FOREX TERMS

Some terms Forex important and absolutely must be understood.

The first is commonly called "PIP" Pip is a unit commonly used in naming the value of an exchange or so-called also "Points". Examples: USD / CHF 1.4235 last week and today's value rose to 1.4245 it means that this pair has increased by 10 pips Well, understand right?

Another thing we need to know is that his name "LEVERAGE". It's more or less synonymous with "Margin Deposits" in stock., It simply is that if we invest Rp 5 million and when this unit is charged at 1:100 leverage means that we are given rights by the broker to buy 100 x greater than the funds we have. Means with the money amounting to Rp 5 million, we provided funds to purchase foreign currencies amounting to Rp.500 million . Now this is called margin collateral or leverage. Each broker has its own leveragenya - own. In this case, big leverage means possible profit / loss becomes greater. Vice versa, then the leverage that a small amount of loss that may occur becomes smaller with the consequence also becomes smaller gains in value.

I myself prefer a little leverage, Because then the risk of loss is Smaller. If I believe a transaction will of profitable, then I can raise the amount that will be my Lot traded.

Then next is the "CONTRACT SIZE" This is a multiplier factor in calculating the amount of profit and loss. Its value is fixed and set by the government that is 10,000 (ten thousand).

The next thing is the "LOT" Lot is a unit of the contract on every transaction. So when I entered into the transaction, such as purchasing (buy) USD against the CHF, the value of the units in the lot. Again, each broker has their own rules in determining the lot, depending on the pip and levererage them. In AsiaFXOnline, one lot transaction value was Rp 1 million.