Forex Flashcards
WHAT IS A PIP?
(67) This is the smallest division of price, the second to last decimal place of a quotation. 113.67’5
WHAT ARE LOT SIZES?
Your lot size is the amount of money you want to risk per PIP (10 ticks) on any particular trade.
1 PIP equals how many ticks?
1 PIP is 10 ticks
What is a standard lot?
If you want to risk a standard lot, every time the market goes up ten ticks or one full pip, you would make $10 bucks.
What is Leverage?
The amount of money you are allowed to borrow per trade from the broker.
What is Margin?
The amount of money you must have in in your trade account as collateral in order to place a trade.
If the leverage is 400:1 how much of a margin are you required to have?
100,000/400= 250.00
If the leverage is 50:1 how much of a margin are you required to have?
100,000/50= 2,000
What are major currencies
“Majors” have USD attached
What are minor currencies
“Minors” do not have USD attached
What is a Dealing Desk Broker?
They are known for placing trades against the traders using their platform in hopes that they’ll lose. Many of these brokers have been known for market manipulation
What is a Non Dealing Desk Broker?
They link two traders together and charge a commission and spread fee to do so. Always choose a ECN (Electronic Connection Network account) along with STP (Straight Through Processing)
What are the 4 main elements that drive economics?
DEMOCRACY- the peoples voice
CORPORATIONS- protects a business owner from being sued
PATENT RIGHTS- Protecting new ideas
EDUCATION AND LITERACY
3 factors that drive consumer activity?
Happiness, Possible Limitation, Rational Response, Marginal Utility
What day should you not trade?
1st Friday of every month due to non-farmer payroll
