GLOSSARY

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
At Market

"At Market" term is being used to define a certain order set by client in an investing purpose for buying and selling an instrument at the current market price.

Aussie
A term which is mainly used in slang language to correspond with the ordinary and formal term traditionally named Australian dollar. As for different countries, there are different slang's names for the currencies. Like buck in the USA for the United States dollar or "Loonie"-- the slang name for Canadian dollars. And sometimes to differentiate the Australian dollars from the others it is named Aussie. Furthermore, it has a symbol which is shown as A$, AU$ or AUD.
Ask Price
The price offered for buying a particular financial instrument. The price, also called "offer price", is a price which a seller is willing to accept for sale of the particular financial instrument.
Base Currency
Base currency is the term which is using to denote the first currency (primary currency) that is mentioned in the currency pair. The second one calls the quote currency. Furthermore, the base currency marks the domestic currency or the leading currency Most important base currencies which are interesting for currency trader are the Japanese Yen, the EUR and the USD.
Bear Market
A tedious period of time while all the prices on investments, capital issues and commodities are falling in leaps and bounds by more than twenty percent and all of it is conducted by broad in content pessimism. At such periods the interest in investing becomes very low, worry and disturbance about economic conditions grows and the majority of investors, dealers and speculators try to get rid of their investment documents more than taking a high risk keeping them. Bear markets usually arise when the economy incurs losses and the number of unemployed is extremely on the increase. Furthermore, it begins when there is a high risk of inflation. The term "bear" has been used in financial vocabulary since the 18th century. The origin source of its usage is still not clearly known. The opposite term of it is the bull market.
Bull Market
Quite a long period when all the prices on the investment documents are rising really fast, and it helps to boost the profits. Most of the time it happens owing to the fact that the economic climate begins to rise in a positive way and makes an investing business indifferently well. The bull market is represented by optimism, positive expectations and high investors' assurance that such a progressive result will last long enough to make a descent amount of money.
BID PRICE
The price offered for selling a particular financial instrument, i.e. the price at which a buyer is willing to pay for the particular financial instrument.
Cable
Cable, also known as is a term used in slang language among Forex traders to indicate the swap rate between British Pound Sterling and U. S. dollar. A wide usage of this term takes its origins from 1880s because of transatlantic cable, which was used to transfer the exchange rate of the major currency between Britain and the USA. Furthermore, cable is used as a slang term in the forex market for the name of British Pound Sterling.
Currency
It is a certain form of money as coins, treasury notes, and banknotes, which are used by authorities of the government and revolved inside an economy and is found in public circulation. Currency is used as an instrument of exchange for goods and services and shows the foundation of commerce. Every country has its own currency, except for Euro, which is applied to the certain European countries. Traders frequently deal in a currency on the Forex, which is one of the most intensively traded markets in the world.
CONTRACT
The trading unit of financial instruments.
Day Trading Forex
A practice in investing when one buys or sells capital issues and afterwards sells or buys these same issues in the same trading day. This day includes the opening price and the closing price on the same trading day with the intention of bringing in an income from short-term alterations in price variations. The showings in such day trading Forex traders took part in are on a very substantial risk as a result of the absence of the guarantee that the price may or will vary in the hoped-for direction. Nevertheless, FX day traders supply the market with much of liquidity
Economic Indicators
Economic Indicators are the specified historical data and fundamental analysis about an economy. These Indicators permit to predict some changes in the future of an economic state. Those Indicators may impact on the currency market in a very significant way that is why it is so important for the investors to know how to interpret all the analysis that is received from these economic Indicators. These Indicators include a huge amount of statistics, economic reports and summaries. The big value is to know and learn how to read the statistics of the Indicators about the economic state and where to find them for improving the economy itself and your income, particularly.
Exchange Rate
An exchange rate means a certain price at which one currency can be exchanged for another. It is a value of the country's currency that can be converted into foreign country's currency. Most of the time in financial instrument currency is stated in terms of U. S. dollars.
Exotic Currencies
It is a term which is used to identify the currencies that are illiquid and have bounded time duration in market trading. Exotic currencies are not that large for active trading. That's why these currency pairs are often traded by speculators and they are not taking into consideration in Forex trading and a standard brokerage account. Sometimes, speculators buying an immense amount of exotic currency with the hope of in the future it will have some value. Major currencies are U.S. dollar, Euro, Swiss franc, etc. and the examples of exotic currency are Indonesian Rupiah, Taiwanese Dollar, Uruguay peso etc.
EXPIRATION DATE
The last day of trading for a Futures contract that will cease to exist.
Floating Exchange Rate
It is an exchange rate regime of the country that allows prices to change in an unrestricted way. This means that central banks don't fix the currency's price, and it may fluctuate with a relationship to another currency. The currency value is resolved by trading in Forex. Floating exchange rate has an advantage in the economic state but also it may expose itself to currency appraisements and depreciations which are depended on the fluctuations of market. This rate is also called a flexible exchange rate and it is determined by a market
Forex Market
It is a foreign exchange market in which currency is converted into another, making possible international transactions to participate without any physical transportation of gold. Forex market is the largest market that consists of banks, central banks, hedge funds, commercial companies, retail forex brokers, investment management firms and investors where the participants have the power of buying, selling, exchanging and speculating on currencies of different countries. It processes trillions of dollars value of transactions every day, and it includes the world's currency. The Forex market is opened round-the-clock five days a week.
FUTURES
A standardized contract traded on a future exchange to buy or sell a specified financial instrument at a pre-determined price, at a future date.
Good Till Cancelled Order (GTC)
Good till cancelled order is an order to sell or buy the security at a limited or particular price that stills active up to the time when the investor decides to cancel it or it filled. In the case when there were no good till cancelled actions and instructions the order will breathe out at the end of a day trading when the order was sited. Usually GTC order is cancelled by brokers after a month or two. Such type of order mostly is set at a value that is away from the price it was set at first. If the good till cancelled order still stays unfilled, the broker will usually corroborate from time to time that the client still owns the transaction and wants it to occur after it is reached the target price.
Inflation
Inflation is the condition when the general level of prices for purchasing increases. Government always tries to decrease the inflation with the aim to minimize it or at least leave on the fixed level. By inflation means the loss of money's value. It is measured in an inflation rate the more it raises the more raise the prices for goods and services. Nowadays, the economy of a country considers as a stable when its rate of inflation doesn't start to grow to the side of increasing that level. A country's stability and economic growth depend very much on the inflation's level.
Initial Margin
It is a specified sum of money, which is lodged by both sellers and buyers who will make contracts to guarantee the fulfillment of the terms of the contract. Initial margin is a certain percentage of cash or some securities, which are required to be lodged before winning in different margin transactions. The minimum percentage that is required for the contract is 50% but sometimes broker advice to deposit a bit more than fifty percents. For the contracts that are going to appear in the future, initial margin needs are usually set by the exchange.
Limit Orders
These are the orders that are given to a broker with the aim to buy an indicated amount of securities at suggested or lower of a mentioned price, or to sell them at the suggested or higher specified price. This price is called the limit price. Such an order allows the investor or a trader to bind the length of a period the orders can be distinguished before canceling them. The limit orders are more favorable because they help to prevent the risk of losses that might occur in purchasing or selling financial instruments.
Liquidation Level
A liquidation level is a peculiar level that is used in Forex trading, when a trader's account reaches causes that demand a liquidation of Forex positions. This level is presented as a percentage worth of funds. It is used to prevent a risk of increasing the Forex trader's positions. When a liquidation level is set, it helps to decrease the risk of losses and prevent the trader of being unable to return the leverage that is given at the start of participating and earning money in Forex trading. As the Forex trading market uses leverage in most of the cases, the liquidation level is an appropriate insurance for the dealers who hold traders' accounts to prevent losing money and possibility of repay the assets that were borrowed to do the Forex trades.
LIQUID MARKET
Market with a high degree of liquidity, low spread, costs and volatility, often resulting from a large number of buyers and sellers.
LEVERAGE
The use of small initial investment, credit or borrowed funds as attempt to amplify the potential gains of an investment
LOT
The term used to describe a designated number of contracts, e.g., a five lot purchase.
MARGIN REQUIREMENT
Minimum amount of funds required for each open position held open in client's trading account, in accordance with the chosen leverage. These funds are considered as a guarantee and not a cost.
MARGIN CALL
It is a demand for additional funds in order for open positions, held by the client, to remain in the market.
MARKET RISK
The financial risk related to the exposure of the investment, due to the uncertain moves in the market prices.
One Cancels The Other Order
It is a special type of the order that is set with the aim of making higher profits. One cancels the other order means that some sort of order is given including itself two parts of the order that are set at the same time. Whereby one part of the order is made the other part of it is being automatically abrogated. Such type of order is very useful for those traders who are limited with assets and want to insure themselves from risks. For example, An investor with limited funds may place an order to buy both stocks and bonds and specify that it's a "one-cancels-the-other-order." In other words, if the market favors stocks and they are bought, the order to buy bonds will be canceled. Conversely, if the market suggests bonds are the way to go, the order will be to buy bonds and the order to buy stocks will be canceled.
Over the counter (OTC)
This term designates the financial instruments and securities that are not traded on a formal exchange market. In most of the cases the dealers come to terms by networks or phone calls. Usually this sort of trading is using by small companies, which don't have such an amount of money to venture transactions in the ordinary exchange market, and they can't be trading with a big list of requirements. Such securities that are offered over the counter may be also known as "unlisted stock". A lot of investors can trade over the counter trading OTC and help traders to reconsider the usual state of their financials and holidays. Therefore, there can be an illustrative example.
ORDER
An instruction for a transaction to be executed at a specific price. It is executed only when the market price reaches the price specified in the order. An order reflects investor/trader's expectation at the time when the order was placed.
Pip
It is a term which represents an abbreviation of the percentage in point and means the smallest value of the unit that the exchange rate is able to produce during the movements of the prices. It refers to the fourth decimal point of the currencies in the Forex market. And the least move that gives a pip is 0.0001, which stands for 1/100th of 1 percent and is usually referred to as one basis point. The only exception is the Japanese Yen that refers to two decimal places.
Pivot Points
It is an indicator of technical analyze that is used to predict movements in the levels for securities, and it calculates the average of securities' low, high and closing prices of a day trading. The levels are resistance and support, and they are differentiated by increasing or decreasing the prices of these pivot points. Pivot points most of the time are used as an indicator of prediction and analysis of the foreign exchange market. It is computed by the sum of the prices divided by 3. These points are usually calculated with the help of the calculator
Quote
It is a term that requires the lowest ask or the highest bid price that is available for securities at any time when they can be sold or bought. Such quote shows quantity and price for what the trader is willing to purchase or sell the shares for. In addition, it determines the last and the most recent value at which the securities are traded by the agreement of buyer and seller when some sum of the funds was transacted. Furthermore, the term quote is known as a "quoted price" of an asset.
Resistance
Resistance is the term that refers to technical analysis and determines the incapacity of a market or a stock to raise overhead the particular price on the purpose that sellers begin to exceed the buyers in a number for some period of time. Often resistance is directed to the term "resistance level".
Short Position
Short position refers to the selling of a borrowed commodity, currency or security with the outlook that the funds will fall in prices. Besides, in the meaning of options, short position represents the sale of an options' contract. Its contrary is long or long position.
Spot Fx Trading
Spot fx trading is the meaning of the market where the commodities or foreign currencies are buying or selling with the purpose of immediately delivery or exchange. In addition, the futures transactions that will expire in the nearest month are considered for spot fx trading.
Spread
Spread is a sum of pips that occur between the bid and ask prices. It is an option that Forex brokers use to make and earn money on Forex trading, which is placed on the network. It represents the difference between the prices of bidding and asking. Besides it establishes the position of buying one option and selling another that is of the same group but of different series. Most of the time the spread is around the current value that the broker of Forex is paying. So during the purchasing the trader receives one end of a spread and during selling gets the other end, and vice versa. And when the time to close the trade comes. They will always pay the spread.
Stop Loss Order
A stop loss order is an order that is given by a trader and refers to the purchasing or selling the securities or currency once its value increasing or decreasing a certain and particular price. It is directed to bind the losses of an investor on positions of securities. Such order is also called a "stop-market order" or "stop order". This strategy gives investors the opportunity to resolve their loss limit beforehand, excluding emotional and psychological factor of making the decisions. Besides, in situations of holidays where the trader can't watch the stocks for rather a long period of time becomes a great idea of using the stop loss order.
Support Levels
It is a certain level of value at which many buyers aspire to enter the stock. If its price falls in the direction of a support level it is an inspection for the stock: the support will be either wiped out or reconfirmed. In the first case, it will be wiped out when the buyers are not entering the stock, and it falls below the level of support. And in the second case it will be reconfirmed when many buyers move into the stock, which will cause the rise and changes directly from the support.
Technical Analysis
Technical analysis is a certain method that involves predicting the prices of the Forex market by a possibility of analysis the data and received information about the circulation and fluctuations in Forex values. It relies on the assumption that the data of the Forex market may help to predict the trends of the market in the future. It differs from the fundamental analysis by the lack of consideration of the peculiar price. It is believed that with the help of technical analysis, there is a possibility to predict the future price of the stock by studying the historical values and other trading changes. Furthermore, a lot of technical analysts suppose that technical analysis can be in use to the market as to an individual stock.
TREND
Trend is a general direction of the market of a certain financial instrument.
Volatility
It is a rate where the price of securities changes up and down. It is based on computing the annualized standard deviation of fluctuations in prices during the day. The price has high volatility in the case that the stock prices are moving up and down fast and dramatically over not very long periods in either direction. If the price is mostly stable and doesn't change, it means that the volatility is low. So, volatility is directed to the amount of indecision or risk about the volume of changes in the securities' prices.
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