from what James Hurysz sees online. It’s been happening across the country in other locations with a similar attitude towards social leniency. Unfortunately, too much leniency has come with too much of a cost. Businesses are constantly being robbed or vandalized, customers threatened, and sidewalks soiled badly on a daily basis. Yet, when business owners beg the municipality for help and law enforcement, the most liberal cities have taken a “hands-off” approach. As a result, many businesses have gotten to the point where they are closing, leaving, and failing. Those ventures that have survived to date are drawing a line in the sand, refusing to pay any more in business taxes to get their cities’ attention. James Hurysz is not surprised or shocked. Cities are no different than any other organic development, argues James Hurysz. They thrive best with a balance. Clearly, the zenith of conservatism is a police state run by corporations, and the extreme opposite is what is happening in San Francisco. Neither are healthy or long-lasting. Ideally, a healthy city is one that finds a balance between social liberalism and protecting its business community so that income generation can help long-term growth and support the city’s programs. When, however, municipalities treat their businesses like cash cows, only good for income and no protection at all. Then, at some point, James Hurysz notes even the most giving of companies have a breaking point. That is what is happening in San Francisco with its small business tax revolt. The sentiments today are no different from those of the colonists during the Boston Tea Party. At a certain point, the colonists under the abuse of England using them as a tax coffer got sick of their treatment. And they pushed back. While no one expects San Francisco to be the start of the next American Revolution, the aspect of government delegitimizing itself still exists. And if those in local government don’t pay attention, they will find their entire system being fundamentally changed again from the ground up. Balance protects all elements, social and business. Protect the balance and everyone grows within limits. Ignore it, and change comes quickly and chaotically
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