Explanation of Professional Forex Market Terms

The Forex market refers to foreign currencies or the trading market for buying and selling foreign currencies. So what are the professional terms in this market that investors need to understand? Let’s introduce them to you below.

Establishing a position: Building a position is also called opening a position, which means that a trader newly buys or sells a certain amount of gold, silver, or crude oil spot contracts.

Position: A contract that has not been closed after opening a position is called an open contract or an open position, also called a position.

Position volume: Position volume refers to the total value of the bought (or sold) positions before they are closed.

Closing a position: The act of buying back a sold contract or selling a bought contract is called closing a position.

Total Contract Value: The total value of the products purchased and sold. That is, the unit price of crude oil or silver * the number of lots (quantity).

Going long: Going long means going long. When bulls judge that the market is rising, they will immediately buy crude oil or silver, so going long means buying crude oil or silver.

Short selling: Short selling means taking a short position. Short selling means judging that the market trend is falling and immediately executing the selling behavior of crude oil or silver.

Market Maker: (Market Maker) is a financial service provider that creates a market for financial products by providing buying and selling quotations. The market maker system is a securities or futures trading method that uses market maker quotations to form transaction prices and drive transaction development.

Settlement: refers to selling the gold you bought or buying back the gold you sold.

Occupied margin (advance payment): The amount of gold sold or sold by the customer * the advance payment ratio.

Available advances: The total net deposited funds by the customer, deducting all handling fees, inventory fees, easy-to-use advances incurred in the customer's trading account, and the fund balance after adding floating profits and losses.

Buying price: The price at which customers buy crude oil from Shenzhen Petrochemical, which is the higher price displayed by the quotation system.

Selling price: The price at which the customer sells crude oil to Shenzhen Petrochemical, which is the lower price displayed by the quotation system.

Customer report: A list that records customer transaction-related information.

Handling fee: The service fee charged by the trading platform for providing trading services to customers.

Position risk rate: (customer account net value/position occupied trading margin)*100%

Customer account net value: account balance + floating profit and loss.

Full position: No funds are left. Buying or selling all contracts is called a full position. Leaving half of the contract is called a half position. Buying after a fall is called covering a position. Buying a new one from scratch is called opening a position.

What is risk margin: It refers to the funds pre-deposited by members in designated custody accounts for the purpose of transaction settlement and member risk control.

What is position closing profit and loss: profit and loss caused by the liquidation of intraday positions, actual profit or loss.

What is settlement profit and loss: Under the daily debt-free settlement method, it refers to the profit and loss caused by changes in the settlement price after the market closes, resulting in actual changes in funds, which are directly transferred to the capital account.

What is floating profit and loss: The profit and loss of a position caused by the latest price fluctuation during the day is not a realistic profit or loss.

What is profit and loss: Changes in funds due to price changes are divided into position profit and loss (also divided into floating profit and loss and settlement profit and loss) and position profit and loss.

What is the settlement price: The average price of the buying and selling prices 10 minutes before the closing of the trading day is the settlement price, and the settlement price is used as the basis for calculating the profit and loss of the day and the position price of the commodity on the next trading day.

What is settlement: Settlement refers to the transfer and comparison of margin, profit and loss, handling fees, extension fees and other funds in accordance with the relevant regulations of the exchange and the trading results of members and users. Daily debt-free settlement is implemented, and floating profits and losses are converted into settlement profits and losses, resulting in actual transfer of funds.

What is a take-profit order: Profit-taking is executed after the commodity price reaches the expected level. If the price reaches the set price, the stop-profit order will be executed to automatically close the original position.

What is a stop loss order: It is used to keep the loss within a certain range when the commodity price moves in the direction of no profit. If the price reaches the set price, the stop loss order will be executed to automatically close the original position.

What is a limit order: An order to buy or sell a commodity at a fixed price. When the future price is equal to the set price, this order can be executed to establish a trading position.

What is a market order: It refers to an order to buy or sell a commodity at the current price. Executing this order establishes a trading position. Buying is done at the offer price, and selling is done at the buying price.

What is margin trading: The so-called margin trading (commonly known as virtual trading in China means that every time a trader trades, the broker is allowed to trade with him). At that time, a sum of funds in the broker's account is deposited as collateral for the loss of the transaction, and a trading contract is signed to execute the transaction. This guaranteed fund is called a deposit

What is two-way transaction business

Two-way trading means that you can buy when the price goes down or when the price goes down. There are profit opportunities whether prices are falling or falling.

What is T+0 trading business: The so-called T+0T refers to the date of the transaction. Any trading system that implements clearing and delivery on the day of transaction is called a T+0 transaction.

What is forced liquidation? It means that the loss is greater than the funds available in your account after removing the margin. Because the remaining funds after the platform forcibly closes the position are the total funds minus your losses, and generally there is only a part left. Standard formula: User account net value ÷ trading margin occupied by positions = risk rate.

What is a trading position and position? A market agreement that promises the initial position of a trading contract. Those who buy the contract are long; those who sell the contract are short.

What are short positions, short selling, and short-selling transactions? It is expected that the market price will fall in the future, that is, selling a certain amount of currency or option contracts at the current market price, and then filling in after the price falls to close the deal.

What is long, buy, long

Traders expect that the market price will rise in the future, buy a certain number of coins at the current price, and after the exchange rate drops for a period of time, they can hedge their contract positions at a lower price to earn costs. This method belongs to the trading method of buying first and selling later; short selling is just the opposite.

What is position closing and hedging?

To close a previously purchased (sold) currency position by selling (buying) the same currency.

What is opening/building a position?

When the market movement is consistent with their own analysis or investors feel that it is an opportunity to enter the market, they can consider entering the market. Bullish: Down: Sell

What is closing a position?

To close a position, you must place a reverse order. If the previously opened position was a bullish order, it should be a sell order to close the position after reaching the target price, and vice versa. For example, if an investor buys one lot at a price of $660/ounce, and the target price is $665/ounce; then when the price drops to $665/ounce, and the investor feels the target price, he can close the position by selling one lot at a price of $665/ounce. At this point, the account is in a short position.

What is adding a position?

When the market direction is approved, if you originally look at the opposite direction, and investors are relatively certain that the trend can be accepted, they can consider adding positions. However, they must ensure that their own position bottom is guaranteed. If the position bottom is too shallow, do not consider it.

Consolidation: Consolidation means that the stock price fluctuates in a small range within a period of time, with no obvious upward or downward trend. The stock price is in bullish consolidation. The amplitude of the market in this stage is small and the direction is difficult to grasp. This is the time when investors are most confused.

What is placing an order and canceling an order?

If you often encounter situations where you have to rest after 1: 30 in the morning or have to go out temporarily for work, you can decide to place an order. A pending order is also called a placing order, which means you wish to buy or sell at a price, and then report this price to the system to wait for the transaction. At the same time, you must also report a pending order deadline; canceling the order is to cancel the order that has been placed.

What is the elimination of pending orders?

When investors close their positions in advance or predict that the market will significantly exceed the target price, they may consider canceling the previously set pending orders and wait for the market to break out. If the investor fails to cancel the pending order in time and closes the position in advance, the pending order will still be valid. Once the target price is reached, the pending order will take effect immediately and a new position will be opened for you. Therefore, investors must pay attention: they must keep a clear mind when operating!

What is setting take profit and stop loss

Investors need to implement a concept: when you enter the market, you already know when to come out. Therefore, when investors enter the market at a certain price (whether buying or selling), they must have a target price and a stop loss price in mind. As the saying goes: Don't worry about running out of firewood to keep the green hills, don't spend all your wealth on one gamble. Take-profit and stop-loss can be set mentally and executed as soon as the target price is reached; they can also be set as pending orders, depending on the specific situation.

[Highest price] refers to the highest price among the prices traded on that day.

[Lowest price] refers to the lowest price among the prices traded on that day.

[Contract unit] is an internationally accepted unit for calculating trading volume. It must be an integral multiple of the minimum contract to process the transaction. The current unit of calculation for gold trading on the Shanghai Gold Exchange is "lot".

[Trading volume] reflects the number of transactions. The unit is lot and the sum is calculated bilaterally for both buying and selling.

【Price】The unit of price increase and decrease. The price level varies with the contract.

[Rise and Fall] Compare the daily closing price with the settlement price of the previous day to reflect whether the contract price rises or falls.

[Short gap] The market is stimulated by strong "good" or "bad" news, and the price begins to jump sharply. When it rises, the opening or the lowest price of the day is higher than the closing price of the previous day, which is called an "upward gap"; when it falls, the day's opening or the highest price is lower than the previous day's closing price, it is called a "downward gap."

【Bad】Factors and news that cause prices to fall are beneficial to short sellers.

[Positive] are factors and news that stimulate price increases and are beneficial to bulls.

[Support level]: The price shows a downward trend within a certain period of time. The price that falls to a certain price range and stops falling is called a support level.

[Resistance level]: The price shows an upward trend within a certain period of time. The price that rises to a certain price range and stops rising is called the resistance level.

What is lockup?

The so-called hedging refers to an operation strategy in which investors lock out the profits or losses of their positions when the market direction is unclear during the transaction. At this point, market price fluctuations have no relationship with their profits or losses. Its main operation method is to sell (short) the same number of orders as long orders (long orders held), or buy (long) the same number of orders as short orders (short orders held). Locking is divided into two situations: locking profits and locking losses;

Lock profit: Lock the existing profit of the position. For example: Qianhai Oil (10) 1 lot long position opening price is 2000, the current market price is 3000, if you place 1 short lot at the current price, the price is locked from 2000 to 30 00, when the market price reaches 4, 000 or even 5, 000, the profit difference of the position held is still 1, 000 points. Of course, even if the market price falls back to 300, the profit difference of the book receipt held is still 1, 000 points. Locking in losses is the same thing.

1. Opening a position at market price: a transaction order established based on the current market price

2. Market price liquidation: liquidate existing positions at the current market price.

3. Opening a position based on price: The customer sets the non-market price according to his or her own wishes, and when the market reaches this price or crosses this price, the transaction will be completed at the set price.

4. Take profit and close the position: close the position according to the take profit price set by the customer

5. Stop-loss closing: close the position according to the stop-loss price set by the customer

6. Backhand position opening: When closing a position at market price, customers can choose to open a position in the opposite direction based on market changes...

What is unlocking

The so-called unlocking refers to lock-up. In the lock-up state, if investors close long or short orders in one direction, it is called unwinding. Of course, if the same number of long orders and short orders are closed, it is also called unwinding.