Trading Glossary

Trading Glossary
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TermDefinition
Account (FP Account, or Account Number)Account with FP Markets established under the Account Terms, including all Trading Accounts and all Transactions recorded in them.
Account BalanceThe account balance reflects the amount of money on your account excluding the profit/losses from your current open positions.
Account EquityThe equity reflects your balance + your floating profit /loss of your open positions.
Adjustable PegExchange rate regimen where a currency’s conversion rate is ‘pegged’ (fixed) in relation to a stronger currency (such as the US dollar or Euro). The pegged rate is adjusted occasionally in an attempt to improve the country’s competitive position.
ADIAbbreviation for Average Directional Index. It is a technical indicator that is used to gauge the strength or weakness of a trend in the financial markets.
AgioAgio is a description of a bond premium – for example, when a bond’s market value is greater than its par value; also sometimes refer to the fee charged to exchange money from one currency to another.
Aggregate RiskWhen a bank or financial body is exposed to forex contracts from a single customer for in spot and forward foreign exchange contracts.
AltcoinAltcoins are the alternative cryptocurrencies launched after the success of Bitcoin. Generally, they project themselves as better substitutes to Bitcoin. At the time, cryptocurrencies other than bitcoin were referred to as altcoins (or alternative coins). The term has stuck among cryptocurrency traders and is still used to refer to lower cap cryptocurrencies.
Anonymous TradingBids and offers that are present on the financial markets without disclosing the identity of the market participants. Many stock exchanges, such as the London Stock Exchange, Toronto Stock Exchange, and NASDAQ, as well as dark pools offer anonymous trading.
AppreciationAppreciation, in general terms, is an increase in the value of an asset over time.The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates. A currency is said to ‘appreciate’ when it strengthens in price in response to market demand.
ArbitrageThe simultaneous buying and selling of a financial instrument in different markets to take advantage of different pricing.
AssetThe underlying instrument essential for determining a contract. An item/resource of value. It can be a precious metal, stock, currency pair, or bond.
Asset AllocationA strategy that refers to portfolio diversification over various asset classes with the intention of maximizing returns and also minimizing risks.
At BestAn instruction given to a dealer to buy or sell at the most desirable price available, and as quickly as possible.
At or BetterAn order to deal at a specific rate or better. They are an example of a limit order, which sets a specific price to be met for a trade to be made.
At the MoneyIs a term used to describe an options contract with a strike price that is identical to the underlying market price. Both call and put options can be simultaneously ATM.
Attorney in chargeAn individual who is authorized to trade in the financial markets on behalf of a trader.
Ask RateAlso referred to as offer. The rate at which a financial instrument is offered for sale (as in bid/ask spread).
Aussie“Australian Dollar. “
Authorized Forex DealerA financial entity that has received authorization from a relevant regulatory body to act as a dealer involved with the trading of foreign currencies. Dealing with authorized forex dealers ensures that your transactions are being executed in a legal and just way.
AUD/USDThe abbreviation for the Australian dollar and U.S. dollar (AUD/USD) currency pair or cross.
Automated Forex TradingAutomated forex trading is a system of trading foreign currencies with a computer program based on a set of analyses that help determine whether to buy or sell a currency pair at a given time.
Away from the MarketIs an expression that is used in two different scenarios when a buy or sell price deviates from a specific related benchmark. A situation in which the bid on a limit order is lower than the present market price or the offer price is more than the present market price for a financial instrument.
AskThe lowest seller in the market at that time. Also known as offer.
BidThe highest buyer in the market at the time
Back OfficeThe departments and processes related to the settlement of financial transactions (process and report transactions).
Balance-of-PaymentsSystem of recording a country’s economic transactions. A statement of all transactions made between entities in one country and the rest of the world over a defined period of time, such as a quarter or a year.
Balance of TradeThe difference in value between a country’s exports and imports.
BandIn countries where the currency is pegged, the range in which the rates are permitted to fluctuate.In finance, a trading band is a range of prices for a commodity or currency.
Bank NotesPaper issued by a Central Bank, redeemable as money and considered to be legal tender. A banknote is payable to the bearer on demand, and the amount payable is apparent on the face of the note.
Bank RateThe rate at which a central bank is prepared to lend money to its domestic banking system, often in the form of very short-term loans.
Banking DayDays of the week when commercial banks are open for business in the country of the particular currency traded. Usually banking day is all day except Saturday, Sunday and legally defined holidays.
Bar ChartA common type of charting method which consists of four significant points; Each bar typically shows the open, high, low, and close (OHLC) prices for that period. This may be adjusted to only show the high, low, and close (HLC). Technical analysts use bar charts—or other chart types like candlesticks or line charts—to monitor the price performance of assets which aids in making trading decisions.
Base CurrencyThe currency in which your trading account is based.
Basis PointOne hundredth of one percentage point, or 0.0001.
Basket of USD ShortA number of operations where the USD is being sold against various currencies, instead of against a single currency.
Bear (Bearish)A view taken by a trader going ‘short’ in the expectation of a decrease in the price of a currency. Being bearish is the belief that the price of an asset will fall.
Bear MarketA market in which share prices are falling, encouraging selling.
Bid/Ask Spread“Represents the difference between the buy (bid) and sell (ask) price of a foreign exchange pair. The BID represents the price at which the forex broker is willing to buy the base currency in exchange for the counter currency. Conversely, the ASK price is the price at which the forex broker is willing to sell the base currency in exchange for the counter currency. “
Big Figure“Big figure’ is the stem, or whole dollar price, of a price quote. The term “”big figure”” is most often used in international currency markets, where it is often abbreviated to “”big fig.”” If AUD/USD is 1.04553, the big figure is 4. If GBP/USD is 1.58852, the big figure is 8.”
Blue ChipShares of large and well-established organizations.Typically, the term ‘blue chips’ is used to refer to the constituents of the major stock indices. The term derives from the high value of blue casino chips.
BlockA block refers to a collection of data related to transactions that are bundled together with a predetermined size and are processed for transaction verification which eventually becomes part of a blockchain. There is no official size designation constituting a block of securities, but a commonly used threshold is more than 10,000 equity shares or a total market value of more than $200,000.
BlockchainA blockchain is decentralized, digital ledger where transactions made in bitcoin or other cryptocurrencies are recorded chronologically and publicly. They are the underlying technology of all cryptocurrencies and allow users to transact with each other without the need for trusted third parties (like banks, PayPal, Western Union etc).
Bollinger BandsBollinger bands are a popular form of technical price indicator. The bands were designed to gauge whether the prices are high or low on relative basis. They are plotted two standard deviations above and below a simple moving average. The bands look like an expanding and contracting envelope model.
BookThe total number of currency positions a dealer has at any given moment. Typically, the dealer aims to have a net position of zero in terms of risk.The book shows the total amount of long and short positions that the trader has undertaken.
Breakaway GapA price gap which occurs in the beginning of a new trend, many times at the end of a long consolidation period. A gap is the difference between the open price and prior close price, where no trading activity takes place. The price breaks away from the support or resistance via a gap, as opposed to an intraday breakout.
Break EvenA term used to describe when there is no overall profit or loss experienced in a transaction. In terms of price action, it is the level at which the risk on the trade is recovered.
Breton Woods AgreementThe Bretton Woods Agreement, negotiated in July 1944, established a new international monetary system. It was developed by delegates from 44 countries at the United Nations Monetary and Financial Conference held that month in Bretton Woods, N.H. Under the agreement, other currencies were pegged to the value of the U.S. dollar, which, in turn, was pegged to the price of gold. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rate for the major currencies.
Broken DatesBroken date is a term used to describe a nonstandard maturity date for any type of financial deliverable. Broken dates can occur with options, futures, bonds and other trading instruments. Terms also used are odd dates,cock dates and broken period.
Broker“An agent, who executes orders to buy and sell currencies and related instruments either for a commission or on a spread and works as an intermediary between the traders and the liquidity providers. It facilitates in the execution of clients’ orders. “
British PoundThe currency of the United Kingdom. The full, official name is pound sterling.
Bull (Bullish)A view taken by a trader going ‘long’ in the expectation of an increase in the price of a currency. Being bullish is the belief that the price of an asset will appreciate.
Bull MarketA market characterized by rising prices.
BundesbankThe Central Bank of Germany.
Business DayA business day is a popular unit of time measure that typically refers to any day in which normal business operations are conducted.
Buy Limit OrderAn order to execute a transaction at a specified price (the limit) or lower. By using a buy limit order, the investor is guaranteed to pay that price or less.
Buy on MarginBuying on margin is the purchase of an asset by using leverage and borrowing the balance from a bank or broker. The word margin refers to the portion the investor puts up rather than the portion that is borrowed.
Buying/ Selling Foreign Exchange“Buy Dollar/Yen” means buy the dollar/sell the Yen. Traders buy when they expect a currency’s value to rise and sell when they expect a currency to fall.
CandlesticksA type of price chart used to display the high, low, open, and closing prices of an instrument for a specific period.
Commission (Comms, or Transaction Fees)Amount payable by you to the service provider in respect of each Transaction.
Cable/SterlingCable is a slang term for the exchange rate between the U.S. dollar (USD) and the British pound sterling (GBP).
Call OptionAlso known as a “High option.” Call options are agreements that give the option buyer the right, but not the obligation, to buy a stock, bond, commodity or other instrument at a specified price within a specific time period.
Candlestick ChartA candlestick is a type of price chart used that displays the high, low, open, and closing prices of a security for a specific period. The body (jittai) of the candlestick bar is formed by the opening and closing prices. To indicate that the opening was lower than the closing, the body of the bar is left blank. If the currency closes below its opening, the body is filled. The rest of the range is marked by two “shadows”: the upper shadow (uwakage) and lower shadow (shitakage).
Carry GridA carry grid is a foreign exchange trading strategy that attempts to profit from a grid of carry trade currency positions. (including open orders, take profits, and stop losses)
Carry Trade“A carry trade is a trading strategy that involves borrowing at a low interest rate and investing in an asset that provides a higher rate of return. In the Foreign exchange, interest is debited or credit from a trader’s account everyday on open positions. The most popular Carry Trade in recent history has been to sell Japanese Yen and buy higher yielding currencies such as the Australian Dollar, New Zealand Dollar, and British Pound. “
Cash on DepositThe amount of cash deposited in a trading account.
Cash MarketA market where currencies are immediately bought and sold for their current value.
CCIAbbreviation for Commodity Channel Index. It is a technical oscillating indicator used for measuring when a financial instrument has been overbought or oversold.It is also used to assess price trend direction and strength.
Central BankA central bank is a financial institution given privileged control over the production and distribution of money and credit for a nation or a group of nations. It implements the Government’s monetary policy, as well, by changing interest rates.
ChartistOne who uses charts and graphs to trade. Referred to as a technical trader.
Closed PositionA position that has been terminated or ended, securing either a profit or a loss.
Closing Market RateThe rate at which a position is closed based on the market price at end of the day.
Cleared FundsCleared funds are the balance in an account that is able to be withdrawn or used in financial transactions.
CommissionA fee charged by a broker for dealing on the client’s behalf.
Consumer Price IndexAn index that measures the change in price of a representative basket of goods and services such as food, energy, housing, clothing, transportation, medical care, entertainment and education.It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.
CorrelationCorrelation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. In Forex for example, one could argue that the Euro and the Sterling have a higher correlation than, for example, the Euro and the Brazilian Real.
CounterpartyThe customer or bank with which a foreign exchange deal is executed. More specifically, every buyer of an asset must be paired up with a seller who is willing to sell and vice versa. For example, the counterparty to an option buyer would be an option writer.
CoverTo take out a forward foreign exchange contract or to close out a short position by buying currency or securities which have been sold.Cover can also be used without context to simply mean the act of protecting overall portfolio value, as in providing cover against market volatility.
Cross Currency RateAny currency pair that does not involve the US dollar (USD). e.g., GBP/AUD.
Currency Pairfinancial instrument, that is traded on the foreign exchange market. Currency pair is formed by two currencies, which are written as a ratio of one to another. For exmaple, USDCAD is an example of a currency pair in which the U.S. dollar (USD) is the base currency, and the Canadian dollar (CAD) is the counter currency.
Currency RiskThe risk that occurs from fluctuations in foreign exchange rates that may undermine the dollar or any other foreign currency value of overseas investments.
Currency SymbolsA currency symbol is a graphical representation substituted for the name of a currency. e.g, GBP – British Pound AUD – Australian Dollar CAD – Canadian Dollar EUR – Euro JPY – Japanese Yen
CommoditiesA general name that refers to basic goods that are either grown or mined. e.g, coffee, precious metals, and oil.
ContractAn agreement between 2 or more parties. (disclaimer: this is not legal advice)
Contract for Difference (CFD)An agreement between buyer and seller to exchange the difference in value of a particular instrument between when the contract is opened and when it is closed.
Contract SizeNumber of units for a security in 1 standard contract. An indication of the standard transaction sizes for the FPM OTC contracts is available on the website at www.fpmarkets.com.au.
Currency PairsPair of currency that are compared when trading Forex – e.g. a contract of Australian Dollars vs US Dollar would be expressed as AUDUSD
DerivativeA security with a price that is dependent upon or derived from one or more underlying assets.
DMA (Direct Market Access)Model of pricing and execution where an order is placed directly, or virtually directly, into an Exchange without any broker intervention. In practice, there are many variations to the general model and brokers always retain the right to filter orders for regulatory or compliance reasons.
Day TradeOpening and closing a position on the same day.
Day TraderA person (trader) who opens and closes trades within the same trading day.
Deal BlotterA list of all the deals occurred in a specific period, usually a trading day.
Deal TicketThe primary method of recording all the terms, conditions, and basic information of a transaction.
DealerDealers are people or firms who trade for their own account and risk, whether through a broker or otherwise.
Dealing DeskIn foreign currency markets, a dealing desk is where the forex dealers facilitate pricing and executing trades.
DeficitA state in which liabilities exceeds the value of assets. A deficit is synonymous with shortfall or loss
Delivery DateThis is the date of maturity of a contract when the exchange of currencies is made. This date is also known as the value date.
DepreciationA decline in the value of a currency in terms of a foreign currency due to market demand .
DevaluationAn intentional decrease in a currency’s price relative to another currency, group of currencies, or currency standard.
Demo AccountA trading account that enables a potential trader to review and get to know the features of a specific trading platform using virtual money before engaging in actual trading.
Depth of MarketThe volume of buy and sell orders waiting to be transacted for a particular currency pair at a particular point in time.The depth of market measure provides an indication of the liquidity and depth for that particular security or currency.
DividendA portion of a company’s profits paid to a class of its shareholder. Dividends are decided and managed by the company’s board of directors
DAXDeutsche Aktien Xchange, Germany’s primary stock index that represents 30 of the largest and most liquid German companies.
DrawdownThe gap between the peak and trough decline of a specific recorded period of an investment
ECN (Electronic Communication Network)Model of execution where an order is placed at a price sourced from a number of liquidity counterparties. In practice, there are many variations to the general model and brokers always retain the right to filter orders for regulatory or compliance reasons.
Earnings per Share (EPS)It is a financial measure, which indicates the profitability of a company, it is calculated as a company’s profit divided by the outstanding shares of its common stock.
EasingRefers to a decline in interest rates due to central bank activity.
Economic IndicatorA statistic or data point that is used to measure current economic conditions.
ECN BrokerA forex financial institution that uses electronic communication networks (ECNs) to enable clients to trade from prices obtained from a number of sources.
End Of Day Order (EOD)“A buy or sell order for securities requested by an investor. This order remains open until the end of the trading day which is typically 5PM ET. “
EUROThe official currency of the European Union, adopted by 19 of the 28 member states of the European Union.
European Central Bank (ECB)Established in Frankfurt in 1998, the ECB is the central bank responsible for monetary policy of those European Union (EU) member countries ECB’s main responsibility is to ensure the EURO price stability.
Exchange RateThis is the expression used to describe the value of one currency versus another. For example, how many U.S. dollars does it take to buy one euro?.
Expiry DateThe date on which the holder of an option can exercise his right to buy or sell the underlying security. is usually 2 business days before the settlement date.
Exotic CurrenciesRefers to foreign currencies that are not popularly traded and are relatively illiquid.
Expert AdvisorA software that enables the analytical and trading processes in the trading platform to be carried out with little or no manual control. Expert advisors are most often deployed on the MetaTrader 4 or 5 forex trading platforms.
Entry / OpeningTo execute an order in the market. The price is known as the entry or opening price.
Exit/ClosingTo create an order that is the opposite of a position that is currently held
Exposure / Market ExposureAmount in dollar, or percentage of capital that is being invested in a particular type of security, marketsector or industry.
FeesCost associated to products and services of the broker, but not the trade.
Federal ReserveAlso commonly referred to as Fed. It is the central bank of the U.S. and the organization responsible for monitoring and maintaining the United States currency supply. It oversees the monetary and financial system in the U.S.
Fiat CurrencyFiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. In a fiat currency system, the currency value rises and falls on the market in response to demand and supply pressures.
FillThe process of executing an order to make a transaction.
Financial InstrumentFinancial instruments are assets that can be traded. Examples include currencies, futures, options, and CFDs.
First In First Out (FIFO)First In, First Out, commonly known as FIFO, is an asset-management and valuation method in which assets produced or acquired first are sold, used, or disposed of first. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.
Foreign Exchange MarketA Market where foreign currencies are traded internationally. Participants are able to buy, sell, exchange and speculate on currencies. Foreign exchange markets are made up of banks, forex dealers, commercial companies, central banks, investment management firms, hedge funds, retail forex dealers and investors.
ForexThe short form of foreign exchange.
Forward PointsThe value of the interest rate differential for a currency pair over the period from the spot settlement date to the forward settlement date, When points are added to the spot rate this is called a forward premium; when points are subtracted from the spot rate it is a forward discount.
FuturesFutures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price. The difference between a Forward and a Future is that forwards are traded over the counter (OTC) while Futures are typically traded over an exchange.
FundamentalsFundamentals include the basic qualitative and quantitative information that contributes to the financial or economic well-being and the subsequent financial valuation of a company such as inflation, interest rates, commodity prices and economic activity.
Fundamental AnalysisFundamental analysis (FA) is a method of measuring a security’s intrinsic value by examining related economic and financial factors, and other qualitative and quantitative aspects that affect the performance of a particular financial instrument.
FinanceFinancing is applicable on all CFD positions held overnight. The financial rate is applied to the full value of your position. If you hold a long ‘buy’ position you will be charged a financial interest, if you hold a short ‘sell’ position you may receive interest.
Free EquityFree equity refers to your available funds that can be used to place new positions in your account
FuturesContract between two parties to buy or sell a specified asset of standardized quantity and quality for a price agreed today.
Going LongGoing long refers to opening a buy CFD position to profit from a price increase..
G7“Is the seven leading industrial countries: The United States, Germany, Japan, France, United Kingdom, Canada, and Italy. “
GTCAbbreviation for Good Till Cancelled. It is an order to purchase or sell a particular financial instrument at a set price but this order is only valid and remains active until either the order is filled or the investor cancels it.
Gold CertificateA gold certificate is a paper document that represents a claim on a specified amount or value of gold that investors use to purchase and sell the commodity instead of dealing with transfer and storage of the physical gold itself.
Golden CrossThe golden cross is a candlestick pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average. This is considered a favourable sign that the underlying currency will move in the same direction.
Goldilocks EconomyTo steal a line from the popular children’s story Goldilocks and the Three Bears. A term that describes an economy that has steady growth and acceptable inflation. In this sense, the economy is not too hot and not too cold.
Grid TradingGrid trading is when orders are placed above and below a set price, it is most commonly associated with the foreign exchange market.
GDPAbbreviation for Gross Domestic Product. Is the total value of a country’s output, income or expenditure produced domestically.
GNPAbbreviation for Gross National Product, It is Gross domestic product added to income from investment.
Going ShortGoing short refers to opening a sell CFD position to profit from a price decrease.
Gross Liquidation Value (GLV)Your GLV is the total value of your account if you closed out all positions at the current market price minus any transaction charges or adjustments. If your GLV goes below 0, you will be in debt.
HedgeAn investment to reduce the risk of adverse price movement in another investment or an asset, normally consisting of taking an offsetting position in a related security
Hard CurrencyHard currency refers to currencies that are issued by nations that are seen as politically and economically stable. Examples could be the US Dollar or the Euro.
Head and ShouldersThe Head and Shoulders chart pattern is considered by many traders and analysts to be one of the most reliable and accurate of all reversal patterns. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal.
Hit the Bid“Hit the bid is a buzzword used to describe an event where a trader accepts purchasing at the offer or selling at the bid. “
HolderThe buyer/holder of a currency pair.
IndiciesAn aggregate statistical measure of a particular market. E.g., the ASX S&P200 seeks to measure the value of the top 200 stocks on the ASX.
IFEMAInternational Foreign Exchange Master Agreement
Inconvertible CurrencyA Foreign Currency which cannot be exchanged for other currencies.
Inflationis a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. This is sometimes referred to as an excessive movement in such price levels.
Initial MarginInitial margin is the percentage of the purchase price of a security that must be covered by cash or collateral when using a margin account.
Inter-bank RatesThe foreign exchange rates that large international banks quote to other large international banks. The basis of the Interbank market.
Inter-dealer BrokerA specialist broker who acts as an intermediary between market-makers who wish to buy or sell securities to improve their book positions, without revealing their identities to other market-makers.
Interest RateThe interest rate is the amount a lender charges for the use of assets expressed as a percentage of the principal. An interest rate is expressed as an annual percentage of the principal. Interest rates often change as a result of inflation and Central Bank policies.
Interest Rate DifferentialThe difference between the interest rates applicable to a currency pair. Traders in the foreign exchange market use IRDs when pricing forward exchange rates.
Introducing Brokeris a broker in the futures markets who has a direct relationship with a client and introduces customers to a market maker often in return for commission or a portion of the spread.
In the MoneyA phrase used to show when a trader makes profit.
IndexAn Index is a measurement of the value of a section of the stock market. Some of the most popular indices are the S&P 500, NASDAQ and the FTSE 100.
Initial MarginEvery trader in the ASX CFD market is required to put up an Initial Margin (deposit) for each contract they trade. This applies to both buyers and sellers. This Initial Margin is returned when the contract is closed out. The amount is normally set at a level designed to cover reasonably foreseeable losses on a position between the close of business on one day and the next. The amount of Initial Margin for each contract varies according to the price volatility.
InstrumentA tradeable asset or negotiable item – such as security, commodity, derivative, index or any item that underlies a derivative.
IressTrading platform used primarily to trade equity CFDs.
Japanese YenThe Yen is the Japanese currency unit. It comes third in place after United States dollar and the Euro as the most-traded currencies in the foreign exchange market .
JobberA trader who trades short-term profits during the course of a trading session, rarely leaving a position overnight.
Key CurrencyIt’s a stable currency, one that doesn’t fluctuate too wildly and provides the foundation for exchange rates for international transactions. Because of their global use, key currencies tend to set the value of other currencies.
KillAn order that is to be cancelled between its placement and its fulfillment.
Kiwi“Traders term for the New Zealand Dollar because of the national bird found stamped on the one-dollar coin. “
LeverageWhen trading with borrowed capital, you are trading with leverage
Lagging IndicatorsStatistics that change after the economy has already started to change or has started to follow a particular direction or trend. They can be useful for gauging the trend of the general economy, as tools in business operations and strategy, or as signals to buy or sell assets in financial markets.
Leading IndicatorsLeading indicators are used by traders to predict imminent changes in a market, such as the levels of the S&P 500 index.
LeverageThe ratio of amount used in a transaction to the required deposit. With a deposit of $1000 and a leverage of 100, a trader could enter a position with a face value of $100,000.
LiabilityA debt or another type of obligation. In speculative forex trading, currency is not delivered. All profits and losses are added to or subtracted from margin deposits.
LIBORThe London Inter-Bank Offered Rate, it is used as a reference rate by banks to borrow from other banks.
Limit OrderAn order to transact at a specified price or better. Can be used to control how much profit and how much loss a trader is willing to handle.
“Line Chart “The simplest form of charting, a line chart plots a series of lines connecting the various price levels over a specified time period.
Long Positionalso known as ‘long’ is a position that becomes beneficial as market price rises. Holding a long position is a bullish view.
LoonieDealer slang for the USA/CAD currency pair.
LiquidationA liquidation is forced closure of positions due to the equity in your account not being able to support the margin requirements of the open positions – A position can also be Auto liquidated, your GLV is 50% of your margin requirement
LiquidityDegree to which an asset or security can be bought or sold within the market without affecting the asset’s price.
LotsA lot is the term used to describe the amount for a standard contract. For example, 1 lot of gold refers to 100 troy ounce of gold. 1 lot of AUDUSD refers to $100,000 AUD worth of US Dollar
Margin CallWhen your free equity drops below 0. Your position can be liquidated at any point when you are in margin call.
Market OrderAn order to buy or sell a financial instrument at the best available price in the current market.
Market PriceThe current price at which a financial instrument is being traded in the market.
Market RiskThe possibility that a trader will incur losses due to changes in market prices.
MarginMargin is the money borrowed from a brokerage firm to purchase an investment. the required initial deposit of collateral to enter into a position or foreign exchange trade.
Margin AccountIt’s a brokerage account in which the broker lends the customer funds to engage in securities transactions.
Maturity DateIs the date on which, under the contracted agreements, the foreign exchange becomes due.
Maximum LeverageMaximum leverage is the largest allowable size of a trading position permitted through a leveraged account. At a leverage of 50, one could enter a maximum leveraged position of $100,000 by depositing $2,000 worth of margin.
MioOne million or 1,000,000.
Mine and YoursUsed by floor traders to signify buying and selling. For purchasing something, they say “Mine”. If they want to sell, they say “Yours”.
Monetary PolicyIs the process by which a monetary authority controls the money supply in the economy, usually this authority is the Central Bank.
Moving AverageThe average of prices over a given time. It may be used as a curving trend line that follows the price action.
Mark-to-MarketA system whereby the value of an open position is revalued against the current market for the purpose of calculating variation margins.
Market MakerWhere the ASX CFD provider acts as principal, providing a two-way spread based which may not be the same as the market price. Market makers are price markers and make money when clients lose money.
MT4/Metatrader 4Trading platform used primarily to trade FX.
NASDAQIs a global electronic marketplace for buying and selling securities in the U.S.
Net PositionThe amount of currency bought or sold that have not been offset with opposite positions.
News TraderAn investor who bases his/her decisions on the outcome of news announcements, Breaking news, economic reports etc., and its impact on the market.
NOKInterbank Rate Resistance Currency symbol for the Norwegian Krone.
NYSEThe New York Stock Exchange.
NZDthe currency symbol for the New Zealand Dollar.
OTC (Over the Counter) contractContract for a financial product, including options and contracts in respect of foreign exchange or metals. OTC contracts are not traded or settled with any Exchange.
Odd LotA non-standard transaction size. Odd lots are considered to be anything less than the standard 100 shares for stocks.
OfferThe price at which a dealer is willing to sell. The lowest price available is the best offer .
Offsetting transactionA trade with which serves to eliminate or cancel some or all of the market risk of an open position, it can mean closing a transaction or taking another position in the opposite direction to cancel the effects of the first.
One Cancels Other Order (O.C.O. Order)A designation for two orders whereby if one order executes, the other order is automatically canceled.
Open orderAn order that is running in the market until a specified market price is reached, then it will be executed.
Open PositionAn active trade that has not been closed yet.
OrderAn investor’s instructions to a brokerage firm to either buy or sell a security on the investor’s behalf.
Overnight PositionA trading position that remains open overnight and until the next trading day.
P&LProfit and Loss
Pip / PointsThe smallest increment by which a unit of currency (such as for an FX FPM OTC contract) changes and is quoted depending on the number of decimal places in which the currency is quoted. For example a USDJPY margin FX is quoted with only two decimal places (meaning one Pip Value (or “Point”) = JPY 0.01).
PayoutRefers to the expected financial return from a successful trade.
PeggedControlling a currency’s value by tying it with the rate of another currency.
PipA pip is the smallest price movement in a currency pair exchange rate.
PositionThe netted total exposure in a given currency. A position can be either flat or square ( no exposure), long, (more currency bought than sold), or short ( more currency sold than bought).
PremiumAmount by which a currency’s forward price has exceeded the current market price.
Principal ValueThe original amount that an individual invests for trading in the financial markets.
Private KeyThe private key is the encrypted series of letters and numbers used to access the cryptocurrency wallet and to sign transactions. It is essentially like the password for your cryptocurrency holdings.
Put OptionAlso known as a “Low option” a contract giving the owner the right to sell a specified amount of an underlying security at a specified price.
Public KeyThe public key is basically the cryptocurrency address used to encrypt a message. This is the code that you give out when requesting a payment.
Position (Open Position)Transaction which has not been Closed Out, or settled prior to the time agreed for settlement.
Position sizeThe size (e.g., number of shares) or the dollar amount of an particular investment placed.
QuoteAn indicative market price quoted for information purposes but not to deal.
Quote CurrencyThe second currency in a currency pair. Also called counter currency.
Risk ManagementA system that identifies, measures, seeks to reduce and reports/monitors risk to avoid losses.
RallyA recovery in price after a period of decline.
RangeThe difference between the highest and lowest price of a future recorded during a given trading session.
RatePrice at which a currency can be purchased or sold against another currency.
Realized P/LThe profit and loss that is generated by closing a position.
RebateAlso called refund. It is the portion or the entire invested amount given back to the investor at the end of a trade.
Reciprocal CurrencyA currency pair involving the US Dollar in which the US Dollar is not the first currency quoted. An example is the Euro, which is the base currency when paired with the US Dollar. EUR/USD is the way of quoting these two currencies.
Relative Strength Index (RSI)A technical oscillating indicator used to measure the overbought and oversold conditions of a financial instrument.
ResistancePrice level at which technical analysts note persistent selling of a currency.
Resistance Point or LevelA price recognised by technical analysts as a price which is likely to result in resistance but if broken through is likely to result in a significant price movement.
Retail Sales“Measures the monthly retail sales of all goods and services sold by retailers based on a sampling of variety of different types and sizes. This data gives a look into consumer spending behavior, which is a key determinant of growth in all major economies. “
Revaluation“An increase in the exchange rate for a currency as a result of central bank intervention. Opposite of Devaluation. “
Right-hand SideTaking the right hand side of a two way quote i.e. buying the quoted currency. AUD/USD = 1.0441/451, you would buy on the right hand side at 1.0451.
RiskExposure to uncertain change, most often used with a negative connotation of adverse change.
Risk CapitalThe amount of cash that an individual is ready to invest in the financial markets.
RobotSoftware designed with pre-set trading signals that gauge when to open or close a position in the market without human intervention.
RolloverAn overnight swap, specifically the next business day against the following business day (also called Tomorrow Next, abbreviated to Tom-Next).
Round TripBuying and selling of a futures or options contract.
Rule based TradingA system of rules for evaluating stocks and identifying trading opportunities.
SecurityAnother term for a financial instrument
SlippageDifference between the price of trade and actual execution. Often occurs at the stage of high volatility, where the fluctuation of price is high.
SatoshiA Satoshi is the smallest unit of a bitcoin, which is the eighth decimal place. It was named in honour of Satoshi Nakamoto, the inventor of bitcoin.
ScalpingA trading strategy that involves opening and closing short-term positions with the intention of making accumulated profits.
SECUS Securities and Exchange Commission.
SecurityA tradable financial instrument of any kind.
Security Exchange Commission (SEC)The U.S. government agency that oversees and regulates the national securities industry, stock markets and electronic securities markets.
Sell Limit OrderAn order to execute a transaction only at a specified price (the limit) or higher.
Sell StopA limit order with a limit placed below the current market price. Once triggered, the limit order becomes a market order.
SettlementThe process by which a trade is entered into the books and records of the counterparts to a transaction. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another.
Short PositionExcess of sales over purchases or of foreign currency liabilities over assets.
Simple Moving Average (SMA)A simple average of a pre – defined amount of price bars. For example, a 50 period Daily chart SMA is the average closing price of the previous 50 daily closing bars. Any time interval can be applied here.
SpotForeign exchange bought and sold for delivery two business days after the deal is firmed.
Spot MarketA physical market in which foreign currencies and commodities are bought and sold for cash at the current market price, settled “on the spot” and delivered immediately.
Spot PriceThe current market price. Settlement of spot transactions usually occurs within two business days.
Spot TradeThe purchase or sale of a foreign currency or commodity for immediate delivery (as opposed to a date in the future). Spot contracts are settled electronically.
Spot PriceThe present exchange rate at which traders can buy or sell a particular financial instrument.
SquarePurchase and sales are in balance and thus the dealer has no open position.
StochasticAn oscillating indicator that determines the level of change of the price of a financial instrument from one closing period to the next.
StockRepresentation of a share in the ownership of a company that is available for trading on the financial markets.
Strike PriceThe value of a financial instrument at the time when it is bought or sold.
SterlingAnother name for the British Pound (GBP). The full, official name, pound sterling, (plural: pounds sterling).
Stop-buyA buy order for a currency price that is above the current market, or current price. It becomes a market order when the specified price is reached.
Support LevelsA technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself. Opposite of resistance.Swapkeyboard_arrow_downSwissykeyboard_arrow_down
SwissyTrader’s nickname for the Swiss Franc.
SpreadDifference between the bid and ask price.
Stop-loss orderAn order placed which becomes activated when the market price reaches a designated level. Stop-loss orders are used to close out losing positions to prevent further loss.
Swap/roll overAn agreement between 2 parties to exchange financial instruments. Brokers may undertake a swap agreement with Prime Brokers to take positions on financial markets
Trading PlanA strategy on what, and how, you will place a trade.
Take ProfitsA limit order that is placed above the market with a long position or below the market with a short position. When the market reaches the limit price, the position is closed thereby locking in a profit.
Take Profit OrderA customer’s instructions to buy or sell a currency pair which, when executed, will result in the reduction in the size of the existing position and show a profit on said position.
Technical AnalysisIs concerned with past price and volume trends and often with the help of chart analysis in a market in order to be able to make forecasts about future price developments of the commodity being traded.
Technical CorrectionAn adjustment to price not based on market sentiment but technical factors such as volume and charting.
TermThe period from and including the trade date to and including the settlement date.
TickThe smallest possible change in a price, either up or down. Also known as a pip.
TickerStreaming display of the current or recent historical price of a currency pair.
Thin MarketA market in which trading volume is low and in which consequently bid and ask quotes are wide and the liquidity of the instrument traded is low.
Tomorrow Next (Tom Next)Simultaneous buying of a currency for delivery the following day and selling for the spot day or vice versa.
Trade BalanceMeasures the difference in value between imported and exported goods and services. Nations with trade surpluses (exports greater than imports), such as Japan, tend to see their currencies appreciate, while countries with trade deficits (imports greater than exports), such as the US, tend to see their currencies weaken.
Trade DateThe date on which a transaction is entered into.
TraderAn investor engaging in transactions in the financial markets.
Trading PlatformsA software application used for trading forex, usually over the Internet.
Transaction CostThe cost involved in buying or selling a currency pair. Some consider the transaction cost to be the actual value of the contract, while others feel it is the price of facilitating the trade, such as commissions and spreads.
Transaction DateThe date upon which the trading of a financial instrument takes place.
Transition PeriodThe period from and including the trade date to and including the settlement date.
TrendThe current direction of the market, whether up or down or sideways (which is sometimes referred to as non-trending or trading market).
TurnoverThe total money value of all executed transactions in a given time period; volume.
Two-Way QuotationWhen a dealer quotes both buying and selling rates for foreign exchange transaction.
Trailing StopA water mark stop loss that tracks the movement of the underlying security
Underlying AssetsThe asset which a derivative’s price is based on. E.g., an equity CFD on BHP has an underlying asset of a of share of BHP.
Unconvertible CurrencyA currency that cannot be exchanged for another because of foreign exchange regulations.
Under-ValuationAn exchange rate that is usually regarded to be undervalued. This happens if it does not exceed its purchasing power parity.
Unemployment RateThe percentage of people within the labor force who are considered to be without jobs.
UnitA widely used quantity of currency. In forex trading, one unit of USD is equal to one United States dollar, while one unit of EUR is one Euro. For JPY, one unit is equivalent to one Yen. One unit is the smallest trade size in Forex trading.
Unrealized Gain/LossThe theoretical gain or loss on Open Positions valued at current market rates, as determined by the broker in its sole discretion. Unrealized Gains’ Losses become Profits/Losses when position is closed.
Up-TickA transaction executed at a price greater than the previous transaction.
Up-Tick RuleIn the U.S., a regulation whereby a security 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 DollarThe currency of the United States of America.
Us Prime RateThe interest rate at which US banks will lend to their prime corporate customers.
Variation MarginRefers to the payment of profits or losses following revaluation of a CFD contract. For this purpose, open positions are revalued (or marked-to-market) daily.
Value DateFor exchange contracts it is the day on which the two contracting parties exchange the currencies which are being bought or sold. For a spot transaction it is two business banking days forward in the country of the bank providing quotations which determine the spot value date. The only exception to this general rule is the spot day in the quoting centre coinciding with a banking holiday in the country(ies) of the foreign currency(ies). The value date then moves forward a day. The enquirer is the party who must make sure that his spot day coincides with the one applied by the respondent. The forward months maturity must fall on the corresponding date in the relevant calendar month If the one month date falls on a non-banking day in one of the centres then the operative date would be the next business day that is common. The adjustment of the maturity for a particular month does not affect the other maturities that will continue to fall on the original corresponding date if they meet the open day requirement. If the last spot date falls on the last business day of a month, the forward dates will match this date by also falling due on the last business day.Also referred to as maturity date.
Value TodayA transaction with a settlement date that is on the same day as the trade date.
Value TomorrowA transaction with a settlement date that is 1 business day after the trade date.
Virtual BalanceYour current potential account balance that can be realized by closing all your open trades. For example, if your actual account balance is $925 and you have an open trade for $50 with a $25 profit, your virtual account balance will show $1,000.
VIX or Volatility IndexShows the market’s expectation of 30 – day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge”.
VolatilityA measure of the extent to which the exchange rate changes over a given period.
VolumeThe number, or value, of securities traded during a specific period.
VolatilityIndication of the movement of price in the instrument in question. Highly volatile instrument fluctuates rapidly in price, while low volatile instrument is (relatively) stable in price.
VPS (Virtual Private Server)A virtual private server (VPS) is a virtual machine sold as a service by an Internet hosting service. Traders use this to host their MT4 platform so that their trading strategies i.e. EAs can run 24 hours 5.5 days a week.
Working DayA day on which the banks in a currency’s principal financial centre are open for business. For FX transactions, a working day only occurs if the bank in both (all relevant currency centres in the case of a cross) are open.
Wire TransferThe electronic transfer of money from one financial institution to another.
World Bank GroupAn organization that offers technical and financial support to different developing countries around the globe.
WalletA wallet is simply somewhere that you can keep your cryptocurrency holdings. Crypto wallets are divided into:
 Software wallets, which can be installed on your computer.
 Mobile wallets, which are available for mobile devices.
 Web wallets, which are hosted online and are available through any web browser.
 Paper wallets, which are made by printing your public and private keys (or QR codes) on a piece of paper and securing it the old fashioned way.
 Hardware wallets, which are small USB devices that hold your private keys and so must be plugged into your computer for you to be able to sign a transaction.
WhipsawSlang for a condition of a highly volatile market where a sharp price movement is quickly followed by a sharp reversal.
Wedge Chart PatternChart formation that shows a narrowing price range over time, where price highs in an ascending wedge are incrementally less, or in a descending wedge, price declines are incrementally smaller. Ascending wedges typically conclude with a downside breakout, and descending wedges typically terminate with upside breakouts.
XIt is a NASDAQ stock symbol. It gives a representation of a mutual fund.
XEAbbreviation for Xpress Engine. It is one of the most visited financial sites that provide useful tools to traders.
XAGA currency symbol of silver. It is precious metal with the highest electrical conduction properties of any metal. It is used mainly in jewellery, photography, and for scientific and industrial purposes. It has been used as the basis for currencies in the past. Silver is traded as a commodity on various security exchanges. Like many precious metals, silver is volatile but generally maintains relatively high prices.
XAUXAU is the currency code for gold. By popular demand, here are live gold bullion prices in eleven major currencies, US Dollars XAU/USD, Pounds Sterling XAU/GBP, Euros XAU/EUR, Australian Dollars XAU/AUD, Canadian Dollars XAU/CAD, Hong Kong Dollars, Rands XAU/ZAR, Rubles XAU/RUB, Rupees XAU/INR, Swiss Francs XAU/CHF, Yen XAU/JPY.
XAU/USDXAU/USD exchange rates for Gold to U.S. Dollar Starting July 15th, 2011
YardA traders’ term for a billion as in a billion dollars.
Yield CurveA graph that illustrates the correlation between the interest rate and the time to maturity of the debt instrument for a particular borrower using a particular currency.
ZARThe currency symbol of the South African Rand.
Zero-BoundA situation whereby interest rates are very low (close to zero percent), making it difficult for central banks to institute measures for stimulating expansion of the economy.


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