THE MOST COMMON 5 “WHAT IS?” IN FOREX

When you are a beginner you may find a few things and concepts that you won´t understand, then let us explain the top 5 “what?” that the beginners in forex ask themselves when they hear it.

  1. What is a pip?

This is the unit of measurement that is only used to express all the changes in value that occurs between one currency and other currency. The word “Pip” means “Price interest point”.

Pip is simply the smallest price move that can be given or that can occur in an exchange rate.

  1. What is a candlestick?

Now, let´s talk a little bit about the candlestick. This one is nothing more than a financial chart style that the traders use to be able to define the price movements of a determinate currency.

In the candlestick, you will be able to determinate different parts: black, white or green, red.

In that chart, there are three specific points that consist in the open, the close and in some special cases, the wicks. Then, all of it will be used in the creation of what is called a price candle.

  1. What is a bear market?

When someone talks about a bear market, they talk about the moment when a financial instrument is trading in a descendent manner, as people are selling it.

Therefore, this is the group of conditions in which securities prices will fall and widespread the pessimism that causes the stock market´s downward spiral.

The bear market is not a correction.

The corrections are the ones that offer a good time for the value investors to find an entry point into stock markets, on the other hand the bear market hardly provide suitable points of entry.

  1. What is a bullet market?

The simplest definition of this is that it´s a financial instrument in forex that it starts to trend in a rising way.

This is a financial market that fits with a group of securities in which the prices are just increasing or are expected to increase.

The term of bullet market or bull market is frequently used to refer to the stock market but to be fair and truth it can be applied to anything that is traded, for example, currencies, bonds and commodities.

You refer to it as a trading upward, because these are phrases that are often used by a majority of traders.

The hardest part of the bullet market is without a doubt the psychological effects, and the speculations may play a really large role in the trading markets.

It is called “bull” because it comes from the way that this animal attacks to their opponents. Pretty original, right?

  1. What is market volatility?

This can also be called variability, in case you heard that concept, well it is the same thing.

It is all about the basic quantity for risk related to a financial instrument of the market.

This fact represents an accidental essential of an assent´s price of the fluctuation. Frequently the higher volatility or higher variability means that there is a higher risk of the trading involved.

Now that you know all these definitions, working in forex as a beginner trader it will be easier.