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Forex Glossary Index: A | B | C | D | E | F | G | H | I | K | L | M | N | O | P | Q | R | S | T | U | V | W | Y
Forex Tutorial: Forex Glossary----- A -----
Accelerator/Decelerator Oscillator (AC)A technical analysis indicator for identifying buying or selling opportunities. (Read more>>) ADP National Employment ReportAn estimate of monthly increase or decrease in the total number of private (Read more>>) ADP Nonfarm Employment ChangeAn estimate of monthly increase or decrease in the total number of private (Read more>>) ADXAverage Directional Movement Index. ADX is a technical analysis indicator (Read more>>) AlligatorA technical analysis indicator for identifying trend of price movement. An (Read more>>) Andrew's PitchforkA technical analysis charting method developed by Alan H. Andrews to (Read more>>) ArbitrageThe practice of buying a financial instrument in one market and simulta- (Read more>>) Ascending TriangleA chart pattern of sideways movement in technical analysis. It looks like a (Read more>>) AskThe rate that a currency pair is offered for traders to buy in forex market. (Read More>>) Ask PriceThe rate a currency pair is offered for sale in a forex market. It is shown (Read more>>) Asking PriceThe rate a currency pair is offered for sale in a forex market. It is shown (Read more>>)
ATRAverage True Range. ATR is a technical analysis indicator developed by J. (Read more>>)
At-the-MarketAn instruction given to a forex broker to buy or sell at whatever price that (Read more>>) At-the-MarketsAn instruction given to a forex broker to buy or sell at whatever price that (Read more>>) At-the-Market OrderAn instruction given to a forex broker to buy or sell at whatever price that (Read more>>) At BestAn order to buy or sell at the best rate obtainable in the forex market.
Automated Forex TradingAutomated Forex Trading refers to program trading of currency pairs. Forex(Read more>>) Average Directional Movement Index (ADX)A technical analysis indicator that measures the trend strength of the price (Read more>>)
Average True Range (ATR)Average True Range (ATR) is a technical analysis indicator developed by J. (Read more>>) Awesome Oscillator (AO)
----- B ----- Back TestingBack testing in forex trading means using historical data to test and/or (Read more>>) Balance of TradeThe value of a country's exports minus its imports. If the import of the (Read more>>) Bar ChartA type of chart that portrays the range between the high and the low of (Read more>>) Base CurrencyIn forex trading, base currency refers to the first currency in a currency, (Read more>>) Basis Point1 basis point is equal to 1/100 of 1 percent. In forex readings, basis point is(Read more>>) Bear MarketA bear market is a market in which prices are falling. Opposite of bull market .
Bears PowerA technical analysis indicator for generating buying signals. The Bears (Read more>>) Bear TrapBear trap is a technical analysis term describing the situation that the price (Read more>>) Bearish EngulfingBearish engulfing is a chart pattern in candlestick charting describing the (Read more>>) Bid PriceThe price a forex trader can sell a currency. It is shown on the left side of (Read more>>) Bid/Ask SpreadThe difference between the bid price and the ask price. Forex brokers may (Read more>>) BodyA rectangle represents the difference between the opening and the close (Read more>>) Bollinger BandsDesigned by John Bollinger in the early 1980's, Bollinger Bands are statist- (Read more>>) BreakoutIn forex trading, breakout refers to a price movement that pass through (Read more>>) Breakout TradingA trading strategy that focuses on identifying trading opportunities when (Read more>>)
Break-Even PointThe price level at which there is neither a profit nor a loss for a trade in forex trading. BuckSlang term for the U.S. Dollar. Also called greenback. Bull MarketA market in which prices are rising. Opposite of bear market. Bulls PowerA technical analysis indicator for generating selling signals. The Bulls (Read more>>) Bull TrapA technical analysis term describing the situation that the price movement (Read more>>) Bullish EngulfingBullish engulfing is a chart pattern in candlestick charting describing the (Read more>>) Buy Limit OrderAn order to buy a currency pair at or above a specific price, which is nor- (Read more>>) Buy StopAn order to buy when a currency pair's price rises to the stop price, which (Read more>>)
----- C ----- CableThe exchange rate between British pound and the US dollar (GBP/USD). (Read more>>) Candlestick ChartA charting method first developed by the Japanese that shows price move- (Read more>>) Carry TradeIn forex trading, carry trade is a strategy based on buying high-interest- (Read more>>) CCICommodity Channel Index. This technical analysis oscillator is typically (Read more>>) Central BankAn official entity in charge of the monetary policy of a country, a territory (Read more>>) ChannelIn forex charting, a channel is normally two parallel trendlines drawn along (Read more>>) Commitments of Traders Report (COT)A weekly report published by the Commodity Futures Trading Commission (Read more>>)
Commodity Channel Index (CCI)A technical analysis oscillator typically used to signal over-bought or over- (Read more>>) Commodity CurrenciesCommodity currencies refer to the Australian dollar (AUD, aud), the Cana- (Read more>>) CongestionA term in technical analysis describing the situation that prices move in a (Read more>>) ConsolidationA term in forex (FX) analysis describing the situation that prices move in a (Read more>>) Consumer Price Index (CPI)Consumer Price Index (CPI) is a key economic indicator for measuring the (Read more>>) ContractA unit of trading for a currency pair. Unlike futures, forward or option con- (Read more>>) CorrectionA temporary price movement that partially reverses the previous trend. (Read more>>) Corrective WaveThe wave that moves against the main price trend. The term comes from Elliott Wave Theory. COTCommitments of Traders Report. COT is a weekly report published by (Read more>>) Counter CurrencyThe currency listed after the base currency in a currency pair in forex (Read more>>) CPIConsumer Price Index.
Cross RateThe exchange rate between two currencies in the forex market of a third (Read more>>) CrossCross currency pair.
Cross Currency PairA pair of currencies excluding the US dollar. For example: EUR/GBP or AUD(Read more>>)
Cup and HandleA chart pattern of price movement in technical analysis, describing the situ-(Read more>>)
Currency Currency Pair
Currency SymbolsAUD, aud - Australian dollar (Read more>>)
Current AccountThe component of the balance of payments recording a nation's exports (Read more>>)
Currency RiskRisk resulting from changes in exchange rate.
----- D ----- Daily ChartA type of price chart on which each day is shown as a single data point. In (Read more>>) Dark Cloud CoverA chart pattern in candlestick charting describing the situation that the (Read more>>) Day TraderForex trader who opens and closes forex positions in the same trading day (Read more>>) Day TradingOpening and closing forex positions in the same trading day. See also (Read more>>) DeMarkerA technical analysis indicator for predicting price reversal. The Demarker (Read more>>) DepreciationThe decrease in the value of a currency relative to that of a foreign cur-,(Read more>>) Descending TriangleA chart pattern of price movement in technical analysis. It looks like a tri- (Read more>>) DevaluationAn official lowering of the value of a currency versus foreign currencies. Discretionary TradingTrading forex on the basis of human judgment rather than mechanically (Read more>>) DMIDirectional Movement Index. A trend following indicator developed by J. Welles (Read more>>) DojiA candlestick chart pattern describing the situation that the open price and the (Read more>>) Doji StarsA candlestick chart pattern that consists of a doji candle gapping away from the (Read more>>) Double BottomA chart pattern in technical analysis describing the situation that the prices (Read more>>) Double TopA chart pattern technical analysis the situation that the prices fall after ri- (Read more>>)
----- E ----- ECBEuropean Central Bank. It is the Central Bank for theEuropean Economic (Read more>>) Economic IndicatorA statistic of the economy in a country or a region. In forex trading, eco- (Read more>>) Elliott Wave TheoryA theory of price movement developed by Ralph Elliot. When applied to (Read more>>) Elliott Wave AnalysisAn approach of technical analysis using the theory of price movement de- (Read more>>) EMAExponential moving average. A moving average using a weighting factor (Read more>>) Empire State Manufacturing IndexAn indicator of economic conditions in the U.S. State of New York, pub- (Read more>>) EMUEuropean Economic and Monetary Union or European Monetary Union.
End of Day Order (EOD)An order to buy or sell at a specified price that is left open until the end of (Read more>>) Engulfing PatternA chart pattern in candlestick charting describing the situation that a candle (Read more>>) EnvelopesA technical analysis indicator that uses two moving averages to identify (Read more>>) European Economic and Monetary Union (EMU)An international organization of European countries with the goal to share (Read more>>) European Monetary UnionEuropean Economic and Monetary Union. EuroThe common currency for the countries of the European Economic and Mo- (Read more>>) European Central Bank (ECB)The Central Bank for the European Economic and Monetary Union. Evening Doji StarA three-candle chart pattern for bearish reversal in candlestick charting. (Read more>>) Evening StarA three-candle chart pattern for bearish reversal in candlestick charting. (Read more>>) Exchange RateThe value of one currency expressed in terms of another currency. It is (Read more>>)
Exponential Moving Average (EMA)A moving average using a weighting factor known as exponential smooth- (Read more>>)
----- F ----- FedFederal Reserve, the Central Bank of the United States of America. Federal Funds RateThe interest rate charged between depository institutions (mostly banks) (Read more>>) Fed Implied Volatility RatesFed Implied Volatility Rates refers to the implied volatility rates for foreign (Read more>>) Fibonacci RatioThe ratio between two successive numbers in the number series disco- (Read more>>) FlagA chart pattern of price consolidation in technical analysis. It looks like a (Read more>>) FlatBeing flat in forex trading means no order is placed or all earlier positions (Read more>>) Flat PositionA neutral state with all earlier positions in a currency pair closed out or off-(Read more>>) FOMCFederal Open Market Committee. It is the component within the Federal (Read more>>)
Foreign Exchange (Forex, FX)Exchange of one currency for another currency.
Foreign Exchange RateThe value of one currency expressed in terms of another currency. It is (Read more>>) ForexForeign exchange. Forex DemoRefer to practice forex trading, usually using the same trading platforms (Read more>>) Forex Trading PlatformsForex trading platforms are software programs provided by forex brokers (Read more>>) Forex Trading SystemsForex trading systems can either refer to the overall trading strategies and (Read more>>)
ForwardA currency forward or forex (FX) forward is a contract in the forex market (Read more>>) FractalsA technical analysis indicator developed by Bill Williams for detecting price (Read more>>) Fundamental AnalysisFundamental analysis in forex trading is typically performed through eva- (Read more>>) FundamentalsFundamentals in forex trading refer to the economic, political, and other (Read more>>) FuturesCurrency futures or a currency futures contract is an exchange-traded (Read more>>) FXForeign exchange.
----- G ----- G7Group of Seven, a group of seven industrialized nations including Canada, (Read more>>) Gann TheoryA theory of price movement developed by W. D. Gann. When applied to (Read more>>) GapA chart pattern of technical analysis in which the price range of a bar or (Read more>>) GDPGross Domestic Product. Going LongBuying a currency in forex trading.
Going ShortSelling a currency in forex trading.
Good 'Til Cancelled Order (GTC)An order to buy or sell that remains open until filled by the broker or can- (Read more>>) GreenbackSlang term for the U.S. Dollar. Also called buck.
Gross Domestic Product (GDP)The market values of goods and services produced within a country's bor- (Read more>>)
Group of Seven (G7)A group of seven industrialized nations including Canada, France, Germa- (Read more>>)
GTCGood 'Til Cancelled order. An order to buy or sell that remains open until (Read more>>)
----- H -----
HammerA one-candle chart pattern for bullish reversal during a downward trend (Read more>>) Hanging ManA one-candle chart pattern for bearish reversal during an uptrend in can- (Read more>>) HaramiA price chart pattern of candlestick describing the situation that the shorter (Read more>>) HedgingA trading strategy designed to minimize risk, usually through taking offset- (Read more>>) Head and ShouldersA chart pattern which is generally considered indicating price trend reversal(Read more>>) Head and Shoulders BottomThe upside-down chart formation of a head and shoulders top. Breaking of (Read more>>) Head and Shoulders TopA chart pattern which is generally considered indicating price trend reversal(Read more>>) ----- I ----- Ichimoku Kinko HyoA technical analysis indicator for detecting price trend, support and resis- (Read more>>)
Impulsive WaveThe wave that moves in the direction of the larger trend. The term comes (Read more>>)
Industrial ProductionIndustrial production measures the aggregated output value of production (Read more>>) InflationA general rise in prices of goods and services. Initial MarginThe initial deposit required from a trader by a broker as a 'good faith' gua- (Read more>>) Inside DayA candlestick or bar that has a higher low and lower high than the previous (Read more>>) Interbank RatesForex interbank rates refer to the exchange rates at the interbank system (Read more>>) InterventionAn attempt by a central bank or a government to influence the the exc- (Read more>>) Inverse Head and ShouldersThe upside-down chart formation of a head and shoulders top. Breaking of (Read more>>) Inverted HammerA one-candle chart pattern for bullish reversal during a downward trend in (Read more>>)
----- K ----- KiwiThe slang term for the New Zealand dollar (NZD, nzd).
----- L ----- Leading IndicatorsStatistics that are regarded as early signals of changes in economic growth (Read more>>) LeverageLeverage in forex trading is the ratio of the amount that a trader can buy (Read more>>) LIBORThe London Inter-Bank Offered Rate. It is a trimmed average of interbank (Read more>>) Limit OrderAn order to buy or sell a currency pair at a specific price, which is normally (Read more>>) Limit Buy OrderAn order to buy a currency pair at or above a specific price, which is nor- (Read more>>) Limit Sell OrderAn order to sell a currency pair at a specific price, which is normally above (Read more>>) LiquidationThe closing or offsetting of a position.
LiquidityLiquidity in forex refers to a forex market's ability of filling orders without (Read more>>) Long(1) Buying a currency pair in forex trading; (2) when a forex trader's long (Read more>>) Long PositionA long position in a currency pair means that the base currency of the pair is bought. LotA unit of trading. In forex trading lot sizes may vary between different (Read more>>) LoonieSlang for the Canadian dollar (CAD).
----- M ----- MAMoving average. A technical analysis indicator for identifying trend in the (Read more>>) MACDMoving Average Convergence Divergence. A popular technical analysis (Read more>>) MajorMajor currency pair. Major Currency PairA pair of currencies including the US dollar. For example: EUR/USD or (Read more>>) MarginThe amount of money or collateral deposited by a forex trader with his (Read more>>) Maintenance MarginMaintenance margin is an amount of money that must be maintained on (Read more>>) Margin CallA request from a forex broker to a forex trader to restore the margin de- (Read more>>) Market MakerA forex broker which quotes both bid and offer prices for each currency (Read more>>) Market OrderAn instruction given to a forex broker to buy or sell at whatever price that (Read more>>) Market RiskExposure to adverse price movement in market. Mark-to-MarketProcess of calculating the gain or loss in each open forex position with the (Read more>>) MomentumMomentum refers to the speed of price movement or rate of price change (Read more>>) Momentum IndicatorTechnical analysis indicator for assessing future market trends on the (Read more>>) Money ManagementMoney management in forex trading usually refers to following a set of (Read more>>) Morning Doji StarA three-candle chart pattern for bullish reversal in candlestick charting. A (Read more>>) Morning StarA three-candle chart pattern for bullish reversal in candlestick charting. An (Read more>>) Moving AverageA technical analysis indicator for identifying trend in forex market. It is the (Read more>>) Moving Average CrossoverWhen a shorter-term moving average and a longer-term moving average (Read more>>)
----- N ----- News TradingNews trading in forex is a strategy to take advantage of the sharp price (Read more>>) Net PositionThe difference between the open long positions and the open short posi- (Read more>>) NFPNon-farm payroll.
Non-Farm Payroll (NFP)A monthly statistic of the total number of paid U.S. employees in private (Read more>>)
----- O ----- OfferThe rate that a currency pair is offered for sale in a forex market. It is (Read more>>) Offer PriceThe rate a currency pair is offered for sale in a forex market. It is shown (Read more>>) Offsetting TransactionLiquidating a forex long position by selling an equal amount of the same (Read more>>) One Cancels the Other Order (OCO)A pair of orders whereby filling one order will automatically canceling the other order. Open Market OperationsActivities undertaken by a central bank in the markets in order to bring (Read more>>) Open PositionA forex order that has been executed but not been closed. OscillatorTechnical indicator for identifying overbought or oversold conditions of (Read more>>) Outside DayA candlestick or bar that has a higher high and lower low than the pre- (Read more>>) OverboughtA technical opinion that the market price of a currency price has risen too (Read more>>) Overnight TradeA forex transaction which is not liquidated during the same trading day on (Read more>>) OversoldA technical opinion that the market price of a currency price has fallen too (Read more>>) Overnight PositionA forex transaction which remains open until the next trading day.
OrderAn instruction by a forex trader to a forex broker to fill a trade at a designated price.
---- P -----
Parabolic SARA technical analysis indicator for identifying price trend and exit points. A (Read more>>)
PennantA chart pattern of price consolidation in technical analysis. It looks like a (Read more>>)
Piercing Line
PipsPip is the smallest price unit of a currency in forex (fx) trading, for ex- (Read more>>)
Pivot LevelsHigh-probability price levels derived and assumed from technical analysis. (Read more>>)
PMIPurchasing Managers' Index.
Point and Figure ChartA charting method which uses prices to form patterns of movement while (Read more>>)
Political RiskRisk of loss due to non-market factors such as shifts of a government's (Read more>>)
Ponzi SchemePonzi scheme refers to pyramid arrangements whereby a person or an (Read more>>)
PositionPosition in forex trading usually refers to the amount of a currency held by (Read more>>)
Position TraderA forex trader who opens a forex position and holds it for an extended per (Read more>>)
Position TradingOpening a forex position and holding it for an extended period of time, as (Read more>>)
PPIProducer Price Index.
Producer Price Index (PPI)The Producer Price Index (PPI) is an economic indicator for measuring the (Read more>>)
Purchasing Managers' Index (PMI)Purchasing Managers' Index (PMI) is an economic indicator for measuring (Read more>>)
PyramidingUsing profits on existing positions as margin to trade forex in larger sizes.
---- Q -----
Quote
Quote Currency
Quoted CurrencyThe currency listed after the base currency in a currency pair in forex tra (Read more>>)
---- R ----- RallyAn upward price movement. RangeThe difference between the highest and the lowest prices of a currency (Read more>>) Range TradingA trading strategy that sells at the upper boundary or buy at the lower (Read more>>) RateExchange rate in forex trading; the price of one currency relative to another currency. ReactionA decline in the price of a currency pair after a rise in forex trading. ResistanceResistance is a term in technical analysis referring to a price level where (Read more>>) Retail TraderRetail trader in future trading refers to an individual trader with total as- (Read more>>) RetracementA reversal within a major price trend of a currency pair in forex trading. RevaluationAn increase in the exchange rate of a currency as a result of central bank (Read more>>) ReversalReversal refers to a change of direction in the price movement of a (Read more>>) Reverse Head and ShouldersThe upside-down chart formation of a head and shoulders top. Breaking (Read more>>) Risk ControlRisk control in forex trading refers to applying trading rules to minimize trading losses. Risk ManagementRisk management in forex trading refers to identifying exposure to various (Read more>>) Risk/Reward RatioRisk/reward Ratio in forex trading refers to the rate between the probabi- (Read more>>) RolloverA forex trading procedure involving the shift of the settlement of a forex (Read more>>) RSIRelative Strength Index. A technical analysis oscillator that measures the (Read more>>) Risk AppetiteAcceptable level of financial risk for traders or investors in forex trading. (Read more>>)
---- S ----- ScalperA forex trader who buys and sells rapidly, with the goal to gain a small (Read more>>) ScalpingBuying and selling rapidly, with the goal to gain a small profit at each trade (Read more>>)
Secondary CurrencyThe currency listed after the base currency in a currency pair in forex tra (Read more>>) Sell Limit OrderAn order to sell a currency pair at a specific price, which is normally above (Read more>>) Shooting StarA candlestick chart pattern that consists of a candle with a short body and (Read more>>) Short(1) Selling a currency pair in forex trading; (2) when a forex trader's short (Read more>>) Short PositionA short position in a currency pair means that the base currency of the (Read more>>) Simple Moving Average (SMA)The equally-weighted mean price of a currency pair over a given period of (Read more>>) SlippageSlippage in forex trading refers to the situation when an order is filled at a (Read more>>) SpeculatorA forex trader who trades with the goal of gaining profits through the suc- (Read more>>) Spinning TopA one-candle chart pattern in candlestick charting. A spinning top is a can (Read more>>) Spot MarketSpot market in forex trading refers to the market where currency pairs (Read more>>) Spot PriceSpot price in forex trading refers to the current market price. Settlement (Read more>>) Spot RateThe current market price. Settlement of spot forex transactions usually oc (Read more>>) SpreadThe difference between the bid price and the ask price of a currency pair (Read more>>) SquareSee square position. It is also called flat. Square PositionIn forex trading square position means a neutral state with all earlier posi- (Read more>>) StarsA candlestick chart pattern that consists of a candle with a short body gap- (Read more>>) StochasticA technical analysis oscillator for identifying overbought or oversold condi- (Read more>>) Stop Limit OrderA stop limit order is a type of order that will be filled at the specified price or better. Stop Loss OrderA stop order in forex trading is an order to buy or sell a currency pair at (Read more>>) SterlingSlang term for the British pound. It can also refer to the exchange rate (Read more>>) StockySlang term for Swedish Kronain in forex. SupportSupport is a term in technical analysis referring to a price level where new (Read more>>) Support LevelsA technique used in technical analysis that indicates a specific price ceiling (Read more>>) SwapSwap in general means exchanging one asset or liability for a similar asset (Read more>>) Swing TradingSwing trading in forex is a trading strategy that on identifying trading op- (Read more>>) SwissyMarket slang for Swiss franc.
---- T ----- Technical AnalysisAn approach to forecast price movements through analyzing historical (Read more>>) Technical CorrectionAn adjustment to price based on technical factors such as volume and (Read more>>) TickTick in forex trading means a minimum change in price, up or down. An (Read more>>) Timing IndicatorA technical analysis tool that helps determine times when a selected mar- (Read more>>)
Tomorrow Next (Tom next)When a forex trader simultaneously buys and sells a currency for delivery the next day. Transaction The entry or close of a forex trade.
Transaction DateThe date on which a forex buy or sell order is processed. TrendThe general direction, either upward or downward, of price movement in forex market. TrendlineA line drawn in charting along the price lows (support) or highs (resis-) (Read more>>) Trend TradingTrend trading is a trading strategy that focuses on identifying and following (Read more>>) TriangleA chart pattern of price movement in technical analysis. It looks like a tri- (Read more>>) Triple BottomA chart pattern in technical analysis describing the situation that the prices (Read more>>) Triple TopA chart pattern in technical analysis describing the situation that the prices (Read more>>) Tweezers Bottoms and TopsA candlestick chart pattern that consists of two candles with almost the (Read more>>) Two-Way PriceWhen both buying and selling rates are quoted for forex transactions by a forex broker.
---- U ----- Under-ValuationA currency is is normally considered undervalued when its exchange rate (Read more>>) UptickA new price quote for a currency pair that is higher than its preceding quote. US Dollar Index (DX, ICE[NYBOT])A measure of the value of the U.S. dollar relative to a basket of foreign (Read more>>) US Dollar Index (NYBOT)A measure of the value of the U.S. dollar relative to a basket of foreign (Read more>>) US Dollar Index (USDX)A measure of the value of the U.S. dollar relative to a basket of foreign (Read more>>) US Prime RateOne of several base interest rates used by US banks to price short-term (Read more>>) ---- V ----- Value DateValue date refers to the date that the value of an asset is ascertained in (Read more>>) VIXVIX refers to the Chicago Board Options Exchange (COBE) Volatility Index (Read more>>) VolatilityA statistical measurement of the rate of price change in the market.
---- W -----
Weighted Moving Average (WMA)The mean of prices over a given period with greater weight given to the (Read more>>) Williams' Percent RangeA technical analysis indicator for detecting overbought or oversold condi- (Read more>>) WMAWeighted moving average. The mean of prices over a given period with (Read more>>) Working DayWorking day in forex trading refers to a day when the banks in a cur- (Read more>>)
YardSlang for a billion.
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