Forex trading is performed on a platform software, and one of the most well-known software for forex is MetaTrader. It is provided by almost all brokers as a reliable trading platform because it offers fast execution as well as easy download and installation. The trading tools available on the MetaTrader platform are nearly unlimited, helping traders carry out more accurate analysis and execution.
Within MetaTrader, you will find many trading terms that frequently appear in the glossary. Here are some examples:
Based on the picture above, here is the meaning of trading terms as shown by the numbers:
- Bid-Ask: The Bid price is the amount the broker is willing to pay to buy the forex pair, while Ask price represents the price at which you can buy the forex pair. The difference between Bid and Ask price is called the spread.
- Stop Loss: An order to automatically close position to stop the loss from going further. Traders usually set the Stop Loss at a maximum loss that they can tolerate for each trade.
- Balance: The amount of money that is available in the trading account, accumulated only after closed positions.
- Equity: The amount of money in the trading account that is counted from all kinds of positions, both closed and floating ones.
- Free Margin: The amount of money in your trading account you can use to open new trading positions.