Charts & Candlesticks
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Pip stands for “Point in Percentage”. It is a unit of measurement that defines the smallest change in value between two currencies. It is usually a single-digit move in the fourth decimal place of a buy/sell quote for a currency pair.
A Lot is simply the amount of the currency pair that one is buying or selling. In other words, it is the size of the
trade one is doing. There are different lot sizes:
A standard lot size (known as volume 1 in Mt4 Terminal) is 100,000 units of currency A Mini lot is 10,000 units of currency
A Micro lot is 1,000 units of currency. Check to know more about Pips & Lots
Leverage gives a trader the ability to control a large amount of money using little to a negligible amount of his/her own money and borrowing the rest. It is like a loan that the broker provides to the trader so that the trader has more capital to trade with than what he/ she initially deposited. For instance, if a trader has an investment capital of $1000 and a leverage of 1:10, then the trader has access to 10 times his invested capital i.e. $10,000 instead of his original $1000, to trade in the financial markets, thus enhancing his earning potential. Check to know more about Lot & Leverage.
Margin is that portion of a trader’s funds that the forex broker sets aside from the trader’s account to open and maintain a new position. In other words, the margin is like a security deposit that the broker holds while the trade is open. It helps to cover the cost of any losses that the trader might make on the open position. Check & to know more about Margin.
A price chart is a sequence of prices plotted over a specific timeframe.
Since the candle gives information about price movement in a certain period of time, it says during that time the currency was bought more or sold more against the pairing currency. Multiple candles showing bull closing can indicate a bull trend momentum.
Helps to know:
Selling or buying pressure
Which side is in control
Candle size – helps to know if the trend momentum is strong or weak
