• The money you spend or sell is the base currency. The currency you are buying is called the currency of the valuation. Forex trading is a full form of foreign exchange trading where you sell one currency to buy another one.

• The exchange rate tells you that you want to burn the currency to buy the base currency. For example, if you want to buy some dollars in pounds, you might see an exchange rate like this: GBP/USD=1.589. This exchange rate indicates that you have to spend $1.589 to buy one pound.

• The bulls indicate that you want to buy the base currency and sell the denomination currency. In the above example, you want to sell dollars and buy pounds.

• The short position indicates that you want to buy the denomination currency and sell the base currency. In other words, you will exchange the pound in the place of the dollar.

• The purchase price is the price at which your broker is willing to use the denomination currency to buy the base currency. Are you willing to bid price in the market to sell the best price quote currency?

• The selling price, or asking price, is the price at which your broker is willing to sell the base currency to buy the denominated currency. The selling price is the best price you are willing to buy from the market.

• The Gap which shows the difference between the bid price and the asking price is called “spread”.

Analyze the market
You can try different methods:
• Technical Analysis: Technical analysis involves viewing charts or historical data to predict the direction of the currency based on past conditions. You can usually get a chart from your broker or use a common platform like Metatrader 4.

• Basic Analysis: This analysis involves looking at the economic base of a country and using this information to influence your trading decisions.

• Emotional analysis: This analysis is primarily subjective. Basically, you try to analyze market sentiment to judge whether it is "bearish" or "bullish."

Although you can't change market sentiment, you can often make more accurate estimates and influence your trading
Look at your profits and losses. The most important thing is not to use emotions. The foreign exchange market is fluctuating frequently and you will experience many ups and downs. It is important to continue your research and stick to your strategy. In the end, you will see a profit.

Author's Bio: 

I Manisha, Market researcher highlighting the topic of "Understand The Basic of Foreign Exchange Terms" Also, we provide Forex Tips and comex tips.