Forex Jargon, learn terms, industry speak & phrases

Forex Jargon, learn terms, industry speak & phrases

The currency of Australia, Christmas Island, the Cocos (Keeling) Islands, Kiribati, Nauru, Norfolk Island and Tuvalu. The currency of Curaçao and Sint Maarten (Dutch part). It is subdivided into 100 luma.

The theory holds that at these levels, (i.e. expansions) significant changes may be expected, for example, the end wave 3. A Japanese candlestick continuation pattern. During a downtrend, a long black body is followed by three small candlesticks, formed between the previous candle’s range – triggering a pause in the market. The resumption of the downtrend is signaled by the presence of the fifth candle which is a long black body.

Japanese candlestick bearish continuation pattern. During the course of a downtrend, the appearance of a long white candlestick is common, as a correction is part of the prevailing trend.

forex vocabulary

Examples of forex

A Japanese candlestick pattern signaling indecision. It has long upper and lower shadows. The open price and the close price are equal.

If there is a positive divergence between the price and the RSI, a possible buy indication may be in place. A Japanese Candlestick bullish continuation pattern. In the course of an uptrend, a long white body is followed by three small candlesticks formed between the previous candle’s range- triggering a pause in the market. The resumption of the uptrend is signaled by the presence of the fifth candle which is a long white body.

It is also known as range or consolidation. Even though it is expected to break out in the direction forex vocabulary of the prevailing trend, it is not unusual to break out in the opposite direction.

A system which gives out signals to traders to help them decide whether a specific time is suitable to buy or sell a currency pair. The currency of the Falkland Islands(Malvinas). It is subdivided into 100 santims. It is subdivided into 100 piastres and 1000 millimes. The currency of the Dominican Republic.

This data provides a look into consumer spending behavior, which is a key determinant of growth in all major economies. Revaluation When a pegged currency is allowed to strengthen or rise as a result of official actions; the opposite of a devaluation. Rights issue A form of corporate action where shareholders are given rights to purchase more stock. Normally issued by companies in an attempt to raise capital.

Past performance is not necessarily indicative of future results. Leverage -Leverage is the ability to control a larger amount of money with a small investment. Spread – The spread is the difference between the bid and ask prices within a forex quote. While forex pairs are similar to stocks or futures, they are unique instruments with their own vocabulary. Included below is a sampling of terms to help new forex traders gain familiarity with the concepts.

Normally associated with good ’til cancelled orders. Open position An active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal. Option Bitcoin Trading A derivative which gives the right, but not the obligation, to buy or sell a product at a specific price before a specified date. Order An instruction to execute a trade.

Identification of Intermediate Cycles may be performed by measuring the time interval between the cycle’s troughs (lows) on the X-axis of forex the price chart. A method used in Point and Figure charts to calculate price targets. It applies to both 1-box and 3-box reversal charts.

  • Just like Harami, a small candlestick body- (Doji in this case) follows a candlestick of a long white body.
  • FRA40 A name for the index of the top 40 companies (by market capitalization) listed on the French stock exchange.
  • At best An instruction given to a dealer to buy or sell at the best rate that can be obtained at a specific time.
  • The upper shadows are very small if present – thus demonstrating the strength of the ascent.
  • It is a straight line connecting successively higher bottoms during an uptrend or successively lower tops during a downtrend.
  • A Continuation price pattern composed of a small symmetrical triangle, preceded by an almost straight-line move called a flagpole.

Pullback The tendency of a trending market to retrace a portion of the gains before continuing in the same direction. Purchasing managers index (PMI) An economic indicator which indicates the performance of manufacturing companies within a country. Purchasing managers index services (France, Germany, Eurozone, UK) Measures the outlook of purchasing managers in the service sector. Such managers are surveyed on a number of subjects including employment, production, new orders, supplier deliveries and inventories. Readings above 50 generally indicate expansion, while readings below 50 suggest economic contraction.

forex vocabulary

Their reports can frequently move the currency market as they purport to have inside information from policy makers. The accuracy of the reports has fluctuated over time, but the market still pays attention to them in the short-run. Models Synonymous with black box. Systems that automatically buy and sell based on technical analysis or other quantitative algorithms. MoM Abbreviation for month-over-month, which is the change in a data series relative to the prior month’s level.

Glossary of trading terms

The Offer price is also known as the Ask. The Ask represents the price at which a trader can buy the base currency, which is shown to the right in a currency pair.

When bulls buy at the ask price (the price at which sellers are willing to sell), their position is immediately in a loss that equals the bid/ask spread. The exchange rate of a currency pair is what all traders follow. The exchange rate is often simply called the price, since it shows the price of the base currency expressed in terms of the counter-currency. For example, if the exchange rate of EUR/USD is 1.15, this means that one euro costs $1.15, or it takes $1.15 to buy one euro.

forex vocabulary

It is a financial derivative where traders have the opportunity to trade assets without owning them. The buyer and the seller enter into a contact where the seller agrees to pay the buyer the difference between the entry and the exit price provided the difference is positive. If the difference is negative, then the buyer pays the seller. In Technical Analysis, price is considered the most reliable indicator. Chart patterns are filtered by indicators and confirmed by price.

Stop entry order This is an order placed to buy above the current price, or to sell below the current price. These orders are useful if you believe the market is heading in one direction and you have a target entry price. Stop-loss hunting When a market seems to be reaching for a certain level that is believed to be heavy with stops. If stops are triggered, then the price will often jump through the level as a flood of stop-loss orders are triggered. Stop loss order This is an order placed to sell below the current price (to close a long position), or to buy above the current price (to close a short position).

A long black candlestick forms in the direction of the prevailing trend, signifying that the decline is still in force. The next session gaps below, forming a small candle that acts as an obstacle to further decline. A long white candle drives the market higher, well into the long black candle’s body and more specifically, above its mid-point – Indicating a bullish reversal. Next session gaps below, forming a small candle, in this case a Doji that acts as an obstacle to further decline. A long white candle drives the market higher, well into the long black candle’s body and more specifically above its mid-point, indicating a bullish reversal.

Those are basic terms of the Forex market that all traders need to know about and understand early in your trading career. Although not seen as frequently, reversal patterns sometimes take the shape of saucers (or rounding bottoms).

Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone. We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances.