• A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • K
  • L
  • M
  • N
  • O
  • P
  • Q
  • R
  • S
  • T
  • U
  • V
  • W
  • X
  • Y
  • Z
A
  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • K
  • L
  • M
  • N
  • O
  • P
  • Q
  • R
  • S
  • T
  • U
  • V
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  • X
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Glossary
A

Appreciation:

Rise in value of one currency against another which has a floating rate.


Arbitrage:

A type of trading with excepted risks, when opposite transactions are carried out simultaneously on the same trading instrument.


Ask:

A price offered to a trader to buy currency.


Aussie (or «Australian») :

Dealer’s slang for Australian Dollar.

B

Bank of Canada:

The Central Bank of Canada, BOC.


Bank of England:

The Central Bank of England, BOE.


Bank of Japan:

The Central Bank of Japan, BOJ.


Balance:

Total result of all completed financial operations on a trading account.


Balance of Trade (BoT):

The difference between the volumes of exported and imported goods for a certain period of time in a country.


Bar Chart:

An instrument of technical analysis; a chart where prices are indicated with the help of bars or lines.


Base Currency:

The currency which goes first in the currency quote.


Bear:

A trader whose trading tactics are based on the decline in the currency value.


Bear Market (“bearish market”) :

A market where currency rates are expected to decline, «bearish market».


Beige Book:

A collection of the Federal Reserve reports that contain a review of the U.S. economic dynamics.

Benchmark interest rate:

The minimum interest rate that investors expect when buying securities.


Bid:

The price offered to traders to sell currency.


Big Figure:

A dealer’s slang indicating a currency pair movement of 100 points.


Borrowing:

Borrowing of foreign currency at interest for a certain period of time in the financial market.


Break:

A rapid decline in price.


Breakout:

A break of the price below its support level or above its resistance level; breakdown of the trend line.


Broker:

An agent who implements investor’s orders to conduct currency selling/buying transactions.


Brokerage Company

A Brokerage, whose mission is to bring together a seller and a buyer of foreign currency.


Bull:

A trader, whose trading tactics relies on the rise in currency price.


Bull Market («bullish market»):

A market where currency rates are expected to increase.


Bundesbank:

Central Bank of Germany.


Buy:

Currency purchase transaction.

C

Cable:

It is a slang for the British Pound.


Cancel-Replace:

An order from a trader to a broker to cancel a prior order with simultaneous replacement of the cancelled order with a new one.


Candlestick chart:

A technical analysis chart where price is indicated with the help of “Japanese candles”.


Capacity Utilization:

An economic indicator, which shows production capacity workload.


Car Sales:

An economic indicator of a number of sold cars, an index of consumer demand.


Cash Flow:

Cash flow of the capital as a result of trading activity over a certain period of time.


Cash Market:

A market where transactions are carried out at the prices specified through cash payment.


Central Bank:

A financial institution that regulates monetary policy of a country.


Change:

The difference between the price of the trading tool and its price on the closing session on the day before.


Chain Store Sales

An economic indicator, showing retail sales dynamics.


Channel:

An area on a trading chart where price movements are shown within specified limits.


Chart:

A price chart, displaying changes in price over time.


Chartist:

A trader who uses charts and technical analysis indicators as tools to forecast market price movements.


Clearing:

A trade settlement process.


Close Order:

The order closing procedure.


Collateral:

A trader’s insurance deposit.


Confirmation:

A situation on the technical analysis price chart when one or several indicators confirm the results of another indicator.


Correction:

A rollback of the price from the level reached.


Convertible Currency:

National currency which can be freely exchanged (converted) into another currency without special approval from the Central Bank.


Counter Currency:

Quoted currency that appears second in the currency quote record.


Cross Rate:

A currency quote without direct involvement of the USD.


Currency Conversion:

Exchange of one currency for another in a financial market.


Currency Convertibility:

The possibility of free exchange of one currency into another.


Currency Option:

An option contract that entitles a trader to buy or sell one currency for another at an agreed quote and within a stipulated time frame.


Currency Pair:

Two indicated currencies that make up a quote at the financial market.


Currency Rate:

The price rate of one currency against another currency.


Currency Symbols:

Letter symbols to indicate currency.


Currency Trading:

Trading operations to buy/sell one currency for another according to established rules.


Cycle:

The repetition of a certain pattern of price movement at time intervals.

D

Day Order:

It is a pending order to buy or sell that is valid until the end of the trading day and is cancelled automatically in case of non-performance on the day of issue.


Day Trader:

A trader who trades at the market during one day session.


Day Trading:

An opening and closing of the same position within one trading day.


Dealer:

A market participant who deals with currency buying and selling on his own account.


Dealing:

Non-cash currency trading.


Dealing center:

A company that provides access to financial markets by customer accounts for opening currency positions.


Deposit:

The amount of money transferred to the trader’s account to cover further operations.


Divergence:

A situation in technical analysis when charts of indicators differ from a price chart.


Direct Quote:

The amount of foreign currency required to buy a unit of national currency.


Downtick:

The downward movement of a currency price.


Downtrend:

The downward trend of currency price at the market.


Double Top:

A pattern of technical analysis, indicating when the rate goes up to a certain level twice and then descends.


Double Bottom:

A pattern of technical analysis when the rate drops twice to a similar level (rebounding in between) and then finally rebounds again.

E

European Central Bank:

European Central Bank, ECB.


Economic Indicator:

A fundamental analysis indicator, which shows general trends in the economy.


Efficient Market Theory:

A market theory (or hypothesis) that states it is impossible to beat the market.


Elliot Wave Theory:

Where price movement have a waveform (5 waves upward, 3 waves downward).


Employment Situation:

An economic indicator of labour market.


EU:

European Union.


EURO:

Unified currency of the European Union.


European Central Bank (ECB):

Central Bank of the European Union.


Exchange rate:

The rate of buying/selling one currency for another.


Existing and New Home Sales:

A macro-economic indicator of real estate sales at the secondary housing market.

F

Factory Orders:

Production orders (orders for durable and non-durable goods).


Federal Reserve Bank:

Central Bank of the United States of America.


Fed, FRS (Federal Reserve System):

Federal Reserve System of the USA.


Figure:

It is a slang to indicate basic figures of the exchange rate value or 100 points of the exchange rate movement.


Flag:

A pattern on a technical analysis chart indicating when currency price go up significantly, then moves in a narrow range for some time, followed by a rapid fall.


Flat:

A price that moves with no rises or falls.


Float Profit/Loss:

An amount of profit or loss on currently opened positions that is not fixed and is subject to change.


Floor Broker:

A broker who takes part in trading on the floor of the exchange.


Forecast :

An estimate of future trends in price movement, taking into account historical data of technical analysis and current macro-economic indicators.

Foreign Exchange:

Conversion operations of the foreign currency exchange.


FOREX:

A financial market where buyers and sellers carry out currency buying/selling transactions.


Foreign Currency

A currency of any foreign country that can be used as a medium of circulation in another country.


Forward Market:

«forward» A currency market where currency transactions are concluded at the prices set today, but for delivery at a future time specified in the contract.


Free Margin

Trader’s available funds that have not been used as collateral to open positions.


Fundamental Analysis:

A method of forecasting price changes that is built on the analysis of the current economic situation.

G

G7:

The most developed countries, including the USA, Japan, Great Britain, Germany, France, Italy and Canada, who meet periodically at summits to resolve the issues of the world economic development, «Big Seven».


Gap:

A break on the price chart of technical analysis that is caused by the difference in the opening price of a new day and the closing price the day before.


Greenback:

«Greenback» It is slang for the U.S. Dollar.


Gross Domestic Product (GDP):

An aggregate value of goods and services produced in a country in a certain period of time.


Gross National Product (GNP):

A gross domestic product plus income, gained from investments or work performed overseas.

H

Hedging:

A strategy that is used to reduce investment risks when urgent selling/buying transactions are concluded.


Hedgeable («hedgeability»):

Neutralising a profit or loss risk by buying or selling a companion investment that is expected to offset the profit or loss.


Hedge Funds:

American Funds that use hedging instruments.


High/Low:

Respectively, the highest and the lowest currency prices during the current trading day.


Housing Starts and Permits:

A macro-economic index that shows the number of houses under construction and the number of construction permits.

I

IFO:

The business optimism index, calculated by the Institute of Economic Research in Germany.


Import/Export Prices:

Data on the dynamics of prices for U.S. imports/exports.


Indicator Only:

Quotes that contain information and are not used for opening currency positions.


Indirect Quote:

The cost per unit of domestic currency, indicated in foreign currency units.


Indicator:

Data that gives information on the general state of the economy or financial markets.


Industrial Production:

An economic index and indicator of industrial production, which shows the total output of national plants.


Initial Margin:

The value of an initial deposit that is invested as a guarantee for transactions in the future.


Interbank Rates:

Currency rates set by the large International Banks for the other large International Banks.


Interest:

The payment for using the money borrowed as a loan.


Interest Rate:

A sum of money that is credited or paid to a lender by a borrower for the use of money. It’s calculated as the ratio of the payment for the use of money to the credit total amount. For instance, if a lender (bank) requires a client to pay $90 a year for the credit of $1000, the interest rate will make 9% (90/1000 x 100%). The interest rate can vary as a result of inflation or due to a change in The Federal Reserve’s policy.


Intraday:

Currency trading during one trading day.


Instant Execution:

Orders are filled at the quoted price, provided that this price is still valid.


Inflation:

The rate at which the general level of prices increases.


Investor:

A holder of financial resources on whose behalf currency transactions are conducted at the currency market.

J

Jobless Claims:

An economic indicator, showing the number of the registered unemployed.


K

Kiwi:

It is a slang for New Zealand Dollar.

L

Last:

The average value of the last bid and ask values; the price of the last transaction.


Leading Indicators:

An index of the leading macro-economic indicators.


Leverage:

The ratio between one’s own and borrowed money, used to conduct transactions.


Limit order:

It is an order to open a short or long position when the price reaches the target level.


Liquidation:

A closure of a trader’s open position because of margin call..


Liquid Currency:

The currency that can be bought or sold without restrictions at the world financial market.


Liquidity:

The ability to easily sell or buy securities or currencies.


Long Position:

Buying currency because its value is expected to rise in the future.


Loss:

A reduction in deposit amount due to losses.


Lot:

The smallest indivisible volume of a selling/buying transaction, at the currency market.

M

Maintenance Margin:

The minimum amount in a trader’s account necessary to maintain his open positions.


Margin:

The amount of equity in a trader’s account as a percentage of open positions, providing collateral for possible losses of a marginal trade.


Margin Call:

A Margin Call is a demand for additional funds to be deposited into your Account to meet your Total Margin Requirement because of adverse price movements in your open Positions or a change in Margin Requirement.Your Total Margin Requirement can be reduced by electing to close one or more Positions.


Margin Level:

An indicator showing the state of a trader’s trading account.


Margin trading:

Trading currency trading when part of the cost for the open position is borrowed from the broker, backed by collateral in the trader’s account.


MMarket Maker Spread:

The difference between the currency buying and selling price, established by a market maker.


Market order:

An order that is not limited either by time period, or by price and which should be performed immediately at the best current price.


Market Place:

A physical market; a trading place.


Market Price:

The last market price at which a transaction was conducted.


Market Users:

A medium sized bank or financial company that uses current quotes established by market makers, for currency operations.


Minimum Equity:

The minimum amount that a client has on his account.


Momentum:

A characteristic of a price movement; speed of change in currency price.

N

Net Factory Orders:

A macro-economic indicator that shows the increase in a number of industrial orders.


Net Position:

The total amount of currency for all open positions held by a trader.


Nonfarm payrolls:

The number of employees on the payroll (excluding agricultural sector).

O

Offer (or «ask»):

The price at which a buyer is requested to make a purchase.

Old Lady:

Dealer’s slang name for the Bank of England.


Open order:

Orders for open positions that will be performed when a declared currency price is reached.


Open Position:

A position which is still floating P/L. It is not closed/settled yet.


Order:

A trader’s order to a broker to conduct currency selling/buying transaction at a specified price.


Oscillator:

A technical analysis tool utilized by the market, to predict the future course of a currency.


Output Index:

The index of production volume output.


Overbought:

A market situation that takes place after a rapid and significant currency rise.


Oversold:

A situation in the market that happens after a rapid and significant currency decline.

P

Personal Income:

Economic data indicating changes in personal incomes of a country’s population.


Personal Spending:

Economic data indicating changes in spending of a country’s population.


Pips/Points:

The minimum movement in a currency price.


Position:

A number of opened “long” and “short” positions held by a trader.


Pound:

It is a slang indicating a Great British Pound (GBP).


PPI:

An index of producer prices (Producer Price Index).


Premium:

This determines the amount at which future prices will surpass spot prices.


Price Quotations:

Quotes of one currency price against another currency.


Profit:

The amount gained as a result of trading operations.


Program Trading:

A computerized trading system in which currency buy/sell signals are generated by a specially developed program.

Q

Quotation:

The price of one currency, indicated in the units of another currency.

R

Range:

The difference between two prices.


Resistance Level 

A horizontal or inclined price level on the chart; upper limit of price fluctuation.


Retail Price Index (RPI):

An indicator showing changes of retail prices in Great Britain.


Retail Sales:

An indicator of the retail sales volume.


Retracement :

A correction of a trend; a rollback of a trend for a certain value in an opposite direction, after which original movement is resumed.


Roll-over:

The way of transferring Stop-Loss orders to more favourable positions.


RSI (Relative Strength Index):

A technical indicator that specifies oversold and overbought zones.

S

Scalping:

A prompt strategy of gaining profit with the help of insignificant changes of the currencies prices.


Sell:

A currency selling operation.


Short:

An open selling position.


Short position:

An open position for selling currency with the intention to buy it in the future at a lower price.


Spike:

A rapid and significant upward or downward movement in a price.


Spot:

A transaction that is carried out immediately but with the payment made within two days from the moment of its conclusion.


Spread:

The difference between buying and selling prices of the currency, indicated in points.


Square:

The result of a trader’s transactions where profit size is equal to the losses size.


Sterling:

It is a slang for the British Pound.


Stop Оrder:

A currency buy or sell order when a specified price level is reached.


Stop Limit:

Pending orders; execution of the order is delayed by a dealer until the price at the market reaches a set level, specified in the order.


Stop Loss:

An order to close positions to limit losses.


Support Level:

A horizontal or inclined price level on the chart; upper limit of price fluctuation.


Swap:

Funds that are retained or added to a trader’s account for rollover to the next day.


Swap points:

Points calculated in advance for transferring open positions to the next day with the help of a swap operation.


Swissy:

It is a slang for the Swiss Franc.

T

Take-profit:

A currency sell/buy order for the open position at a specified price to gain profit.


Technical Analysis:

A method of forecasting future price directions with the help of examining price charts.


Tick:

A minimum one time change of a trading price in the financial markets.


Tick chart:

A price chart built on the tick values.


Thin Market:

A market with low liquidity.


Today’s High:

The highest price of a transaction today.


Today’s Low:

The lowest price of a transaction today.


Trader:

A person who buys and sells currencies from his personal account.


Trade Balance:

The difference between export and import values over a certain period of time.


Trading:

Securities or currency trading.


Trading platform:

A set of software and hardware supporting trading in the market.


Trailing-stop:

An order to minimize losses.


Transaction:

Opening and closing of a currency position.


Transaction Cost:

The payment for buying or selling of currency or securities on the market.


Transaction Date:

The date of a currency transaction.


Trend:

A term of technical analysis, indicating the general direction of the price movement.


Trend Line:

A straight line on a price chart drawn across the minimum values (in case of ascending trend) or across maximum values (in case of descending trend).

U

Unemployment:

A macro-economic indicator that shows the unemployment rate (in percentage against total number of able-bodied population).


Uptick:

A new price quote that is higher than the previous price.


Uptrend:

An ascending price trend, “bullish” trend.

V

Value Date:

The date when transactions are settled.


Volatility:

The speed at which price moves.


Volume:

The activity level of currency trading.


Volumes chart:

A bar chart that shows the volume of conducted transactions.

X

Wage:

A macro-economic index of data on wages.


Wholesale Prices:

A macro-economic index of changes in wholesale prices.


Wholesale Trade:

A macro-economic index of changes in wholesale sales.

Y

Yard:

a billion US Dollars, in dealer’s slang.

Z

ZEW:

The Center of European Economic Research; a non-commercial research institute founded in1990, which is located in Hamburg.