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Glossary of Trading Terms
We provide you with professional terminology related to trading to help you understand the market better
The bank's risk comes from foreign exchange contracts with a single client.
The current price at which sellers are willing to sell a currency pair, also known as the ask price, the ask price, and the estimated bid price. If the buyer wants to buy, they must accept the asking price in order to match the transaction.
The price fluctuation of the linked currency within a certain range.
The day of the week when commercial banks are open for business and currency trading.
Prices listed inforex trading market are currency ratios. The currency in the front is the base currency. Base currency is how much currency a country needs to exchange for one unit of base currency. For example USD/JPY, USD is the base currency, EUR/USD, EUR is the base currency.
A series of operations in which the dollar is being sold against various currencies.
The current price at which buyers are willing to buy a currency pair, also known as the bid price and the bid rate . If the seller wants to sell, he must accept the bid price in order to match the trading.
Agents, who use relevant tools to execute orders to buy and sell currencies, charge commissions or spreads. Brokers profit from commissions rather than trading on the exchange themselves. Brokers in the foreign exchange market often act as intermediaries between banks, allowing buyers and sellers to trade together and collect the spread paid by both parties.
Traders think prices will rise.
Execute the trade at the specified price (limit) or lower.
A currency carry trade that holds a high interest rate currency against a low interest rate currency. Forex strategies based on the interest rate differential between the two countries can be profitable if the volatility of the currency pair is excluded.
A person who analyzes past price movements and makes charts to evaluate the market.
Brokers charge their own clients fees.
The value of one currency for another.
A statistical term referring to the relationship between two seemingly independent things. For Forex as an example, one could say that there is a high correlation between EUR and GBP, and a correlation between EUR and BRL.
Country Risk
Currency Code
Two currencies for foreign exchange trading. The "EUR/USD currency pair" is an example.
The risk of changes in foreign exchange rates that may weaken the value of overseas investments in the US dollar or any other foreign currency.
Traders trying to profit from short-term price movements often open and close orders within the same trading day.
The day the order was placed.
Acting as executor or counterparty when individuals or companies buy and sell assets.
In a trading, when the account balance is negative.
The risk that the counterparty will not be able to perform the contract, even if he is willing to do so.
A significant drop in the value of a particular currency.
Necessary information to facilitate foreign exchange trading. For example, the interest rate spread for the currency pair, daily price changes, and changes in volume.
A free exchange policy allows for fluctuations in the value of a currency, but the central bank intervenes in the exchange rate from time to time.
Quotation for the amount of USD to 1 unit of foreign currency. Some currencies are denominated in U.S. dollars per unit of foreign currency, such as British pounds.
The amount by which the value of an account falls from high to low.
Forex ECN brokers provide an electronic trading network with syndicated quotes from the world's top banks. By trading with ECN brokers, currency traders generally benefit from greater price transparency, faster processing, increased liquidity in the market and higher usability.
The strength of a country's currency depends entirely on the theory of its trade balance.
A trading account does not belong to an individual, but an account where the company designates an individual to be responsible for executing trading decisions.
EIBOR is a daily reference rate.
place of trading activities. Some famous examples include the New York Stock Exchange or the Chicago Mercantile Exchange.
Trading process.
In the case of holding a long position, sell the long currency. In the case of a short position, the purchase of a short currency results in the closing of the holding position.
A slang term for an unpopular cross currency where exotics are traded in low volume relative to the active major currencies.
Financial options that are no longer valid after the day has passed.
Fiat money is the opposite theory of the gold standard. Under a fiat currency system, the value of a currency rises and falls depending on demand and supply pressures in the market. It is this volatility that makes it useful to predict future currency values.
Complete a buy or sell order.
An order that must be executed immediately according to certain criteria such as price and quantity. If it cannot be executed, the command is cancelled immediately. The trading is reflected in the execuation or repeated quotation.
The price at which a buy or sell order was closed.
The impact of interest rates on the movement of international funds. Currency will always move from countries with lower interest rates to countries with higher interest rates.
The central bank's foreign exchange policy of maintaining a fixed official interest rate as their exchange rate with a country's currency, by intervening frequently to maintain a fixed exchange rate within a defined range. For example, the Hong Kong dollar peg exchange rate.
The exchange rate is fixed but frequently readjusted.
Value is an exchange rate determined by market movements.
Buy or sell one currency against another.
The largest foreign exchange trading center in the world is London. Other financial centers, are New York, Tokyo, Hong Kong, Singapore and Zurich. Trades pass from one center to the next, and traders can hand over orders from one bank's trading desk to colleagues at another center.
Abbreviation for foreign exchange.
Free Forex demo account, trading software and charts. Forex demo account allows you to practice forex trading without worrying about losing money. Once you've honed your skills, you can start depositing money into a Forex live account.
an order that settles on a future date. The settlement of the contract between the buyer and the seller is bound by the specified date.
different from the spot rate. The forward rate depends on expected future conditions plus or minus the spot rate.
A reserve of funds in excess of the used margin
The study of economic factors affecting prices in financial markets (GDP, trade balance, employment, etc.).
Investors used to using fundamental analysis.
In particular, low interest rate currencies.
The rights and obligations to trade goods or instruments at a certain price on a future date. Futures are different from forward contracts, which are usually traded on an exchange (not rollable), while forward contracts are mainly over-the-counter (OTC) and can be rolled over automatically.
Abbreviation for FOREX or Foreign Exchange.
Margin trading term, which means that the value of the order you hold is greater than the amount of your deposit.
Buy currency pairs.
Sell a set of currency pairs and wait for it to be bought back at a later time (hopefully when prices are lower).
A commitment made by certain countries to fix the price of their currency at a specified amount of gold, also known as the Bretton Woods system, the gold standard began in 1946, creating a system that allowed the U.S. government's Treasury Department to fix the price at a fixed price The sale of gold implements a fixed exchange rate. On August 15, 1971, President Nixon ended the Bretton Woods system.
In technical analysis, when two moving averages intersect, such as a short-term 20-day moving average crosses a long 40-day moving average. This is considered a good sign that the related currencies will move in the same direction as the moving averages.
Describes an economy with steady growth and acceptable inflation. In this sense, the economy is neither too hot nor too cold.
It is a platform designed for financial institutions to process foreign exchange, CFD, and futures market orders. It is a user-friendly front-end trading interface. It provides technical analysis, charts and expert advisors to help you develop your own trading strategy. The different functions and options of this system allow great flexibility in trading. The MetaQuotes language is released from conventional and allows programming of automated trading strategies. A free demo account is also available. MetaTrader 4 supports different languages (including English, German, Russian, French). Its working environment is Windows98/XP/Vista/7/8 and so on.
It is a platform designed for financial institutions to process foreign exchange, CFD, and futures market orders. It is a user-friendly front-end trading interface. It provides technical analysis, charts and expert advisors to help you develop your own trading strategy. The different functions and options of this system allow great flexibility in trading. The MetaQuotes language is released from conventional and allows programming of automated trading strategies. A free demo account is also available. MetaTrader 4 supports different languages (including English, German, Russian, French). Its working environment is Windows98/XP/Vista/7/8 and so on.
The MetaTrader 4 mobile trading solution is comparable to a full-featured trading terminal. You can fully access financial markets and trade from anywhere in the world. In addition, technical analysis and graphical visualization of financial tools (including offline mode without connecting to a server). Orders are encrypted and guaranteed to be absolutely secure. If you want, you can keep the complete trading history at all times.
Smoothing data on price charts makes it easier to spot trends. Average refers to a mathematical or statistical average, drawn from the original curve.
The total value of assets minus liabilities. In a trading account, equity is equal to realised and unrealised profit/loss plus deposit balance and interest minus withdrawals.
The difference in interest rates between the two currencies.
The portion of the order in the opposite currency that is not offset.
Investors who make trading decisions based on the results of a news release and its impact on the market.
Non-standard trading size. Forex standard trading currency refers to 100,000 currency units.
Also known as asking price, it refers to the price a seller is willing to sell.
A long or short order being executed that is subject to market volatility, resulting in profit or loss.
When a currency pair is overbought, its price rises much more rapidly than usual. Once overbought, it is usually expected to enter a contrarian move, meaning its price is expected to fall.
A trade order that extends from the current day to the next trading day.
The currency pair is oversold and the price falls faster than usual. . Once oversold, it is usually expected to enter a contrarian move, meaning its price is expected to rise.
official monetary value.
A system in which the value of one currency is tied to another. For example, the Chinese Yuan against the US dollar. Most pegs result in a small range.
A quote on the smallest upward or downward price movement in the forex market.
Government policy has changed to some extent. Government instability can have a negative impact on the currency.
The cost of the second currency required to purchase the first currency.
Refers to the major currency pair traded.
A currency pair for which bid and ask prices are provided.
The second in the currency pair is the counter currency. For EUR/USD, USD is the quote currency. The exchange rate quote is how many units of the second currency can be exchanged for one unit of the first currency.
The difference between the highest and lowest prices of a currency pair in a period.
The price of a currency against another currency, which can be bought or sold.
Profit and loss from closing a position.
A market where industrial activity is monitored and regulated by government agencies to safeguard investors. An example is forex trading in the UK.
Price levels, technical analysis points to price positions that will lead to continued selling of a currency.
Estimate the potential profit or loss of an open position based on the difference between the price of the previous trading day and the current trading day.
Refers to the price at which a currency pair is purchased from a dealer.
Foreign currency exchange rate risk refers to the possibility that the value of an investor's investment will decrease due to changes in exchange rates.
Funds that can be used to take risks without affecting a person's daily life.
Buying a high-interest currency pair with a low-interest currency is charged to the interest in the trading account.
Buying a low-interest currency against a high-interest currency is charged to the negative interest rate in the trading account.
Generally Speaking, a trader who holds a position overnight pays or earns, depending on the currency pair's spread.
In most cases, it refers to 100,000 units of currency.
Currency exchange charges.
Abbreviated currency pair for Australian dollar and US dollar (AUD/USD). Tells the investor how much USD (quote currency) can buy one Australian dollar (base currency).
The rate at which the central bank offers to borrow from its domestic banking system.
A popular format for studying the price action of currency pairs.
One hundredth of 1% or 0.0001.
Prices in the asset market have been falling for a long time.
The bid price is different from the ask price
The company provides trading management services to the public.
Prices in the capital market are on an upward trend.
In the process of buying a currency pair, the client pays a portion of everything. The term “margin” refers to what the investor partly points out, not partly borrows.
high-yield currency.
Funds deposited into a trading account.
Closes all unit quantities of previously opened orders. As in the case of a long position, sell all long orders. Then, your order in the market becomes zero.
A one-month to three-month economic indicator, the index measures changes in the cost of living by measuring changes in the price of a common, basket of goods and services used by most people, such as food, clothing, transportation and entertainment.
A statistical term referring to the relationship between two seemingly independent things. For Forex as an example, one could say that there is a high correlation between EUR and GBP, and a correlation between EUR and BRL.
counterparties in foreign exchange trading. For example, the opponent of online spot foreign exchange is the bank.
The exchange rate between the two non US dollar currencies
Currency Coins and banknotes issued by the government. Currency is used in the country as a unit of exchange for commodities.
The risk of changes in foreign exchange rates that may weaken the value of overseas investments in the US dollar or any other foreign currency.
Orders are opened and closed on the same trading day.
A list of all orders completed within a trading day.
Basic trading history in the foreign exchange system, rather than sending reports to clients.
Breach of contract restrictions.
A persistent and substantial decline in the prices of goods and services within an economy. It is the opposite of inflation. A longer deflation can lead to a vicious cycle of deflation. Falling prices lead to lower demand for jobs. During the cycle, the income of labor wages did not decline, and the demand continued to decline.
Financial contracts related to underlying economic fluctuations. For example, the changing value of an option is based on and asset base.
When a government allows the value of its currency to weaken against other currencies.
An account allows an institution to make trading decisions for a client, buying and selling on his or her behalf.
A term used by traders to signal that a contract has been filled.
Refers to any drop in the value of a currency or when the central bank sets monetary policy to stimulate consumption. An example of central bank easing is lowering interest rates.
Used to measure and count current economic conditions.
Try to explain the eight wave patterns used in any complete cycle of market activity.
A separate account is used to store client funds, which are stored separately from the operating funds of the broker.
In the 1970s and 1980s, many European countries linked up against deployments that would prevent large fluctuations in the value of their currencies. This was one of several moves that led to the creation of the euro.
Various equipment of the central bank is used to control the movement of foreign exchange to ensure that the country's foreign exchange reserves are not depleted.
In financial market, it refers to the exchange rate between two currencies (also known as foreign exchange rate, foreign exchange rate) specifying a certain currency with the value of another currency. For example, the exchange rate is 102 Japanese yen (JPY Japanese yen) and the US dollar (USD$) means that 102 Japanese yen is equivalent to 1 US dollar.
The spread or a series of trading and position rules specified by the forex broker.
A currency that investors can hold with confidence. Example USD or EUR.
A price action pattern in which there are three peaks, the middle one being higher than the surrounding two forming what appears to be a head and two shoulders pattern. This pattern is seen as an indicator of a trend reversal.
A term used to describe the use of two balanced investments to reduce the risk of adverse market movements, thereby minimizing any losses from price fluctuations. For example, if you sold the house in the Netherlands and moved to the UK and then bought the house (the new base currency), but you are bullish on the euro (EUR) and bearish on the pound (GBP) for a long time. To make up for the loss of a home purchase, you will need to buy an equal EUR/GBP order to make up.
Sell at the buy price offered by others.
Buying and holding the currency pair.
Master Agreement for International Foreign Exchange Transactions
An increase in commodity prices leads to a decrease in the purchasing power of money.
Client's initial deposit determines the corresponding maximum trading size
When executing an order, the minimum amount that must be paid in cash.
Open and close orders on the same trading day.
The use of currency entails charging or paying interest. Expressed as an annual percentage interest rate on the principal. Interest rates tend to move in response to inflation and changes in central bank policy.
Introduce clients to individuals or companies who recommend forex brokers for commissions or partial spread rebates.
A term coined by financial news to refer to Japanese households who trade interest rates and become the main Japanese yen trading parties. It comes from the large number of Japanese housewives who trade foreign exchange and has a greater impact.
The yen is the currency unit of Japan. It is the third most traded currency in the foreign exchange market after the US dollar and Europe's euro.
A client with small trading volume, trading holding time, and target profit rarely takes overnight positions.
An order that must be executed immediately according to certain criteria such as price and quantity. If it cannot be executed, the command is cancelled immediately. The order is reflected in the execution or repeated quotation.
Trading term, derived from New Zealand's rich kiwifruit.
Economic indicators are used to predict future economic activity, such as the S&P 500.
The percentage of margin that can be opened for the largest order size. Using a deposit of $5000 and leverage of 50, traders can trade orders with a face value of $250,000. Leverage allows you to profit quickly but lose money just as quickly.
The delivery responsibility is part of the monetary reality trading. In speculative forex market, the currency is not liable for delivery, and all profits and losses are deducted from the margin.
An order to trade at a specified price or better.
Line charts are the simplest form of charts and are drawn by connecting various price levels over a specified period of time with lines.
A term used to describe the demand for trading generated by a large number of buyers and sellers in a marketplace.
When executing a long order against a currency pair, it means buying the previous currency and shorting the latter currency. A long order indicates that the base currency is being bought.
Trading slang for the US/CAD currency pair.
The standard quantity of 100,000 units traded in a particular currency, also known as a standard lot.
The minimum margin set by the position, the client must keep his margin account equity above a certain value.
Accounts must have a certain minimum margin to support all open orders.
Central banks regularly intervene to stabilize and/or manipulate the direction of the national currency.
Minimum Deposit Requirements Maintain an open minimum deposit requirement. For example, for an open $250,000 market cap order with a leverage of 50, the required margin would be $5000.
An account that allows buying and selling using leverage.
To maintain the current position size, more funds must be deposited into the account, because the account equity is about to fall below the required minimum margin.
An order to be executed immediately at the current best price.
Latest quotes for currency pairs.
Buy and sell a currency pair
The contract expiration time for the physically delivered currency. In the foreign exchange market, it is usually two days after opening a position. In practice, traders do not take delivery, but profits and losses are directly reflected in their account balances.
Buy the exact same unit of a currency pair to offset an earlier short sell order.
Items that can be bought and sold at the current date and price.
A market where people buy and sell actual financial instruments (currency).
The market price at which a currency is bought or sold on the spot market.
The difference in value between the bid and ask prices of a currency pair
A market that can accommodate massive buying and selling without major volatility. For example, the EUR/USD trade.
AKA(GBP)
The same direction order is executed when the price of the currency reaches or passes the specified level.
A trader's nickname for the Swiss franc.
Buying or selling a currency pair at the instruction of a client, when executed, will result in the order being filled at the existing position and realizing a profit.
Predictive analysis of price movements based on market data such as historical price trends and moving averages, volume, open interest, etc.
Technical resistance and support levels, as well as overbought and oversold levels, determined by the market movement, not the market emotion.
A functional tool used by technical analysts to predict future price movements of a security or commodity.
The smallest price movement possible, either up or down. Also known as pips.
The name of a currency or commodity in trading software.
A complex combination of programs that provide you with professional buy/sell currency advice. A trading model whose assessment is based on historical analysis, forecasting future prices and records related to your trades, reporting on currency positions with recommendations, and using these actions to forecast volatility in the foreign exchange market.
A software application for foreign exchange transactions, usually used over the Internet.
Buy or sell currency pairs.
A fee for participating in the purchase or sale of a currency pair.
The current market direction, whether up or down or sideways.
Currencies that cannot be freely traded due to foreign exchange regulations.
A widely used amount of money. In forex trading, one unit of U.S. dollar is equal to one U.S. dollar, and one unit of Euro is equal to one Japanese yen. One unit is the minimum trade size.
It is also a virtual net worth. Your current potential account balance that can be realized by closing the position. For example, if your real account balance is $575 and an open order 2 with a $25 profit will show your virtual account balance as $600.
Measures how much a currency has moved over time.
The day when the national bank of a particular currency is open for business.
A billion dollar deal term.