Our A-Z glossary of trading terms will help you get a better understanding of the financial markets. Improve your knowledge with our trading glossary International. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. % of retail investor accounts lose money when trading CFDs 9/12/ · Forex Trading Glossary. Here are probably the most widely recognized terms utilized as a part of the FOREX trading glossary. Ask Price – Sometimes called the Offer Foreign exchange, or Forex for short, is the “place” where currencies are traded. In the forex market, currencies are traded in pairs. When a trader buys a currency, he or she is selling 22/6/ · Top Forex Definitions. Accumulative Swing Index (ASI) A variation of the Swing Index, developed by Welles Wilder, the Accumulative Swing Index is a tool used to gain a ... read more
This is called slippage. The largest factor that creates slippage in the markets is large volatility. This can often be caused by news announcements or unexpected market shocks.
If you read any trading blogs or trading forums you would have seen traders discussing going long or going short. Ever heard of a bullish market? Or an economist say we are now in a bear market? Being either bullish or bearish refers to what side of the market you are on. If you are bearish you think that the price is likely to fall. One of the most popular and widely used technical analysis techniques in the stock and Forex markets is support and resistance.
As price moves up and down price action traders are constantly analyzing the prices movements. Technical analysis and price action traders believe that the price moves inline with the fundamentals.
On the flip side, resistance levels are seen as levels of supply and areas where price has found resistance to the move higher. Currencies are not able to be purchased or exchanged individually. A currency pair is the two currencies that are being exchanged. The order is alive good until its execution or cancellation. Hedging Maintaining a market position which secures the existing open positions in the opposite direction.
Jobber A slang word for a trader who is aimed toward fast but small and short-term profit from intraday trading.
Jobber rarely leaves open positions overnight. Kiwi A Forex slang name for the New Zealand currency — the New Zealand dollar. Released monthly by the Conference Board.
Limit Order An order for a broker to buy a lot for fixed or lesser price or sell a lot for fixed or better price. Such price is called a limit price. Liquidity A measure of markets that describes relationship between the trading volume and the price change. Long A position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short. Loss A loss from closing a long position at a lower rate than opening or from closing a short position with a higher rate than opening.
Loss may also occur if the profit from a position's closing was lower than the broker's commission on it. Lot A definite amount of units or amount of money accepted for operations handling usually, it is a multiple of Margin Money that the investor needs to keep at a broker's account to execute trades. Margin supplies the possible losses that may occur in margin trading.
Margin Account An account that is used to hold investor's deposited money for trading. Margin Call A broker's demand to deposit more margin money to the margin account when its size falls below a certain minimum. Market Order An order to buy or sell a lot at a current market rate. Market Price A current rate, at which the currency is traded in the market. Martingale A position sizing strategy that involves doubling the bet after each loss.
See the Martingale trading system. Momentum A measure of the currency's ability to move in a given direction. Moving Average MA One of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential moving average EMA , weighted moving average WMA , adaptive moving average AMA , etc. differ by the way of weighing rates and periods in calculation.
Offer Ask A rate of the offer — the rate you buy for. Open Position Trade A position on buying long or selling short of a currency pair. Order An order for a broker to buy or sell a currency at a certain rate. Percentage Allocation Management Module PAMM A broker-side system that allows investors to invest with traders, and allows traders to manage investors' funds using the broker's platform. See the list of brokers with PAMM brokers.
See the pivot points calculator. Pip Point The last digit in a currency rate e. Profit Gain A positive amount of money gained for closing the position. Prop firm A proprietary trading firm or a scouting firm is a company that provides funds for financial traders to trade with.
In other words, a prop firm trades with its proprietary funds. In retail FX trading, prop firms allow profitable traders earn substantial gains without risking too much of traders' own money. See our section on prop firms. Principal Value The initially invested amount of money. QE Quantitative Easing A monetary policy employed by central banks. It goes from London, and New York are opened at the same time, which is from the American opening at GMT until the London close at GMT.
FED FED is the Federal Reserve Bank, which is the US central bank. The FED is a group of entities comprising 12 regional central banks in various cities in the US. It promotes moderate long-term rates, high rates of employment, sustainable economic growth and preserving the purchasing power of the US dollar.
Fisher Effect The Fisher Effect is a theory of economics that delineates the relationship between inflation and two different interest rate types, nominal and real. It is attributable to Irving Fisher and has been used by economists and traders for a better understanding of economic factors.
Fundamental Analysis Fundamental analysis is a form of analysis that looks at the market through the lens of socio-economic and political factors that affect the rates of currencies. The value of currencies, like any other instrument, is determined by simple demand and supply for it. Hammer Hammer is a price pattern belonging to candlestick charting occurring when an asset trades at a lower value compared to its opening worth but manages to regain its price within the span and closes nearer to the opening value.
Hawkish It is a nickname for somebody who is optimistic regarding an economic topic such as jobs report, the economy of a country, or a favorable resolution in a discussion. Also, Hawkish is a person who believes that higher interest rates are needed to control rapid inflation or unsustainable economic growth. It is a trading strategy that an investor employs to reduce risks associated with market volatility.
An investor will take two independent positions that counterbalance each other, thus reducing the chances of losses if there are price fluctuations. Heikin Ashi Heikin-Ashi method is an easy and seamless way to read candlestick patterns.
It removes all unwanted data hindrances and focuses on the reversals and core trends. High-Frequency Trading HFT HFT refers to the process of employing computer-based programs that run complex algorithms to enhance trade speed. Regularly high-frequency trading will use arbitrage, market making, and momentum trading strategies through prediction or detection of changes in direction and depth of order flow.
Indicative Quote Indicative quote is the price offered by dealers or brokers on a particular debt instrument, which is not backed by a guarantee that a trader is ready to accept the said rate for selling or buying.
Inflation Inflation refers to the increase in the general prices of goods and services in a given period in time, which reduces the buying power of money. As the prices of goods increase, the purchasing power of every unit of the currency tends to decline. For instance, if five US dollars could buy three bars of chocolate in and now can only buy one, then it means there has been inflation. Usually, inflation results from the imbalance between the growth of the cash supply and the economic expansion rate.
Initial Margin IM The purchase price percentage in the derivatives market that a trader should cover using collateral or cash for a margin account is termed as an initial margin.
Intervention In the Forex market, an intervention is an action taken by central banks to affect the value of currencies directly.
It happens when the bank enters the market and sell or buy vast amounts of the given money. It can also happen as a coordinated central bank action, and it is when several banks act at the same time.
Like the move that six banks did in Leading Indicator It is a set of statistics that together are considered to anticipate future economic activity. The most important leading indicators include: Gross Domestic Product GDP , Unemployment report, Consumer Price Index, Producer Price Index, Retail Sales, PMI reports, Consumer Confidence, and Durable Good Orders.
It enables traders to trade bigger lots by getting more cash from your broker. Leverage varies from broker to broker and flexibility. For instance, if leverage is , it means you can easily trade up to times more than your capital.
Limit Orders It is a restrictive order that set the price and duration the trader want to execute. So, it guarantees the price, but not the execution as the broker should find somebody who wants to buy or sell the unit at the same price. Experts recommend always to place limit orders to defend your positions. Liquidity Liquidity in forex denotes the trading capability of a particular currency pair when faced with a demand.
It is indicative of the active state of the market and determined by the number of active traders and the total traded volume. Long In trading, Long refers to a position a trader can take which if the market price of an asset increases, they will be able to make a profit. Long Term Trading Long term trading refers to a type of trading where a transaction is held for an extended span, while a trader assesses the various influencing factors related to a currency pair.
Major Pairs Major pairs are those currency pairs comprising the USD as the base or counter currency as well as one of EUR, CHF, GBP, CAD, NZD, AUD or JPY. For starters, major pairs are preferable because they provide low transaction costs and adequate liquidity, thus avoiding massive slippage.
Margin Call It is the worse nightmare for a trader. It happens once the investor loses all the funds of his account. So, the broker should request him for additional money or collateral to maintain a position or even his account. Also, when a position moves against the trader and it put in danger his account.
Market Maker A market maker is a dealer that buys and sells a particular asset in large amounts for purposes of facilitating liquidity. It refers to a financial intermediary that is ready to buy and sell assets through continuous quoting of Ask and Bid prices that are open to traders on the trading platform.
Market Order It is buying or selling order a trader places to be executed at the current spot price. It will guarantee the execution but not the price.
The trader will get into the market, but he could also have a bad surprise as the order can be filled in a negative rate for the investor. Momentum The momentum indicator is a Forex leading indicator which attempts to measure the rate of change in a pair.
it can also be applied in other markets such as stocks, futures or cryptocurrencies among others. Money Management Money management in Forex denotes the rules used by traders for increasing their trading capital through reducing the risks and improving the profits. Mechanical Trading Mechanical trading systems are part of Forex trading strategies used to generate trade signals, which a trader follows irrespective of the market events.
Discretion is not required in arriving at the trading choices. It is an economic indicator that is related to US employment. Open Order Open orders are orders that await their execution in the market due to certain unfulfilled conditions.
Order Flow Order flow refers to anticipating price movements based on the number of orders in the markets. Pip A pip is the smallest measure of a pair. It usually is represented as the fourth number in a pair. When the unit moves up to 1. To the downside, when a pair moves from 1. Pivot Point The pivot point, also called just pivots, refers to technical tools that traders use to identify the price movement and understand market sentiment. They are applied in identifying trend reversals, trading ranges as well as market sentiment.
Position A position is the quantity of currency or commodity that a trader has. This can be either short or long and can be a profitable trading style, which traders would do good to know about.
Profit It is the money you actually make. Theoretically, it represents the difference between the cost price and the sale price, when the sale price is greater than the cost price. It can happen either in long or short positions. Pullback In a trend, a pullback is a movement where the price gets a retracement before continuing in the previous direction.
It happens either in bullish or dovish trends, and it shows a healthy trend. Quantitative Easing QE Quantitative easing refers to a situation whereby the central bank uses unconventional policies to stimulate the economy when conventional policies seem not to work. by issuing and buying bonds and other assets from the market.
The measures increase the price of bonds while at the same time, driving down the yield. Quote Quote currency is the secondary currency in a currency pair. It is the foreign currency in a direct quote and domestic currency in an indirect quote.
Rally When you hear somebody talking about a rally, it is saying that a continuing upside movement is happening with healthy and robust conditions. It can also be an improvement in price after a period of decline, but most of the time, it represents a long and healthy run to the north. Range A range occurs when the price action moves in determined highs and lows that are capping extensions from those levels in a prolonged extension of time in the giving timeframe. Rate It is actually the spot price that is shown in a chart or trading platform.
Also, it can be the price of any currency in terms of another when you are dealing with it. Recession Recession refers to the contraction in economic activity, with the GDP rate declining in two or more sequential quarters.
If GDP continues to decline, then that is an indication of recession, which will necessitate looking at other macroeconomic indicators to support the claim. Resistance A resistance level is a price that acts as a ceiling and tends to cap gains in a pair.
Here are probably the most widely recognized terms utilized as a part of the FOREX trading glossary. If you like to receive the best forex signals at good trade setup, you can Try free forex signals. or if you need additional important trade signals with high accuracy, Join now in Supreme or Premium forex signals plan. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. RBA Announcement The Reserve bank of Australia cut the official cash rate and target for yield on the 3-year government….
Gold: US Domestic data Gold price is moving in an Ascending channel in the 1-hour timeframe. Gold Prices are made…. NZDJPY Analysis NZDJPY is moving in the Box Pattern and Minor Ascending channel, Market has fallen from the higher high….
GBPUSD is still standing at the lower high…. Skip to content Tue, Nov 22, December 9, October 15, FOREX GDP Views 0 Comments. Ask Price — Sometimes called the Offer Price, this is the business sector cost for brokers to purchase coinage. Ask Prices are appeared on the right half of a quote — e. Bar Chart — A kind of graph utilized as a part of Technical Analysis. Every time division on the graph is shown as a vertical bar which demonstrate the accompanying data — the highest point of the bar is the high value, the base of the bar is the low value, the level line on the left of the bar demonstrates the opening cost and the flat line on the privilege of bar demonstrates the end cost.
Base Currency — is the first coin in a cash pair. A quote shows how much the base coin is worth in the quote second money. Offer Price — is the value a broker can offer monetary standards. The Bid Price is appeared on the left half of a quote — e. Dealer — the mediator in the middle of purchaser and merchant.
Most FOREX agents are connected with substantial monetary foundations and procure cash by setting a spread in the middle of offer and ask costs. Candle Chart — A sort of diagram utilized as a part of Technical Analysis. Every time division on the outline is shown as a candle — a red or green vertical bar with augmentations above and underneath the candle body.
The highest point of the augmentation demonstrates the most elevated cost for the graph division and the base of the expansion demonstrates the least cost. Red candles demonstrate a lower shutting cost than opening value, and green candles show the cost is rising. Cross Currency — A money combine that does exclude US dollars — e. Cash Pair — Two monetary standards included in a FOREX exchange — e.
Monetary Indicator — A factual report issued by governments or scholastic organizations showing financial conditions inside of a nation. To start with In First Out FIFO — alludes to the request open requests are exchanged. The main requests to be sold are the first that were opened. Outside Exchange FOREX, FX — Simultaneously purchasing one cash and offering another. Essential Analysis — Analysis of political and monetary conditions that can influence money costs.
Influence or Margin — The proportion of the estimation of an exchange to the required store. A typical edge for FOREX trading is — you can exchange coin worth times the measure of your store. Cutoff Order — A request to purchase or offer when the cost achieves a predetermined level.
Part — The extent of a FOREX exchange. Standard parts are worth around , US dollars. Real Currency — The euro, German mark, Swiss franc, British pound, and the Japanese yen are the significant monetary standards. Minor Currency — The Canadian dollar, the Australian dollar, and the New Zealand dollar are the minor monetary standards.
One Cancels the Other OCO — Two requests set at the same time with guidelines to drop the second request on execution of the first. Vacant Position — A dynamic exchange that has not been shut. Pips or Points — The littlest unit a money can be exchanged. Cite Currency — The second money in a coin pair. Rollover — Extending the settlement time of spot arrangements to the present conveyance date.
The expense of rollover is figured utilizing swap focuses taking into account financing cost differentials.
Specialized Analysis — Analysis of recorded business sector information to anticipate future developments in the business sector. Tick — The base change in cost. Exchange Cost — The expense of a FOREX exchange — commonly the spread in the middle of offer and ask costs. Volatility — A statistical measure indicating the tendency of sharp price movements within a period of time. Final Verdict on Forex Trading Glossary If you like to receive the best forex signals at good trade setup, you can Try free forex signals.
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Also read. How is china affecting Australian Economy? RBA Announcements RBA Announcement The Reserve bank of Australia cut the official cash rate and target for yield on the 3-year government… READ MORE. Market consolidating at major price areas, check Fx chart setups Gold: US Domestic data Gold price is moving in an Ascending channel in the 1-hour timeframe. Gold Prices are made… READ MORE.
Daily Market Analysis on Top 10 Forex pairs today NZDJPY Analysis NZDJPY is moving in the Box Pattern and Minor Ascending channel, Market has fallen from the higher high… READ MORE. GBPUSD is still standing at the lower high… READ MORE. Get now.
22/6/ · Top Forex Definitions. Accumulative Swing Index (ASI) A variation of the Swing Index, developed by Welles Wilder, the Accumulative Swing Index is a tool used to gain a Glossary. The most important terms related to Forex trading are presented in this glossary: Show. Forex Trading Terms. Accounting. Method of recording and outlining the financial Foreign exchange, or Forex for short, is the “place” where currencies are traded. In the forex market, currencies are traded in pairs. When a trader buys a currency, he or she is selling International. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. % of retail investor accounts lose money when trading CFDs A trading plan is a strategy set by the individual trader in order to systemize evaluation of assets, risk management, types of trading, and objective setting. Most trading plans will comprise Our A-Z glossary of trading terms will help you get a better understanding of the financial markets. Improve your knowledge with our trading glossary ... read more
The measures increase the price of bonds while at the same time, driving down the yield. Established in , the United Nations has member nations and 2 observer countries. Volatility is a statistical measure of dispersion in a pair which moves up and down. New Zealand and Australian dollars are popular too. Diversification Risk management technique which combines different investments within a portfolio in order to neutralize losses and maximize gains. An exchange rate, which can be quoted directly or indirectly, are influenced by numerous factors including the overall economy, events, and inflation. Resistance Price level for which the intensive selling can lead to price increasing up-trend.
Economic Cycle Natural flow of the economy between periods of growth and recession. If GDP continues to decline, forex trading glossary, then that is an indication of recession, which will necessitate looking at other macroeconomic indicators to support the claim, forex trading glossary. Drawdown Drawdown refers to the difference between the peak of a currency and the new low once the currency price dips. In finance, it refers to the monetary asset hoping to gain income or greater value and be sold at a higher rate. See forex trading glossary relevant lesson in our free Forex course. Bank Stress Test An evaluation administered internally by banks or supervisory authorities to gauge whether a bank has sufficient capital to withstand the effect of adverse developments.