Trading Central analytics
Look at the prospects of financial markets through the lense of professional knowledge.
Adjustment - official action normally by either change in the internal economic policies to correct a payment imbalance or in the official currency rate, which has influence with forex.
A currency is said to 'appreciate' when it strengthens in price in response to online forex market demand.
Arbitrage forex - is the purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related forex market, in order to take advantage of small price differentials between markets.
Ask price - is the price at which the forex trading market is prepared to sell a specific Currency in a Foreign Exchange Contract or Cross Currency Contract. At ask price, the trader can buy the base currency. In the quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.4527/32, the ask price is 1.4532; meaning you can buy one US dollar for 1.4532 Swiss francs.
At Best - is an instruction given to a dealer to buy or sell at the best rate that can be obtained.
At or Better - is an order to deal at a specific or better rates.
Trade balance - is the value of a country's exports minus its imports.
Bar Chart it is a type of chart which consists of four significant points: the high and the low prices, which form the vertical bar, the opening price, which is marked with a little horizontal line to the left of the bar, and the closing price, which is marked with a little horizontal line of the right of the bar.
Base Currency - is the first currency in a Currency Pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF rate equals 1.6215 then one USD is worth CHF 1.6215 In the online forex trading markets, the US Dollar is normally considered the base currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British Pound, the Euro and the Australian Dollar.
The Bear Market - is a market distinguished by declining prices.
Forex Broker - is an individual or firm that acts as market intermediary, putting together buyers and sellers for a fee or Broker Commission.
Bretton Woods Agreement it is agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold at US $35 per ounce. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rates for the major currencies.
A Bull Market - is a market distinguished by rising prices.
Cable FX - is a trader jargon referring to the Sterling/US Dollar exchange rate. So called because the rate was originally transmitted via a transatlantic cable beginning in the mid 1800's.
Japanese Candlestick Chart - is a chart that indicates the trading range for the day as well as the opening price and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.
Carry Trade refers to the simultaneous selling of a currency with a low interest rates, while purchasing currencies with higher interest rates. Examples are the JPY crosses such as GBP/JPY and NZD/JPY.
Cash Market it is the market in the actual financial instrument on which Options Contract or Futures Contract is based.
Central Bank it is government or quasi-governmental organization that manages a country's monetary policy. For example, the US central bank is the Federal Reserve Bank, and the German central bank is the Bundesbank.
Chartist - is an individual who uses charts and graphs and interprets historical data to find trends and predict future movements on online forex market.
Cleared Funds - are the funds that are freely available, sent in to settle a trade.
Closed Position exposures in Foreign Currencies that no longer exist. The process to close a position is to sell or buy a certain amount of currency to offset an equal amount of the open position. This will 'square' the postion.
The Clearing - is the process of settling a trade.
Broker Commission - is a transaction fee charged by a broker.
Counter Currency - is the second listed Currency in a Currency Pair.
Cross Courses it is Currency Pair that does not include the U.S. dollar. For example: EUR/JPY or GBP/CHF.
Forex glossary term "currency pair" it is two currencies that make up a foreign exchange rate. For Example, EUR/USD.
Currency Basket - is a selected group of currencies in which the weighted average is used as a measure of the value or the amount of an obligation. A currency basket functions as a benchmark for regional currency movements - its composition and weighting depends on its purpose.
Currency Risk it is the probability of an adverse change in Exchange Rate.
Forex trade where both sides make and take actual forex delivery of the currencies traded.
Currency Depreciation - is a fall in the value of a currency due to forex market forces.
Direct Quote - is a foreign exchange rate quoted as the domestic currency per unit of the foreign currency.
Discount Rate - is an interest rate that an eligible depository institution is charged to borrow short-term funds directly from the Federal Reserve Bank.
Double Bottom term is used in technical analysis to describe the drop of a stock (or index), a rebound, another drop to the same (or similar) level as the original drop, and finally another rebound.
Double Top term is used in technical analysis to describe the rise of a stock, a drop, another rise to the same level as the original rise, and finally another drop.
Downtick - is a transaction on an exchange that occurs at a price below the previous transaction.
The principal goal of the EMU Union is to establish a single European currency called the Euro, which will officially replace the national currencies of the member EU countries in 2002. On Janaury1, 1999 the transitional phase to introduce the Euro Currency began. The Euro now exists as a banking currency and paper financial transactions and foreign exchange are made in Euros. This transition period will last for three years, at which time Euro notes an coins will enter circulation. On July 1,2002, only Euros will be legal tender for EMU participants, the national currencies of the member countries will cease to exist. The current members of the EMU Union are Germany, France, Belgium, Luxembourg, Austria, Finland, Ireland, the Netherlands, Italy, Spain and Portugal.
The European Central Bank (ECB) - is the Central Bank for the new European Monetary Union (EMU Union).
Exchange Rate it is the price of one country's currency expressed in another country's currency.
The Federal Reserve - is the Central Bank for the United States.
Open positions are closed according to the FIFO accounting rule. All positions opened within a particular Currency Pair are liquidated in the order in which they were originally opened.
Dealer jargon used to describe a position that has been completely reversed, e.g. you bought $500,000 then sold $500,000, thereby creating a neutral (flat) position.
Profit/loss on open positions at the current prices.
FX (Forex) - is financial market for the trading of currencies.
Glossary forex term "Forward Contract" - is the pre-specified Exchange Rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved.
Fundamental Analysis - is an analysis of economic and political information with the objective of determining future movements in the financial market.
A Futures Contract from forex glossary - an obligation to exchange a good or instrument at a set price on a future date. The primary difference between Future (forex) and Forward (forex) is that the Futures are typically forex online traded over an exchange (Exchange-Traded Contracts - ETC), versus fx forwards, which are considered (OTC) Over the Counter Contracts. An forex glossary term OTC is any contract NOT traded on an exchange.
Forex Free Margin it is funds on the trading account, which may be used to open a position. It is calculated as equity minus Necessary Margin.
Gap forex - is a break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between.
Good Till Cancelled (GTC) order, also called open order, is an order to buy or sell a security at a set price that is active until the investor decides to cancel it or the trade is executed.
Gross Domestic Product (GDP) - is a total value of a country's output, income or expenditure produced within the country's physical borders.
(GNP) Gross National Product it is Gross Domestic Product plus income earned from investment or work abroad.
Greenback Dollar - is a slang term for
Hard Currency - is a currency in which investors have confidence, such as that of an economically and politically stable country.
Head and Shoulders Chart - is a technical analysis term used to describe a chart formation in which a stock's price: rises to a peak and subsequently declines, then, the price rises above the former peak and again declines, and finally, rises again, but not to the second peak, and declines once more. The first and third peaks are shoulders, and the second peak forms the head.
Hedged Margin it is the required amount sufficient to open and maintain Locked Positions.
A Hedge Fund - is an aggressively managed portfolio of investments that uses advanced investment strategies such as Financial Leverage, Long Position, Short Position and derivative position in both domestic and international markets with the goal of generating high returns.
Hit the Bid - is an acceptance of purchasing at the offer or selling at the Bid Price.
Hong Kong Dollars - is the currency of Hong Kong.
In forex trading, a currency quote that is provided by a Market Maker to a trading party but that is not firm.
Forex glossary term "Initial Margin" - is the initial deposit of collateral required to enter into a position as a guarantee on future performance.
Indirect Quote - is a foreign exchange rate quoted as the foreign currency per unit of the domestic currency.
Instant Execution - is the mechanism of providing quotes to the client without prior request. The client receives the Quotes Flow in real-time and can send an instruction to make a Transaction forex anytime.
Action by a Central Bank to effect the value of its currency by entering the forex trading market. Concerted intervention refers to action by a number of central banks to control the exchange rates.
Japanese Yen - is the official currency of Japan.
The Kiwi - slang for the New Zealand dollar forex.
Economic Leading Indicators - the statistics that are considered to predict future economic activity.
Forex Leverage - the ratio in respect of Margin and Transaction Size: 1:33, 1:100, 1:200, 1:300, 1:400, 1:500. e.g. the ratio 1:100 means that in order to make a deal the required amount on the trading account is hundred times less than transaction size.
LIBOR Rates - London Inter-Bank Offered Rate. Banks use LIBOR when borrowing from another bank.
Limit Order - is an Order forex with restrictions on the maximum price to be paid or the minimum price to be received. As an example, if the current price of USD/YEN is 117.00/05, then a limit order to buy USD would be at a price below 102. (ie 116.50)
Liquidations - the closing of an existing position through the execution of an Offsetting Transaction.
Liquidity forex - is the ability of online forex trading market to accept large Transaction forex with minimal to no impact on price stability.
The Lot - a unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.
Locked Positions - Long Position and Short Position of the same size opened on the trading account for the same instrument. For example, if the client opens two buy lots, and three sell lots for the same instrument, then two buy lots and two sell lots are identified as locked positions, and one buy lot is identified as non-locked position.
Manifest Error - is an error of Forex Dealer who opens/closes a position or executes an Order forex at the price which significantly differs from the price of this instrument in the Quotes Flow at the moment of performing this action, or any other dealer’s act or omission in respect of the prices which are significantly different from online forex market prices.
Margin - is the required equity that an investor must deposit to collateralize a position.
Margin Level - is the ratio of equity to the Necessary Margin expressed in percentage. It is calculated as (equity/margin)*100%.
Glossary term "FX Market Maker" - it is Forex Dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial instrument.
Financial Market Risk - exposure to changes in forex market prices.
Market Opening - time when the forex market opens after weekends, holidays or time gaps between the trading sessions.
Necessary Margin is demanded by the company, this is the sum of money that needs to support Opened Positions. For each tool this sum will be determined by credit holder and the value of the opening position.
Net Position - is the amount of currency bought or sold which have not yet been offset by opposite Transaction forex.
An operation of depositing/withdrawing assets to/from the Trading Account or operation of lending /reimbursement of the credit.
Open Order - is an order that will be executed when online forex trading market moves to its designated price. Normally associated with Good Till Cancelled Orders.
Open Position - is an active trade with corresponding unrealized Profit/Loss, which has not been offset by an equal and opposite deal.
A trade that remains open until the next business day.
Order forex - is a client's order to buy or sell a certain amount at a given rate.
Order Level - the price indicated in the Order forex.
The term over-the-counter market is used to describe any Transaction forex that is not conducted over an exchange.
Pending Order - is a client's order to open a position when a price reaches a certain level.
Pip forex (point) - the minimum value of the change in the cost of currency. Usually it is the second or the fourth decimal sign after the point, that is 0,01 or 0,0001 accordingly. See also: Tick forex.
Point-and-Figure Chart - is a chart that plots day-to-day price movements without taking into consideration the passage of time.
Price Transparency describes Quotes forex to which every market participant has equal access.
The stream of prices for each instrument in the online forex trading platform.
The difference between the highest and lowest price of a future recorded during a given online forex trading session.
Forex Resistance it is term used in Technical Analysis indicating a specific price level at which analysis concludes people will sell.
Sell Limit Order - is an order to execute a Transaction forex only at a specified price (the limit) or higher.
Software product MetaTrader Server 4.
The comparatively large upward or downward movement of a price in a short period.
Spot Price - is the current online forex market price. Settlement of spot transactions usually occurs within two business days.
Sterling Currency - slang for British Pound.
Stop Loss Order - ia an order type whereby an Open Position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor's position. As an example, if an investor is long USD at 156.27, they might wish to put in a stop loss order for 155.49, which would limit losses should the dollar depreciate, possibly below 155.49.
An instruction to close the client's Open Position without the consent of the client or any prior notice in case of insufficient funds required for maintaining open positions.
Swap forex - is a currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward Exchange Rate.
Swissy - is a market slang for Swiss Franc.
Take Profit orders are used to lock in profits in the event the rate moves in a favorable direction.
Technical Analysis - is an effort to forecast prices by analyzing market data, i.e. historical price trends and averages, volumes, open interest, etc.
Tick Forex- the minimum value of the change in the cost of currency. Usually it is the second or the fourth decimal sign after the point, that is 0,01 or 0,0001 accordingly. See also: Pip forex.
Thin Market - is the market in which Quote forex in forex trading platform are rare as opposed to the normal market conditions. Such conditions are usual for Christmas, national holidays in G7, from 20:00 till 00:00 GMT etc.
Tom-Next - the simultaneous buying and selling of a currency for Delivery forex the following day.
Forex Trader - is a market participant, who makes deals in order to gain profit.
Forex Trading Account - is the unique personified registration system of all completed Transaction forex, Open Position, Order forex and deposit/withdrawal transactions in the metatrader trading platform.
Transaction forex - is an operation of buying or selling a financial instrument.
Transaction Date - the date on which forex trade occurs.
Transaction Size - Lot Size multiplied by number of lots.
Tool Forex - is a Currency Pair or a contract for difference.
Trend Forex - is a direction of forex trading market movement: up, down or sidewise.
Turnover - the total money value of all executed Transactions forex in a given time period, volume.
When both a bid and offer rate is quoted for a Transaction forex.
The theoretical gain or loss on Open Position valued at current market rates, as determined by the Forex Broker in its sole discretion. Unrealized Gains Losses become Profit/Loss when position is closed.
Uptick - is a new price quote at a price higher than the preceding quote.
The Uptick Rule - in the U.S., a regulation whereby a Security forex may not be sold short unless the last trade prior to the short sale was at a price lower than the price at which the short sale is executed.
US Prime Rate - is the interest rate at which US banks will lend to their prime corporate customers.
Value Date - is the date on which counterparts to a financial transaction agree to settle their respective obligations, i.e., exchanging payments. For spot currency transactions, the value date is normally two business days forward.
Variation Margin - funds Forex Broker must request from the client to have the required margin deposited. The term usually refers to additional funds that must be deposited as a result of unfavorable price movements.
Volatility forex - is a statistical indicator which characterizes the tendency of forex market price change.
The WTO - International government organization (with over 120 members) designed to shape an international trade system; it was created in 1994 as the GATT successor. WTO headquater is in Geneva. Although the Soviet Union was a member of the GATT, Russia is not a member of WTO yet.
Forex ECN broker provide access to an electronic trading network, supplied with streaming quotes from the top tier banks in the world. By trading through an ECN broker, a currency trader generally benefits from greater price transparency, faster processing, increased liquidity and more availability in the marketplace.
Straight Through Processing (STP) in our forex glossary - is a direct order execution. In this model, the brokerage company is an intermediary between clients and providers of liquidity. Clients orders in the STP model are automatically sent to the provider of liquidity, while Forex Broker gets a commission and a portion of the spread. In this model, the brokerage company is interested in increasing the volume of trades, because it makes profit by taking commission for each Transaction forex. There is no conflict of interest between the broker doing STP and his client.