Spread is the difference between the buying price and selling price, the bid and offer (ask) prices. It is used to measure market liquidity. Every market has a spread, thus Forex does.
Category: Terms
When we talk about trading, we often use the expressions “long” and “short”. In all financial markets, including Forex, you “go short” by shorting an equity or currency when you believe it will fall in value.
When we talk about trading, we often use the expressions “long” and “short”. A long position is the buying of a commodity or currency with the expectation that the asset will rise in value.
Swap is the exchange “interest” or “premium” charged to a trader or earned on a daily basis for any trades carried (rollover) from day to day. It’s the fee for transferring an open position overnight. Swap may be both positive and negative.
Pip (singular)/ pips (plural) is a basic concept in Forex. It represents the smallest incremental move an exchange rate can make.