While the trading procedure may be simplicity at its best, newcomers in the Forex may still find themselves a bit lost and confused from time to time due to the terms and nick names thrown around by traders. After all, it’s hard to figure out what pips, spreads, and candlesticks are and what their connection to currency is when you hear them for the first time.
Thankfully, the wealth of resources available online have made learning these common terms require considerably less effort than having to find someone more experienced than you. In fact, you might even find yourself becoming your own walking dictionary within just a few weeks of trading since they pop up and get used so often.
For not so common words, however, it will take a little more research to understand what exactly they refer to, especially if they sound like someone just made them up for kicks.
Here are 5 slang words that will make you scratch your head the first time you encounter them in the Forex.
Ever been called a jobber? Don’t worry, it’s not an insult, but it’s also not really a compliment. Jobbers are traders who choose to profit by taking short lived trades. This means they rarely keep their positions open for more than a day opting to profit instead from small pip gains across numerous trades.
2. Buying the Yard
If you hear about a trader buying or selling a yard of a currency pair, get ready to be impressed. Originally coming from the word “milliard” it refers to 1 billion units and works similar to how a lot is equal to 100,000 units. Its use may have been started to help give traders an easier time differentiating amounts other than saying million, billion, and trillion all the time.
3. Pull the Horns
Before you go looking for something with horns to pull, you might want to pay attention first to a changing market trend. This term uses the imagery of a bullish trader to signify that it might be time to reign in long positions in favor of short ones. Simply put, pull the horns on the bull and make it stop charging.
4. Smart Money
Money in any form is hard to describe as having the quality of being smart, but it could be true for the ones holding it. In this case, smart money is the amount traded by advanced traders, central banks, and other large financial institutions around the world. Their money was called such since it was believed they knew things normal traders don’t and that they themselves could influence the market.
5. Goldilocks Economy
Almost everyone knows the story of Goldilocks, but not everyone is aware that it could describe a lot of unexpected things as well. The state of a country’s economy is of supreme importance for Forex traders since it has a major effect on their currency which is where the fairy tale comes in. Economies shouldn’t be too cold since they would stagnate, but being too hot could end up increasing inflation. Instead it should be a Goldilocks economy, balanced right with stability and growth.