Key Terms in FOREX Trading

For new FOREX Traders, it is imperative to understand the terminology associated with trading FOREX. The following are some of the important FOREX terms:

Currency Pairs: FOREX trading involves the simultaneous buying and selling of two currencies, for example, CAD/USD: The Base currency is the first currency in the currency pair. The quote currency is the second currency in the currency pair A FOREX trader will buy 1 currency and at the same time sell another currency. These two currencies are called currency pairs.

Major Currencies: The major, and most frequently traded currencies are: USD, EUR, JPY, GBP, CHF, CAD, and AUD.

Minor Currencies: All other currencies not referred to as the major currencies are called minor currencies. The most traded minor currencies are: NZD, ZAR, and SGD.

Cross Currency: A cross currency is a currency pair in which neither the currency is the USD.

PIPs: A pip, also called a point, is the smallest unit of price in FOREX. For example, CAD/USD equals 0.7973, the pip is 0.0001.


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Please Read This Important Risk Disclosure

Trading in stock, options, Futures, and FOREX markets carries a high level of risk, and may not be suitable for all investors. Before deciding to trade these markets, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading, and seek advice from your own independent financial advisor. The member acknowledges that unique experiences and past performances of the Stock Advisor Group do not guarantee future results. The member understands and acknowledges that trading Stocks, Options, ETFs, Futures contracts and Stock Options are suitable only for knowledgeable investors who understand the risks inherent in trading currencies, have the financial capacity and willingness to incur losses. The member is fully aware that StockAdvisorGroup.com may use an electronic trading system to generate trades, which exposes the member to risks associated with the use of computers, and data feed systems relied on by Stock Advisor Group. The member agrees to accept such risks, which may include, but not limited to, failure of hardware, software or communication lines or systems and/or inaccurate external data feeds provided by third-party vendors. The member understands that no "safe" trading system has ever been devised, and no one can guarantee profits or freedom from loss.

Hypothetical Results Disclosure
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.