Long

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Taking a long position means BUY. In forex, going long means that a trader is buying the base currency and selling the quote currency. For example, if we go long or buy EUR/USD, we buy euros (EUR) and sell U.S. dollars (USD).

Lot

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A standard lot is the equivalent of 100,000 units of the base currency in a forex trade. A mini lot refers to 10,000 units, a micro lot to 1,000 units and a nano lot to 100 units.

MPC

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The Monetary Policy Committee (MPC) is the monetary policymaking body of the Bank of England (BoE). The MPC sets and announces policy eight times a year.

OTC

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Over-the-counter (OTC) refers to the process of how securities are traded for companies not listed on a standard exchange. For instance, the forex market is made up of two levels; the interbank market and the OTC market where individuals trade through online platforms and brokers.

Overbought

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Since traders use different tolls to analyze a currency, overbought is a subjective term. One of the technical indicators that determines if a currency is overbought, is the relative strength index (RSI).

Oversold

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As well as ‘overbought’, oversold is a subjective term since traders use different tolls to analyze a currency. One of the technical indicators that determines if a currency is oversold, is the relative strength index (RSI).

Pending Order

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A pending order is a request from a trader to a broker to state at which price level a position should be opened or closed. Professional traders use pending orders on a daily basis.

Pip

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A pip expresses the change in value between two currencies. If EUR/USD moves from 1.1270 to 1.1271, that 0.0001 USD rise in value is called one pip.

Pipette

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A pipette refers to the 5th decimal place when quoting a currency. For instance, if EUR/USD moves from 1.12751 to 1.12752, that 0,00001 move is one pipette.

Professional Forex

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A professional forex trader trades fulltime in the foreign exchange market and has a strategy that shows consistent profitability. Here are some important points why professional forex traders, in our view, succeed far more in the market: 1. They have a large trading account (>10.000 $), 2. They know the right money management, 3. They have a daily trading plan (and do not trade every day), 4. They have a daily trading strategy, which has proved profitable, 5. They are able to adapt to market changes, 6. They analyze the market technically and fundamentally every day, 7. They maintain a trading journal and 8. They have the mental strength and discipline to follow the same approach every day.