Australia is a popular platform for currency and foreign exchange traders due to the 3G’s it offers- geography, geology and government policy. The country leads a stable trade of numerous resources at high-interest rates, leading to a daily average trading volume of over 18 billion AUD. While forex trading in Australia carries its benefits, it can be tedious for newcomers who trade FX on online platforms like Metatrader for the first time. There are numerous terms that a foreign exchange trader or a professional must know to make profitable investments successfully and follow trends. Here are a few prominent ones.
It refers to the act of a trader taking advantage of countervailing prices in different markets by selling or purchasing currencies appropriately. It leads them to simultaneously take an equal and opposite position in the market, allowing them to profit from minimal price differences.
ASIC refers to the Australian Securities and Investment Commission that regulates the providers of financial and credit services and corporate markets.
The ‘ask price’ or ‘ask’ refers to the term forex traders use to refer to the price at which traders accept to buy currencies at a particular time.
An item, resource, currency or currency pair of value is an asset. In trade FX, assets refer to the forex currencies traders exchange in the market.
Foreign exchange currencies consist of pairs. Within them, the first listed currency is referred to as the base. For example, in the AUD/USD pairing, AUD is considered the base currency.
A bear market refers to the situation when the price of a currency pair, security or asset is on a downward spiral. Some traders use the shortened terms ‘bear’ or ‘bearish’ to denote the state of a forex market that is in decline.
Bid price refers to the amount at which forex traders are willing to sell their currency or assets.
It is also known as block trade which refers to an order that traders submit to purchase numerous securities.
Brokerage for Forex
Firms or companies like the Metatrader that provide traders with a platform to exchange foreign currencies are forex brokers.
This term refers to a situation opposite to the bear market as it describes when an asset, currency, price or security is on an upward trajectory. Like the bear market, traders shorten the term to call it a ‘bull’ or ‘bullish’ market when it is on the rise.
Buy Limit Order
The buying limit refers to the price threshold that traders establish to order and push the transaction at a price lower than or equal to the specified amount.
It refers to situations when a forex trader borrows at a lower interest rate to buy currencies or assets that can produce them with a higher interest rate.
Closing Market Price
It is often known as the closing rate. During a specific time frame or a day, the closing price denotes the final value of the currency at the end of the predetermined time.
Contract for Difference (CFD)
CFD is a contract between the buyer and the seller, stating that either of the parties would pay the other when there is a difference between the asset’s current value and the contract time. It allows traders to take advantage of the market prices going up or down.
It refers to the supervisory authority, i.e., the Cyprus Securities and Exchange Commission, that overlooks the transactions and investment services carried out by the Republic of Cyprus.