Non Technical Terms For Beginners In Crypto And Forex Trading Markets

Non technical termins for beginners in Crypto and Forex Trading

So I promised to explain in details what the Forex terminologies mean.

For this reason I will be grouping them into two categories, technical and non technical.

The technical terms such as
Spread
Break even
Partial profit
Pips

Will be discussed individually for better understanding.

But today I will be treating the non technical terms.

1. BUY: What do we mean when we say buy in Forex?

We are simply saying that the currency pair will go upwards.

Let’s assume you were given a signal to Buy XAU/USD now

What we are telling you to do is to go to your trading app, look for this currency pair and click on the buy button.

Which means at the time the signal was sent, if you entered the signal trade and the market moved according to the prediction, it means you will close in profit.

2. SELL: Sell is the opposite of buy.

When we say sell, we are simply saying that the currency pair we are looking to trade will go downwards.

3. EQUITY: This is simply the amount of money you deposited into your trading account.

Just like every business has a capital, in Forex our capital is known as equity.

4. LOT SIZE: Lot size is the percentage of your equity that you are willing to trade with.

We have different lot size, the lowest being 0.01

Your lot size determines how much money you are willing to risk.

If you decide to trade with lot size of 0.01 it simply means that when the trade is going against you, the amount of money you will be losing will be low and when your trade is going towards your prediction, your profit will equally be low.

As a trader, your equity will determine the lot size you should trade with.

Let’s assume you have $10 as your equity, it will be wise to trade with lot size of 0.01 because that way you avoid the risk of blowing up your equity should your trade go against you.

Someone with $1000 equity can decide to trade with lot size of 0.5 or even 1 because his equity can withstand loss should his trade go against him.

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That is why even when you have the best signal provider he will always advice you to apply proper risk management because even if his prediction is accurate, there is a high chance that before the trade will close in profit a little downside of that trade might occur.

And if you are using a lot size that is bigger than your equity, there is a high chance that you might have blown your account before the trade closes.

This is why a lot of traders don’t make money from Forex because of greed.

You set a big lot size and before you get to the end of the trade your equity is gone.

5. PROPER RISK MANAGEMENT: This simply means applying proper caution when trading.

No matter how an expert you are in the Forex market, there is always a need to apply caution because trade can go against anyone at some point.

Applying proper risk management will help you stay in trade without the risk of losing your equity.

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In all it all comes down to how you set your lot size when trading.

When you hear someone say he made $10k in a day using 4 signals.

It simply means that the person’s equity is large añd so using a bigger lot size will result in bigger profit.

For example, there are two traders, trader A has $10k equity and trader B has $100 equity.

A signal to sell GBP/USD was sent to both of them.

Because trader A has large equity he decides to use lot size 10 to trade while,
Trader B because of his equity decides to use lot size 0.05 to trade.

When the trade closes and the market went in favour of their prediction.

Trader A’s profit will be a lot bigger than that of trader B’s.

So the amount of money you make in Forex depends on your equity.

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6. SL(stop loss): What this means is simply, when stop loss is applied on a particular trade, you are simply saying, should your trade go against you, let your loss stop at that point where you have set it to be.

Let me explain further:

Let’s say you are using a signal like this

SELL GBPUSD NOW

APPLY PROPER RISK MANAGEMENT

SL: 1.22803

TP: 1.21631

What this means is that, should this particular trade go against your prediction when the trade keeps going against you let the trade close in loss when it gets to 1.22803

7. TP(take profit): this is exactly the opposite of stop loss.

It means that when you add take profit to your trade, you are simply saying that, should your trade go in line with your prediction let the trade close in profit when it gets to 1.21631 using the example above.

I want to believe that you have understood all this up to this point.

Stay Intentional.

Rug pull is a form of deception in the cryptocurrency market where the development team suddenly withdraws all the project’s investment funds, causing a significant drop in token price and leaving users empty-handed.

I was explaining to my student a term in forex trading called “pullback ” and how it is applicable to life.

Pullback, in a layman’s explanation, is a temporal pause in the market movement.

Sometimes when a trade has already moved in your favor and this happens, most traders do not like it because you begin to see your equity reducing while some traders will take advantage of it because with patience it could still move in your direction.

It requires extra energy and discipline to hold onto your trade when this happens.

Hey, crypto community! Want to be a crypto-savvy investor?

Then it’s time to brush up on some essential financial terms.

Understanding these five necessary terms can help you make better decisions when investing in cryptocurrencies. Let’s dive in!

5 Financial Terms Everyone Should Know

1. ROI: Return on Investment – measures the gain or loss generated on an investment relative to the amount of money invested.

2. Market Cap: The total value of all shares of a cryptocurrency in circulation; a useful metric for evaluating the worth of a company or currency.

3. Liquidity: Refers to how easy it is to buy or sell an asset – something to be aware of when looking to enter or exit a position.

4. Volatility: Refers to the price swings a particular cryptocurrency experiences on any given day over a specified time period; something to be aware of when assessing trading risks or long-term investment possibilities.

5. Price-to-Earnings Ratio: A valuation ratio that measures a company’s current share price relative to its earnings per share; often used by investors as an indication of the relative value of a company’s stock.

These are just five of the many financial terms that could empower you as you travel through the world of cryptocurrency.

Knowledge is power, no matter what industry you’re in.

So keep learning, adapting and growing – and never stop exploring the limitless possibilities of the crypto market!

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Some traders rush to close a trade prematurely and soon after, you see the market move in your favor again.

Very sad.

Inside life, “pullback” is seen as a setback.

A setback could happen due to hurdles in life.

Life does not go straight.

Sometimes things happen that go beyond your control and it makes you look like your journey in life is slow and meaningless.

Unfortunately, it only looks like it, but it is not exactly so.

When you encounter life in this manner, do not quit, first sit down and analyze your way forward.

Setbacks or reversals in life is a boon.

“Pullbacks” or setbacks in life always provide opportunities to put you upfront.

Embrace it!

Because people hate to see progress.

People would rather see you suffer than see you better yourself.

That is why most discouragements come from those who are not trading.

They have never sat a day in their life to backtest.

They have never felt the joy of winning trades and the pain of losing.

They have no lessons in their boring lives.

You on the other hand are learning everyday through the charts.

So move quietly. Plan quietly. Fail quietly.

Rise quietly.

Remember all it takes is one good trade, one good month and one good year after a long struggle.

Then your whole life takes a different trajectory.

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These are non technical terminologies you as a beginner in Crypto and Forex Trading Markets must get to learn and understand if you want to make it in this field.