Ask Price of the offer, the price you buy for.
Bank Rate The percentage rate at which central bank of a country lends money to the country's commercial banks.
Bar Chart A type of chart used in Technical Analysis. Each
time division on the chart is displayed as a vertical bar which show the following
information – the top of the bar is the high price, the bottom of the bar is the
low price, the horizontal line on the left of the bar shows the opening price and
the horizontal line on the right of bar shows the closing price.
Base Currency is the first currency in a currency pair. A
quote shows how much the base currency is worth in the quote (second) currency.
For example, in the quote - USD/JPY 112.13 – US dollars are the base currency, with
1 US dollar being worth 112.13 Japanese yen.
Bid Price of the demand, the price you sell for.
Bid/Ask Spread is the difference between the bid price and
the ask price in any currency quotation.
Broker The market participating body which serves as the
middleman between retail traders and larger commercial institutions.
Cable A Forex traders slang word for the GBP/USD currency
Candlestick Chart A type of chart used in Technical Analysis.
Each time division on the chart is displayed as a candlestick – a red or green vertical
bar with extensions above and below the candlestick body. The top of the extension
shows the highest price for the chart division and the bottom of the extension shows
the lowest price. Red candlesticks indicate a lower closing price than opening price,
and green candlesticks indicate the price is rising.
Carry Trade In Forex, holding a position with a positive
overnight interest return in hope of gaining profits, without closing the position,
just for the central banks interest rates difference.
CFD A Contract for Difference special trading instrument
that allows financial speculation on stocks, commodities and other instruments without
Commission Broker commissions for operation handling.
CPI Consumer price index the statistical measure of inflation based
upon changes of prices of a specified set of goods.
Cross Currency A currency pair that does not include US dollars
– e.g. EUR/GBP.
Currency Pair Two currencies involved in a Forex transaction
– e.g. GBP/USD.
ECN Broker A type of Forex brokerage firm that provide its
clients direct access to other Forex market participants. ECN brokers don't discourage
scalping, don't trade against the client, don't charge spread (low spread is defined
by current market prices) but charge commissions for every order.
Economic Indicator A statistical report issued by governments
or academic institutions indicating economic conditions within a country.
Flat Neutral state when all your positions are closed.
Foreign Exchange (Forex, FX) Simultaneously buying one currency
and selling another.
Fundamental Analysis The analysis based only on news, economic
indicators and global events.
GTC (Good Till Cancelled) Order to buy or sell of a currency
with a fixed price or worse. The order is alive (good) until 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 which is aimed toward fast
but small and short-term profit from an intra-day trading. Jobber rarely leaves
open positions overnight.
Leverage or Margin The ratio of the value of a transaction
to the required deposit. A common margin for Forex trading is 100:1 – you can trade
currency worth 100 times the amount of your deposit.
Limit Order An order to buy or sell when the price reaches
a specified level.
Liquidity The measure of markets which describes relationship
between the trading volume and the price change.
Long The position which is in a Buy direction. In Forex,
the primary currency when bought is long and another is short.
Loss The loss from closing long position at lower rate than
opening or short position with higher rate than opening, or if the profit from a
position closing was lower than broker commission on it.
Lot Definite amount of units or amount of money accepted
for operations handling (usually it is a multiple of 100).
Major Currency USD, Euro, Swiss franc, British pound, and
the Japanese yen are the major currencies.
Margin Money the investor needs to keep at broker account
to execute trades. It supplies the possible losses which may occur in margin trading.
Margin Account Account which is used to hold investor's deposited
money for FOREX trading.
Margin Call Demand of a broker to deposit more margin money
to the margin account when the amount in it falls below certain minimum.
Market Order Order to buy or sell a lot for a current market
Market Price The current price for which the currency is
traded for on the market.
One Cancels the Other (OCO) Two orders placed simultaneously
with instructions to cancel the second order on execution of the first.
Open Position An active trade that has not been closed.
Order Order for a broker to buy or sell the currency with
a certain rate.
Pip (Point) The last digit in the rate (e.g. For eur/usd
1 point = 0.0001).
Pivot Point The primary support/resistance point calculated
basing on the previous trend's High, Low and Close prices.
Principal Value The initial amount of money of the invested.
Profit (Gain) Positive amount of money gained for closing
Quote Currency The second currency in a currency pair. In
the currency pair USD/EUR the euro is the quote currency.
Realized Profit/Loss Gain/loss for already closed positions.
Resistance Price level for which the intensive selling can
lead to price increasing (up-trend)
Rollover Extending the settlement time of spot deals to the
current delivery date. The cost of rollover is calculated using swap points based
on interest rate differentials.
Settled (Closed) Position Closed positions for which all
needed transactions has been made.
Slippage Execution of order for a price different than expected
(ordered), main reasons for slippage are "fast" market, low liquidity and low broker's
ability to execute orders.
Spread Difference between ask and bid prices for a currency
Stop Loss Order to sell or buy a lot for a certain price
or worse. It is used to avoid extra losses when market moves in the opposite direction.
Support Price level for which intensive buying can lead to
the price decreasing (down-trend).
Technical Analysis Analysis of historical market data to
predict future movements in the market.
Tick The minimum change in price.
Transaction Cost The cost of a Forex transaction – typically
the spread between bid and ask prices.
Trend Direction of market which has been established with
influence of different factors.
Unrealized (Floating) Profit/Loss A profit/loss for your
Useable Margin Amount of money in the account that can be
used for trading.
Used Margin Amount of money in the account already used to
hold open positions open.
Volatility A statistical measure of the number of price changes
for a given currency pair in a given period of time.