20131003

Basic Grammar I

   Leverage:
Is a tool to trade large volumes with an amount of money available much lower. This allows shooting benefits just as you shoot the losses. The most common in forex leverage is 100:1, 200:1 and maybe 400:1  . In the U.S., maximum permitted leverage is limited to 50:1 

   Pips:
A pip is similar to a tick or point in stocks, futures or other markets . It is an acronym for interest point percentage and is the smallest individual unit to operate in forex . The pip is always the most right digit of any forex price quote.


   Batch:  

Banks and other forex liquidity providers operate in batches. A standard lot is 100k units of the currency of the operation, while a mini lot is 10k. How are you amounts that operations would be prohibitive for the average trader , brokers introduced a concept called leverage explained on top.

   Hedging Strategy:
A strategy designed to reduce investment risk used to require options, enter positions, short sales, or contracts. The coverage can help to lock in profits. The purpose is to reduce the volatility of a portfolio reducing the risk of loss.

   Devaluation: 
Decline in value of a country 's currency relative to the currencies of other countries. When a country devalues ​​its currency , imported goods become more expensive, while exports to become cheaper abroad and thus more competitive. 


   Bid / Ask Spread:
 The difference between the price offered and requested. It´s used to measure market liquidity . A reduced differential usually means high liquidity.
 

   G7:The seven most industrialized countries such as the United States, Canada, Germany , Japan, France , Italy and the United Kingdom

   G10: 

The members included in the G7 plus Belgium, Netherlands and Sweden. 

   G20:
The G20 was created to respond to the financial turmoil from 1997 to 1999 to promote international financial stability. Is integrated by Argentina, Australia, Brazil, Canada, China, European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom and United States of America.