FOREX DICTIONARY BY FOREX TRADER PH
A
Ask Price - the price where the trader is willing to buy the currency pair.
B
Buy Order - a type of market order where a buy order is immediately executed.
Broker - A firm that offers a variety of trading platform that allows a retailer to buy and sell a product or currency.
Base Currency - the first currency in a currency pair.
Bear Market (Bearish Market) - is a market trend where the price of the product is continuously decreasing.
Bull Market (Bullish Market) - is a market trend where the price of the product is continuously increasing.
Bank - a financial institution that is authorized to offer financial services such as loans, deposits, exchange currencies etc.
Bid Price - the price where the trader is willing to sell the currency pair.
Buy Limit Order - a price that is set to trigger a buy order when the current price is lower or equal to the price set.
Buy Stop Order - a price that is set to trigger a buy order when the current price is higher or equal to the price set.
Balance - the actual cash amount in your trading account.
C
Candlestick - is a visual representation of price movement. It shows the opening, closing, lowest and highest prices in different time frames.
Currency Pair - two currency in which the value of each is relative to the other.
Cross Currency Pair - a pair of currency that does not include the US Dollar.
D
Demo Account - a type of account offered by a broker where a trader uses virtual money to explore their different platforms.
Dealing Desk - a type of broker that re quotes the quoted price offered in the interbank and offers the re quotes to the retailer.
Day Trading - a type of trading strategy where a position either buys or sells is closed within the day.
E
Equity - is the real time amount of your account balance after you open a position.
European Central Bank - the central bank of the European Union countries which adopted the Euro currency.
Expert Advisor - a program of automated trading that mimics the algorithm of a real trader.
End of Day Order - a type of market order which will be canceled at the end of the day
Electronic Communication Network - a network that allows a trader to access currency exchange with interbank prices.
Exotic Currency Pair - a pair of currency for which the other pair is a less volatile currency.
Exchange Rate - the relative value of the base currency to the quote currency.
F
Free Margin - a part of the equity that is not linked to any position opened by the trader.
Fundamental Analysis - a kind of trading strategy that utilizes the economic news of a country as an indicator to increase the accuracy of market prediction.
Federal Reserve System - the central bank of the US.
G
Good Till Cancel Order - a type of market order that will stay as pending order until the trader canceled it.
H
Hedging - Buying and selling at the same time is called hedging.
I
Indicator - a wide range of trading tools that can be used to improve market analysis.
Inflation - a rate at which a good and services in an economy increase over time.
Interest - a charge from borrowing money at a particular rate.
Interbank - a global network where banks and financial institutions trade currencies.
J
K
L
Lot - the amount of product we trade in units. 100,000 units is equivalent to 1 Standard Lot. 10,000 units for 1 Mini Lot and 1,000 units of currency equivalent to 1 Micro Lot.
Liquidity - a process of buying and selling a currency pair without causing a significant effect on the exchange rate.
Leverage - an act of borrowing money to increase the buying power in trading.
Long Position - buying a currency pair.
M
Market Sentiment - pertains to the position of the majority of traders either in a long or short position.
Margin - a cash amount act as collateral when you open a position in Forex.
Margin Level - known as the ration of equity and the used margin of an open position.
Margin Call - a margin threshold for which a trader will not be allowed to open a new position.
Market Maker - a type of broker that re quotes a price quoted in the interbank and offered to traders. (w/ Dealing Desk)
Market Trend - the current direction of the market. Either bullish or bearish.
N
No Deposit Bonus - a credit balance offered for free by a broker. You can use it to trade and withdraw profit based on the broker's terms.
Non Dealing Desk - a type of broker that offers the quoted price from the interbank directly to retailers.
News - an economic indicator that guides the traders in market analysis.
O
Over The Counter - a type of transaction that is made directly by two parties.
P
Pip - also known as the point in percentage or the lowest amount of change in the value of a currency exchange rate.
Q
Quote Currency - is the second currency listed in a currency pair.
R
Regulatory Bodies - firms that provide rules and regulation to the Forex Industry.
Range Market - a market trend in sideways. It cannot be distinguished if the market will go up or down.
Real Account - an account associated with real money.
Rollover - the interest paid for holding a position overnight.
Risk Capital - the amount of money you invest that you can afford to lose.
Resistance Level - a price range where a large number of sellers is expected to push the price downward.
S
Scalping - a trading strategy that uses a small time frame such as 30mins, 15mins, 5mins, and 1 min.
Support Level - a price range where a large number of buyers are expected to push the price upward.
Sell Order - a type of market order where a sell order is immediately executed.
Short Position - a sell order in trading.
Swap - an interest earned or paid by holding a position overnight.
Straight Through Processing - a type of broker that provides direct access to traders in the prices quoted in the interbank. (No Dealing Desk)
Stop Loss - a trigger price to close a trade to avoid further loss in equity.
Spread - the difference in bid and ask price.
Sell Limit Order - a price that is set to trigger a sell order when the current price is higher or equal to the price set.
Sell Stop Order - a price that is set to trigger a sell order when the current price is lower or equal to the price set.
T
Trading Platform - a software that allows a trader to access the market.
Transaction Cost - the cost associated when opening a position. It can be in the form of spread or commission.
Transaction Date - the date where the transaction was executed.
Technical Analysis - a type of trading strategy that utilized past prices or historical charts to improve prediction on future trades.
Trader - an institution or individual that buy or sell currencies.
Trading - an act of buying or selling a product
Take Profit - a trigger price that closes a trade when the current price is equal to the price set.
U
Used Margin - the amount deposited for the current open position.
V
Volatility - it is the rate of fluctuation in a currency pair exchange rate over time.
W
Welcome Bonus - Bonus offered by a broker for which you can withdraw the profit you gained based on the broker's terms.
X
Y
Z