Forex Pro

People who go to live in a new country have to cope with a lot, new culture, new people and a new language. People who move into a new profession, such as foreign exchange Trading have to do the same. If you are about to take the plunge and move into this glittering new world, then here are some of the terminologies that you are likely to come across there. As if you didn’t know them already.

Highs and lows.

The terminology “highs and lows of currencies” in the professional internet banking market, are determined by the electronic broking system (EBS).

Owned by a consortium of 13 banks, the EBS connects all its

member banks to each other so they can buy or sell currency.

Hedging

Some12345 platforms companies have a tool that they also call “hedging.”

The definition of hedging in Forex terminology is that when a dealer simultaneously sells and buys a currency, paying the difference in the spread. The logic behind that is that by hedging the dealer is protecting their position as when one position is losing the other is gaining, minus the spread. Experts are still searching for the logic behind this strategy.

Slippage.

The difference between the rate at which an order was given and the rate at which the order is filled is defined as slippage in forexspeak. Understandably slippage can be a very thorny issue amongst Forex traders.

Whilst some platforms will pull out all the stops to fill their customer’s order at the exact rate quoted are precise time that the order was placed, there are many others who do not adhere to these standards. And it usually, by some strange coincidence, works against the dealer.

This is common occurrence and not widely accepted with understanding by the Forex community.

Requote

Certain Forex trading platforms run what is called a “re-quote” feature. This feature appears when a dealer is about to make a purchase. From time to time during the buying process a popup window will shoot up out of nowhere. This window will offer a different currency exchange rate. Again this practice does not curry favor with the average Forex dealer and will cause friction especially against the overseas platforms that are particularly inclined to use this practice.

These are just a few examples of terminologies and the practices behind them the Forex dealers have to contend with on a daily basis. They will soon be flowing of the edge of your tongue,

This entry was posted on Thursday, May 3rd, 2007 at 7:37 am and is filed under Forex Explained, Forex Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.