Before you invest a single cent, get familiar with the lingo. Check out our list of terms every Forex trader should know.

Base currency: The currency where investors keeps their accounts, and the currency against other currencies are quoted. In the Forex market, the U.S. dollar is normally considered the “base” currency for quotes, meaning that quotes are expressed as a unit of one USD per the other currency quoted in the pair. Base currency can also refer to the first currency quoted in a pair.

Position: A trading viewpoint expressed by buying or selling. Position also refers to the amount of a currency owed (or owned) by an investor.

Broker: A broker is an individual, or a brokerage firm, that acts as an intermediary between buyers and sellers —  for a fee or commission. A dealer, by contrast, performs the same service but directly commits capital. They take one side of a trading position in hopes of earning a “spread” (profit) by closing out the position in a subsequent trade with another party.

Bear/Bearish/Bear Market: Trends favoring a declining market, or bearish traders who take positions expecting prices to decline. For example, “A bearish USD/GBP” estimates that the USD will weaken against the Great British Pound. The Japanese yen (JPY) and U.S. dollar (USD) are known as “safe haven” currencies, and both of these currencies tend to strengthen in a bear market.

Bull/Bullish/Bull Market: Trends favoring a rising market, or bullish traders that take positions expecting prices to increase. For example, “A bullish USD/GBP” estimates that the U.S. dollar will strengthen against the Great British pound. The New Zealand dollar (NZD) and Canadian dollar (CAD) are two currencies that tend to strengthen in bull markets. Conversely, bull markets usually lead to a weakening of “safe haven” currencies such as the JPY, the Swiss franc (CHF) and the USD.

Economic Indicator: A statistic that measures economic growth and stability, such as the Gross Domestic Product (GDP), employment rates, trade deficits, industrial production, and business inventories. Fundamental announcements (such as the jobs report, which includes employment rates) are often used to release these important sets of data.