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Trade
Common Forex Terms
Many beginners who are just starting their familiarity with the currency market, have problems of understanding of certain specific terms used when trading Forex. On this page we have collected the most frequently used Forex terms that you will encounter in almost any literature relating to the foreign exchange market. The base of Forex terms will be expanded and updated, so stay tuned to this page.
Ask (Ask)
The purchase price is the rate at which bought any financial instrument. In the quotation of the currency pair is listed second. For example, the quotation EUR/USD 1.2771/1.2773 purchase price – 1.2773. This is the price at which a trader is able to purchase a so-called base currency for the quote currency here - 1 Euro 1.2773 of the U.S. dollar.
Balance (Balance)
The financial result on a trading account without taking into account any open positions.
Bid (Bid)
The selling rate, i.e. the price at which the possible sale of any financial instrument. In the quotation of the currency pair is listed first. For example, the quotation EUR/USD 1.2771/1.2773 sale price 1.2771. For this price, the trader can sell the so-called base currency for quote currency, here - 1 Euro per 1.2771 US dollar.
A big figure (Big figure)
In the slang of the so-called change of course for 100 points, or base number.
Bull (Bull)
Traders who believe that the currency will rise.
Currency intervention (Currency intervention)
State intervention in the face of Central Bank operations in the foreign exchange market.
Volatility (Volatility)
Variability, the variability of currency exchange rates. High volatility if there are sudden currency fluctuations with significant amplitude.
Gap (Gap)
The difference between the closing price in the previous period and the opening price the following. Typical for weekend days – Friday close and Monday open.
Demo account (Demo account)
The account opened for the practical training of Forex trading. Opening such an account, You will be able to trade in real market conditions using virtual money. The use of a demo account allows you to get initial skills of work, to get acquainted with the principles and tricks of the trade to master the program's interface of the trading platform to test out your trading strategy on live market, it is absolutely not risking financial losses. True, the profit You received on the demo account cannot be cashed because of its "virtuality".
Dealing Center or a broker (Dealing Center)
As a rule, non-banking financial institution that provides its customers leverage their existing investment on the terms of margin trading for transactions in Forex and CFD (contracts for difference). Transactions through a dealing Desk are usually only for the purpose of speculation and profit, and not used to pay any accounts or services.
Dealing centers provide all transactions on the market, using only your own account, not customer accounts.
To generate quotes for their customers using DTS data to international information systems (such as Reuters or Bloomberg), sometimes several. They do not share their own quotes in such a system. Typically, clients dealing centers operate on the market by means of trading terminals operating in the presence of the Internet.
Legal aspects of the activities of DTS in the RF have not yet been resolved, so that the DC clients often have to rely on the integrity of the management of DTS in the performance of their obligations. Many of the dealing centers of Russia the legal status of the bookmakers, who take bets on exchange rate movement of the currency pairs, so as to carry out conversion operations, you need a license for banking activity. DC often have a foreign "residence permit".
Long position (long)
The position is opened to buy. The purchased currency is called the long and padavano – short.
The Dow Jones index (Dow Jones Industrial Average)
The most popular indicator of the state of Affairs in the stock market. Is calculated as the weighted average price for 30 types of shares, at this time the most actively traded on the new York stock exchange NYSE (New York Stock Exchange).
Close position (Close position)
To complete to complete the transaction of purchase and sale of currency.
Green back (Greenback)
Slang meaning the US dollar.
Cable, cable (cable)
Slang designation of the exchange rate GBP/USD.
Kiwi (Kiwi)
Slang for the new Zealand dollar NZD.
Risk control (Risk Control)
The application of the rules of money management to limit potential losses.
Short position (short)
The position is opened for sale.
Leverage (Leverage)
The ratio between own and borrowed funds, established by agreement between the trader and brokerage company.
The cross rate (Cross-Rate)
The exchange rate of the currency pair, no single currency is not the U.S. dollar, Examples of cross - rates AUD/JPY, EUR/CHF, GBP/NZD.
Liquidity (Equity)
Constantly changing due to market fluctuations, the balance of the balance of the trader, which will remain for closing all currently open positions.
Limit order (Limit order)
The disposal of the trader to his broker to buy or sell specified currency at a more favorable rate than the current time. That is, in the case of sales - higher the rate than the existing one, and for purchase below. The price indicated in the order, is called a limited (limit price). Applies limit order for taking profit or loss, and to open a new position after hitting a pre-determined level without the direct involvement of the trader.
Lot (Lot)
Standard transaction volume on Forex market for about $ 100,000.
Margin (Margin)
The account of the client, used by his broker as collateral for commercial transactions.
Market makers (Market makers)
Large Bank holding companies and financial companies that have the ability to affect the current exchange rate due to the importance of his operations in the total volume of the foreign exchange market. Market makers affect current courses currency pairs by settlements and work with smaller banks that are active participants of the currency market.
Bear (Bear)
A market participant who plays on the depreciation of the currency.
Overnight (Overnight)
Transfer of open positions (trades) on the next working day.
Basic interest rate (Discount Rate)
Prime interest rate is the rate at which the national Central Bank lends to financial institutions of their country.
Ozzy (Aussie)
Slang name for the Australian dollar.
Open position (Open)
To make a transaction to buy or sell the currency.
Pound (Pound)
Slang for a British pound.
Overbought (Overbought)
The situation in the Forex market that occurs after a sharp and significant increase in prices.
Oversold (Oversold)
The market situation that occurs after a sharp and significant decline in prices.
Pop, point (Pip point)
Minimum price change currency. This is usually the last digit of writing the exchange rate in the quote currency.
Support (Support)
Quotes of the currency pair, at which probably the appearance on the market of a significant number of buyers that will lead to the termination of price reduction.
Losses (Loss)
Loss, loss as a result of the operation.
Profit (Profit)
A positive result on the account as a result of the investment or the transaction minus all costs.
Slippage (Slippage)
The market situation in which fixation losses on Stop Loss orders executed at the worse rate than it was specified in the order. This happens when the quotation of the currency pair passes the Stop Loss level very quickly. The slippage can sometimes reach up to several tens of points.
Rally (Rally)
The rapid change in the prices or quotes in the market.
Resistance (Resistance)
Quotes of the currency pair, at which probably the appearance on the market of a large number of sellers, which will lead to the cessation of growth rates.
Spread (Spread)
The difference between the sale price Ask and the Bid in the quote currency pair.
Stop order (Stop order)
The disposal of the trader to his broker to buy or sell specified currency at a less advantageous rate than the existing one in the given time. In the case of a sale is lower rate than the existing one, and in the case of purchase – higher. Used stop order to lock in profits or loss, and to open a new position after hitting a pre-determined level without the direct involvement of the trader.
Trend, trend (Trend)
Sustainable for a long period of price movement or direction of growth or reduction. Accordingly, trends are called ascending and descending.
Technical analysis (Technical Analysis)
Market analysis, which is performed with the help of mathematical models. Thus, on the basis of statistical methods of time series analysis, analyzing price dynamics over the past period, the system runs the forecast for the coming period.
Tick (Tick)
The minimum size of price fluctuations (unit quotation) received through the trading terminal.
The fed, the Federal Reserve (the Fed, Federal Reserve, FRS)
Regulatory organization of the US financial system, which performs the role of the Central Bank of the United States of America.
The Federal open market Committee (FOMC)
Management unit of the Federal reserve system of the United States, in particular, it defines the Federal interest rates.
Flat (Flat)
The lack of clear trends in the price movement.
Fundamental analysis (Fundamental Analysis)
Market analysis based solely on economic news, market economic indicators and global political and other events.
The Central Bank (Central Bank)
The main financial regulatory body of the country or group of countries in the monetary Union.
The Central Bank has the exclusive right to issue banknotes and government debt, is a "government" agent Bank performs supervision of commercial and regional state banks, conducts activities on monetary policy, including establishes the basic interest rate.
On the right of capital ownership of the Central banks are state, joint stock, and with mixed capital. An example of the Central Bank with state capital is the German Federal Bank (Deutsche Bundesbank), a fully joint-stock capital controls the us Federal Reserve, the Bank of Japan belongs to the third, mixed type.
The European Central Bank created by the joint efforts of a group of countries belonging to the European Union and the Euro zone - the pan-European currency.
As a rule, Central banks perform functions for storage of obligatory reserves of commercial banks and other financial institutions that provide credit resources, conduct mutual settlements on their financial obligations.
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| Category: Forex | Added by: (30.10.2017)
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| Views: 260
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