Forex terms pdf
A fee charged to exchange money from one currency to another. An item that has value; an investment such as stocks, options, or Forex. The abbreviation for the Australian dollar and U. The currency pair tells the reader how many U. Depending on the regulatory body, a dealer authorised to deal forex Forex. A trader who uses an automated system to input trades without any human input. The office location, or department, where the processing of financial transactions takes place. In countries where the currency is pegged, the range in which the rates are permitted to fluctuate. The rate at which a central bank is prepared to lend money to its domestic banking system. Days of the week when commercial banks are open for business in the country of the particular currency traded. A popular format for studying the price action of currency pairs. In terms of foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. The base currency is the currency against which exchange rates are generally quoted in a given country. One hundredth of one percent, or 0. Basket of USD Short: A number of operations where the USD is being sold against various currencies. A trader who believes prices will fall. An extended period of general price decline in an individual security, an asset, or a market. The price at which an investor can place an order to buy a currency pair; the quoted price where an investor can sell a currency pair. The point difference between the bid and offer ask price. The first two or three digits of a foreign exchange price or rate. The 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. An agent, who executes orders to buy and sell currencies and related instruments either for a commission or on a spread. Brokers are agents working on commission and not principals or agents acting on their own account. In the foreign exchange market brokers tend to act as intermediaries between banks, bringing buyers and sellers together for a commission paid by the initiator or by both parties. There are four or five major global brokers operating through subsidiaries, affiliates and partners in many countries. A company that offers trading services to the public. Trader who believes that prices will rise. A market that is on a consistent upward trend. An order to execute a transaction at a specified price the limit or lower. The process of buying a currency pair where a client pays cash for part of the overall value of the position. The word margin refers to the portion the investor puts up rather than the portion that is borrowed. Also known as Sterling. High interest rate currencies. A grid of positions including open orders, take profits, and stop losses built on a carry trading strategy. A carry trade where you are long the high interest currency and short the low interest currency. Excluding the volatility of the currency pair, this forex strategy is profitable based on the interest rate differential between the two countries. The carry is the cost of keeping a position open overnight. Each currency has a different interest rate associated with it. You are paid interest on the currency you are long on, and you must pay interest on the currency on which you are short. The difference is the carry, sometimes referred to as the cost of carry. Funds deposited in a trading account. A person who attempts to predict prices by analysing past price movements as recorded on a chart. A transaction that offsets the number of units in a previous open position. In the case of a long position, selling the exact number of units so that your exposure in the market is zero. The process of selling or buying a foreign exchange position resulting in the liquidation squaring up of the position. The rate at which a position can be closed based on the market price at end of the day. The fee that a broker may charge clients for dealing on their behalf. Written acknowledgment of a trade, listing important details such as the date, the size of the transaction, the price, the commission, and the amount of money involved. A month-to-month economic indicator, which gauges changes in the cost of living by measuring price changes in a common basket of goods and services that most people use, such as food, clothing, transportation, and entertainment. The value of one currency exchanged for another currency. A statistical term that refers to a relationship between two seemingly independent things. 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. A participant in a financial transaction. The other party in a Forex deal. In online spot Forex, the counterparty is the market maker. By virtue of economic, political, and geographical factors, some countries are more stable than others. Country risk in reference to Forex means the stability of the currency and the creditworthiness of its bonds. The exchange rate between 2 currencies where neither of the currencies are USD. The currency codes are specified by ISO Money issued by a government. Coins and paper money. It is a form of money used as a unit of exchange within a country. The two currencies in a foreign exchange transaction. The risk that shifts in foreign exchange rates may undermine the dollar or any other foreign currency value of overseas investments. A buy or sell order that will expire automatically at the end of the trading day on which it is entered. A trade opened and closed on the same trading day. A trader who tries to profit from short-term price movements, often taking and closing a position within the same trade day. A list of all the deals that were done in a trading day. The date a transaction is entered. A record of the basic details of a transaction that a dealer keeps, as opposed to the statements that customers receive. An individual or firm that buys and sells assets from their own portfolio, acting as a principal or counterparty to a transaction. Used loosely as the place where dealers facilitate pricing and executing trades. Computer networks that link up banks to create the Forex market. Examples of dealing systems are Reuters terminals and Bloomberg machines. In economics, when the balance of trades or payments are negative. A deep and long-lasting decrease in the price of goods and services within an economy. It is the opposite of inflation, which is an escalation in prices. An extended period of deflation can lead to a deflationary spiral — this is a decrease in prices resulting from reduced demand for goods and services, which leads to lower employment. With fewer people earning wages, demand falls even more and further perpetuates the cycle. Date when a Forex contract matures, usually two days after the transaction is entered. In the scope of online Forex trading, delivery of the actual currencies is not taken. Risk where a counter party is not able to fulfil his side of the deal even though he is willing to do so. When the value of a particular currency falls substantially. The volume of buys and sell orders waiting to be transacted for a particular currency pair at a particular point in time. A financial contract whose value changes in relation to an underlying security. For example, an option changes value according to the asset that underlies it. The information necessary to facilitate a Forex transaction. For example, the currency pair, rate, time and date, and the quantity. When a government allows the value of its currency to weaken in relation to other currencies. Quoting in variable units of domestic currency per fixed units of foreign currency. Exchange rate policy where the value of a currency is allowed to fluctuate, but the central bank will intervene from time to time. Refers to the situation where the bid price of a forward spread rate is less than the ask price. An account where a customer allows the institution to make trading decisions and buy and sell on his or her behalf. A portfolio of carry trade positions that is distributed among different carry currencies and funding currencies in order to limit losses in one particular carry trade position. The amount of foreign currency quoted against one US Dollar. Some terms are quoted in the amount of US Dollars per foreign currency unit, like the British Pound. The interest rates that apply to deposits or borrowing of a particular foreign currency. These rates are similar to those offered within the foreign country to citizens who keep money in deposit accounts. The term used by traders to signal that a contract has been agreed upon. The size of a drop in the value of an account from its peak to its low. Refers to either a small price decline in a currency or when a central bank engages in monetary policy to spur spending. An example of central bank easing would be lowering of interest rates. Forex ECN brokers provide access to an electronic trading network, supplied with streaming quotes from the top tier banks in the world. By trading through an ECN broker, a currency trader generally benefits from greater price transparency, faster processing, increased liquidity and more availability in the marketplace. A statistic that is used to gauge current economic conditions. An electronic communication network ECN is the term used in financial circles for a type of computer system that facilitates trading of financial products outside of stock exchanges. The primary products that are traded on ECNs are stocks and currencies. FX ECN brokers provide access to an electronic trading network, supplied with streaming quotes from the top tier banks in the world. An attempt to explain market activity by ascribing a pattern of eight waves to any complete cycle. The eight wave patterns consist of a five-stage advance and a three-stage correction. End of Day Mark to Market: In addition, any profits or losses are recorded. Ownership interest in a corporation in the form of common stock terms preferred stock. Total assets minus total liabilities; also called net worth. The value of a trading account graphed over a period of time. Euro Interbank Offered Rate: The Euro Interbank Offered Rate or Euribor is a daily reference rate based on the averaged interest rates at which banks offer to lend unsecured funds to other banks in the Euro wholesale money market or interbank market. US Dollars deposited in a bank outside the USA. An arrangement in the s and s where many European countries linked their currencies to prevent large fluctuations in value. It was one of several initiatives leading to the deployment of the Euro. Deposited funds in a trading account above and beyond what is required for margin requirements. The physical location of trading activity. Some famous examples include the New York Stock Exchange or the Chicago Mercantile Exchange. In finance, the exchange rates also known as the foreign-exchange rate, Forex rate or FX rate between two currencies specifies how much one currency is worth in terms of the other. In the case of a long position, the sale of the long currency. In a short position, the purchase of the short currency, resulting in a closed position. As opposed to the major currencies, which are heavily traded, exotics are the less traded currencies. The day on which a financial option is no longer valid. The net of all long and short positions for a particular currency. Fiat currency is the opposite of a gold standard arrangement. In a fiat currency system, the currency value rises and falls on the market in response to demand and supply pressures. It is this fluctuation that makes it possible to speculate on future currency values. Completing an order to buy or sell. An order that must be executed immediately based on certain criteria such as price and quantity. If it cannot be executed, the order is immediately cancelled. The price at which a buy or sell order goes through. When a buyer or seller requests a firm quote, the dealer provides a bid and ask quote that can be immediately executed if the buyer or seller wishes. The effect of interest rates on international money movement such that money moves into currencies paying higher interest rates. Foreign exchange policy where a central bank maintains an official rate for their currency, often intervening to keep the rate fixed within a limited range. Term describing a trading book with no market exposure. An exchange rate that is fixed, but is re-evaluated frequently. An exchange rate whose value is determined by market forces. Buying or selling one currency against another currency. The largest Forex centre in the world is London. Other financial centres, which follow the sun across the sky, are New York, Tokyo, Hong Kong, Singapore, and Zurich. An analytical, computer-based tool used to help currency traders with Forex trading analysis by charting the price of various currency pairs along with various indicators. Forex charting software packages are used by many traders to determine the direction on any given currency pair. Most Forex brokers allow traders to open a demo account prior to funding a full account or mini account. Groups formed in the major financial centres to encourage educational and social contacts between foreign exchange dealers, under the umbrella of Association Cambiste International. Free Forex Practice Account, trading software and charts. Forex demo accounts allow you to practice Forex trading without risking a monetary loss. A transaction that settles at a future date. The buyer and seller are bound by the contract to settle on the specified date. Differential added to or subtracted from terms spot rate to calculate the forward rate. The differential is based on anticipating future conditions and fluctuates accordingly. An exchange rate that forex from pdf spot exchange rate by forward points. The forward points are either added to or subtracted from the spot rate depending on anticipation of future conditions. The margin by which excess reserves exceed borrowings. The study of economic factors GDP, Trade Balance, Employment, and so on that can influence prices in financial markets. An investor who uses fundamental analysis. An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange while forwards are traded over the counter OTC. A term related to margin trading where you are controlling a position whose face value is greater than the money you deposit. An after hours electronic futures and options trading platform developed by Reuters. Selling a currency pair by first borrowing it, then returning it at a later time by buying it back hopefully once prices are lower. A commitment made by certain countries to fix the prices of their domestic currencies in terms of a specified amount of gold. Also known as the Bretton Woods System, the Gold Standard was enacted in and created a system of fixed exchange rates that allowed governments to sell their gold to the United States treasury at a fixed price. On August 15, President Richard Nixon ended the Bretton Woods system. In technical analysis, when two moving averages intersect, usually a short one like a 20 day and a long one such as 40 day. This is considered a favourable sign that the underlying currency will move in the same direction. 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. An order that does not expire at the end of the trading day, as is usual practice. Unlike what its name suggests, it does expire at the end of the trading month though, as opposed to being open forever. A type of limit order that remains in effect until it is either executed filled or cancelled, as opposed to a terms order, which expires if not executed by the end of the trading day. A series of positions and open orders that are built with a predetermined spread defined by the trader. A currency that investors have confidence in. Forex could be the US Dollar or the Euro. A price trend pattern which has three peaks, the middle one higher than the surrounding two forming what looks to be a head with two shoulders on either side. This pattern is seen as an indicator of a trend reversal. A term used to describe reducing risk associated with adverse market movements by using two counterbalancing investments, thereby minimising any losses caused by price fluctuations. For example, if you sell a house in Holland to relocate to the UK your new base currencyyou are in a long Euro EUR position and short Pounds Sterling GBP. To offset this position you would need to sell the equal amount of EUR to make up for the short GBP position. A private fund, which usually solicits investments from wealthy individuals. It usually invests in high risk, short-term instruments in order to achieve above-average returns. Buyer and subsequently owner of a currency pair. International Foreign Exchange Master Agreement. It is not dealable, but is for information purposes only. A rise in prices or a drop in the purchasing power of money. The first deposit by a customer, which determines a corresponding maximum trade size. When entering a position, the minimum amount that must be paid in cash. A market in which financial institutions can trade. The term refers to short-term money or foreign exchange markets that are only accessible to banks or financial institutions. There is no physical market place; the transactions take place over communication networks such as Bloomberg or Reuters. Positions that pdf opened and closed within the same trading day. The rate charged or paid for the use of money. 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. Positions that are opened and closed on the same day. A person or firm that introduces customers to a market maker often in return for commission or a portion of the spread. A term coined by the financial press to refer to the Japanese households that speculated on the carry trade and became a major seller of Yen, thereby driving the currency against the levels forecast by financial institutions. The Yen is t. It is the third most-traded currency in the foreign exchange market after United States dollar and the Euro. A trader who trades for small, short-term profits during the course of a trading session, rarely carrying a position overnight. For smaller countries, the act of orienting their currency to that of a major trading partner. An order that does not permit partial filling. If it cannot be completely filled, then the order is to be cancelled i. Refers to the bid quote, which is the price at which customers who are long a currency pair sell it. The ratio of margin to the maximum position size. Leveraging allows you to profit quickly, but lose money just as fast. The obligation to deliver currency as part of a spot transaction. In speculative Forex trading, currency is not delivered. All profits and losses are subtracted from margin deposits. An order to transact at a specified price or better. The specified price as part of a limit order. The simplest form of charting, a line chart plots a series of lines connecting the various price levels over a specified time period. Term used to describe a market where there are lots of buyers and sellers generating a great deal of volume. When a currency pair is long, the first currency is bought while the second currency is sold short. To go long on a currency means that you buy it. A long position is expressed in terms of the base currency. Standardised method of trading in Forex, which requires a trade ofunits of a particular currency. A set minimum margin that a customer must maintain in his pdf account. The minimum margin that must be available in an account to support all open trades. The minimum deposit required to maintain an open position. An account that allows leverage buying and short selling on credit. A notification that more funds must be deposited into an account because the value of the account has fallen below the minimum margin needed to cover the size of existing positions. In the hour Forex market, the market never closes. For administrative purposes, many banks institute 5pm EST as the market close in order to differentiate between value dates, as well as mark delivery dates. An order for immediate execution at the best available price. The most current quote for a currency pair. The date on which payment of a financial obligation is due. The biggest position that a margin deposit would cover. The MetaTrader 4 online trading platform is designed for financial institutions dealing with Forex, CFD, and Futures markets. It is has a user-friendly front-end trading interface. It provides technical analysis, charting and Expert Advisors to help you develop your own trading strategies. The different functions and options of this system allow great flexibility in trading. Constant monitoring of the market not required due to Expert Advisors, MetaQuotes Language II release from routine and allows programming automated trading strategies. Free of charge demo accounts. MetaTrader 4 supports different languages including English, German, Russian, French. Method of smoothing out data on price charts so that trends are easier to spot. Average refers to a mathematical average or a statistical mean that is plotted over the original curve. The total value of an asset less liabilities. A carry trade where you are long the lower interest currency and short the higher interest currency. This type of trade might be part of a hedging strategy. Net Interest Rate Differential: The difference in the interest rates associated with two currencies. Currency positions that have not been offset with opposite positions. A non-standard transaction size. In Forex, a standard lot is usuallyunits of a particular currency. Also known as the Ask Price, it is the price at which a seller is willing to sell. Buy or sell order that does not expire until cancelled. In theory the order does not expire. However, it usually does so at the end of the trading month rather than lasting forever. A position whether long or short that is subject to market fluctuations and thus profits or losses. A currency pair is overbought when its price rises much more quickly than usual in response to net buying. Once overbought, the pair is then expected to make a contrarian move, meaning its price is expected to fall. Trades that extend past the current trade day into the next. The maximum amount of a net long or short position that a dealer can carry over into the next dealing day. A currency pair is oversold when its price falls much more quickly than usual, declining too far in response to net selling. Once oversold, the pair is then expected to make a contrarian move, meaning its price is expected to rise. For example, the Chinese Yuan with the US Dollar. Most pegs are allowed to deviate within a small band. The smallest upward or downward price movements quoted in Forex. Changes in government policy or to a wider extent, government instability that might have negative effects on the currency. The cost of purchasing a second currency in terms of a first currency. Refers to the major currencies that are traded. When both a bid and ask price are provided for a currency pair. The second currency of two in a currency pair. The exchange rate quoted is how many units of the second currency you will receive for one unit of the base currency. The difference between the highest and lowest price of a currency pair during a given trading period. Price at which a currency can be purchased or sold against another currency. The profit and loss that is generated by closing a position. A 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. A market in which a government agency monitors and regulates industry activity to protect investors. An example is Forex trading in the United States. Price level at which technical analysts note persistent selling of a currency. Comprises a wide range of non-institutional traders, from large organizations to individual investors. In less than 10 years, a relatively small number of online currency brokers and market makers have had a massive effect on this market by efficiently exploiting technology, driving a five-fold decrease in the cost of trading. Daily calculation of potential profits or losses on open positions based on the difference between the settlement price of the previous trading day and the current trading day. Refers to the ask or offer price. This is the price at which traders buy. Risk Foreign Exchange Risk: The risk that the exchange rate on a foreign currency will move against the position held by an investor such that the value of the investment is reduced. Generally, the daily rollover interest rate is the amount a trader either pays or earns, depending on the currency pairs in question. In most cases,units of a currency. Selling a currency pair that involves being short the base currency and long the quote currency, with the intent of buying the currency pair at a later time when prices are lower in order to make a profit. The physical delivery of currencies made when a contract matures. In Forex, it is usually two days after the trade. In Forex, the date when physical delivery must take place. For most currency pairs it is two days after the trade date. Buying the exact same units of a currency pair to offset an earlier short sale of the same currency pair. In foreign exchange, when a currency pair is sold, the position is said to be short. When there is above ordinary interest in a currency pair, other major currency pairs that are thinly traded as a result of this are considered sidelined. Trades on FXTrade are settled immediately. Market where people buy and sell actual financial instruments currencies for two-day delivery. The current market price of a currency traded in the spot market. The value difference between the bid and ask price of a currency pair. A market that can accommodate huge volumes of buying and selling without large moves. The process by which central banks offset intervention in the Forex market by activities in the domestic money market. Another name for the British Pound GBP. A 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. Stop-buys are used by traders to establish positions in markets that they perceive to be rising in value. A 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. An effort to forecast prices by analysing market data, i. A price adjustment based on technical factors like resistance and support levels, as well as overbought and oversold levels, instead of market sentiment. Also called technicals, technicalities. The smallest possible change in a price, either up or down. Also known as a pip. Streaming display of the current or recent historical price of a currency pair. The smallest transaction size allowed. For many brokers the tradeable amount is the round lot, which is usuallyunits of a particular currency. With FXTrade, it is 1 unit. A Trading Model, based on its evaluation of historical analyses, forecasts, and your trading profile, makes recommendations about currency positions by anticipating fluctuations in the foreign exchange markets and capitalising on these movements. A software application used for trading Forex, usually over the Internet. The 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 pdf price of facilitating the trade, such as commissions and spreads. The current direction of the market, whether up or down or sideways forex is sometimes referred to as non-trending or trading market. A currency that cannot be exchanged for another because of foreign exchange regulations. A widely used quantity of currency. In FXTrade, 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 FXTrade. Your current potential account balance that can be realized by closing all your open trades. Measure of how much the price of a currency changes over time. When the banks in the country of origin for a particular currency are open for business. For currency pairs, this is compounded by the fact that both banks must be open. Live chat Contact us. Client Portal Live Account Demo Account. 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Spunti da cinque lettere a Manlio Dazzi e da una cartolina di Gianfranco Contini, in RIVISTA DI LETTERATURA ITALIANA, vol. XXVI, pp. 151-154 (ISSN 1724-0638) (Articolo su rivista).
Despite the proscriptions against stealing, bearing false witness, and coveting, at top of the list is belief that their interpretation of God is all that is owed fealty to and the point of everything else.
Details of standards, interpretations and amendments to be adopted in future periods are also detailed in note A5.