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Forex Vocabulary & Glossary You Need to Know

Beginner

Forex Vocabulary & Glossary You Need to Know

A

Ask – Asking quoted price at which the customer can buy a currency pair.
Aussie – Slang for the Australian dollar

B

Base Currency – The Forex is the base currency refers to the first currency in a currency pair. Basis Point – the last decimal places displayed for trading. In most currency pairs, it is equivalent to 1/10,000. The most popular exception to the rule is the USD/JPY, where the basic unit 1/100
Bear – an investor who believes that prices will fall
Bear market – down market, generally with a longer period of falling prices
Bid – Ask Spread is the difference in pips supply and demand
Bull Market – generally longer period of price growth
Bundesbank – Central Bank of Germany

C

Cable – term used in the foreign exchange market for GBP
Cash Market – The market for physical buy- ing and selling of currencies
Central Bank – the main national regulatory bank traditionally, its primary responsibility is the development and implementation of monetary policy
Chartist – is an individual who studies graphs and historical data in order to find trends and predict their changes, including compliance with certain patterns and characteristics of the charts to be found: the level of sup- port and resistance, the formation of “head and shoulders”, double bottom or double top of which is considered to indicate a trend reversal
Closed Position – This position is closed equal but opposite transaction. The transaction was closed with a gain or loss
Convertible Currency – the currency that can be freely changed for other currencies or gold without special permission from the appropriate central bank
Currency Pair – two currencies that make up the exchange rate. For example, the EUR / USD is a currency pair
CAC 40 – The French stock market index

D

Day Trading – refers to opening and closing the same position or multiple positions in the course of a trading day
DAX 30 – The index of the German stock exchange
DJ 30 – Dow Jones industrial index
Double Top – a chart of price, which displays two prominent peaks. The turnaround is complete when the punctured hull. Double (double) bottom of the mirror image of this chart.

E

Euro single –  European currency officially replaced the national currencies of member states of the European Union

F

Federal Reserve – Central Bank of the United States
FTSE 100 – Represents the index of the 100 largest companies on the London Stock Ex- change in the U.K.
Fed Fund Rate – the interest rate at which banks can be registered to borrow money from the Fed.
FOMC, Federal Open Market Committee – the committee that sets the target money supply in the U.S., which tends to be implemented through Fed Fund interest rates, etc.
Forex – a term is used when talking about the foreign exchange market
Fundamental Analysis – detailed analysis of the economic and political situation with the aim of determining the future

G

Going Long – buying shares, commodity or currency for investment or speculation
Going Short – selling currency or instrument not owned by the seller
Gross Domestic Product – The total value of a country’s production, income, and expenditure within the physical boundaries of a country

H

Hedged Position One – open positions for buying and selling open positions in the same currency

I

IBEX35 – most important index of the Spanish stock exchange
Inflation – permanent increase in the general level of prices combined with falling purchasing power. Sometimes referred to as an excessive movement in the level of prices.

K

Kiwi – Slang for the New Zealand dollar

L

Leverage – Use of the margin to trade higher core capital. In Forex – to leverage, some traders are often presented as a percentage of the required margin. For example, a 1% margin will give you 100:1 leverage, so that a trader with a deposit of $10,000 to be held open positions in the amount of $1,000,000, which is 100 times more than its capital.
Long position – market position where the client has bought a currency that has not previously held. It is usually expressed in the base currency
Loonie – slang for the Canadian dollar

M

Margin amount of money or pledge, which must be answered first, and then maintained as security for losses on open positions
Margin Call – a request for additional funds sent by the clearing houses, brokers, dealers, banks or other financial institutions to provide the client required a minimum pledge to maintain position

N

NASDAQ 100 – The index of the American stock exchange
Nikkei 225 – index of major Japanese exchange

O

Open Position – Any position that is not resolved by physical payment, or the same, or counter transaction on the same day
The overbought technical condition – that occurs when prices are high and expected to fall
The oversold technical condition – that occurs when prices are considered too low and are ready to rise

P

Pip – a term used in the currency market and represents a slight shift of that course can do. Depending on the context, it is usually one basic pips (0.0001 in the case of EUR/USD, GBP/USD, USD/CHF and 01 in the case of USD/JPY, EUR/JPY)
Profit Taking – closing position to realize profits

Q

Quote indicative market price – depending on the market, it can show only an indicative price at which it traded, or the actual price at which it traded
Quote Currency – second currency in the pair. For example, the USD/JPY currency pair, the Japanese yen was quoted currency. Also referred to as a secondary currency or the counter currency

R

Range – the distance between the highest and lowest prices for a certain period
Rate – the price of one currency in terms of another
Resistance price – level at which it is expected that sales will prevail
Risk Management Identification – of potential losses and risk management usually under strict guidelines

S

S&P 500 Index – consists of the price of 500 shares that are actively traded in the U.S.
Short – means to sell an instrument without actually owning and hold a short position with expectations that the price will fall, so that he can redeem in the future at a lower price and make a profit.
Sterling – British Pound
Support price – a level at which the expected purchase, punching level of support often leads to further price falls

T

Technical Analysis – attempt to predict future market activity by analyzing market data, such as charts, trends in prices and trading volume.
Trend – refers to the direction of movement of prices

V

Volatility statistical measure – movement of the securities market over time, calculated using standard deviation. The high degree of volatility is associated with a high degree of risk.

W

Withdrawal – withdrawals from the account

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