Ask (Offer) – The price you pay for a purchase of a security or currency pair.
Bank Rate - The rate which a country’s Central Bank lends money to commercial banks.
Base Currency - The first currency quoted in a currency pair within the Forex Market. It is also typically considered the domestic currency or accounting currency. A firm may use the base currency to represent all profits and losses.
Bid – The price a security or currency pair is sold for.
Breakout - A price movement through an identified level of support or resistance, which is usually followed by heavy volume and increased volatility. Forex Traders will buy the underlying asset when the price breaks above a level of resistance and sell when it breaks below support.
Bretton Woods - The Bretton Woods conference, attended by representatives of 44 nations in July 1944, was tasked with rebuilding the global economic system after World War II. It set up an alborate system of rules and regulations governing trade and a static, global economic policy and created agencies like the International Moentary Fund (IMF) and the World Bank.
Broker - The market participating body which serves as the middleman between retail traders and larger commercial institutions.
Cable - A slang word for the GBP/USD currency pair.
Carry Trade - In Forex, holding a position with a positive overnight interest return in hope of gaining profits just for the central bank’s interest rates difference.
CFD - Contract for Difference - special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.
Commission – fees charged by brokers for performance of service such as buying or selling a position.
CPI - Consumer Price Index - a statistical measure of inflation based upon changes of prices of a specified set of goods.
Currency Pair - The quotation and pricing structure of the currencies traded within the Forex market. The value of a currency is determined by its comparison to another currency. The first currency of a currency pair is called the "base currency", and the second currency is called the "quote currency". The currency pair shows how much of the quote currency is needed to purchase one unit of the base currency.
EA - Expert Advisor - an automated script which is used by trading software to manage positions and orders automatically with little to no manual control.
ECN Broker – is a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers do not discourage scalping, do not trade against the client and do not charge spreads, however they do charge a commission for every order.
ECB - European Central Bank - the primary regulatory body of the European Union financial system.
Fed - Federal Reserve - the primary regulatory body of the United States of America financial system, which division - FOMC (Federal Open Market Committee) - regulates, among other things, federal interest rates.
Fibonacci Retracements – In technical analysis, these levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% and 100% of the trend range. Fibonacci retracement is a very popular tool used by many technical traders to help identify strategic places for transactions to be placed, target prices or stop losses.
Flat (Square) – A neutral state when you are holding no open positions.
Fundamental Analysis – Market analysis that is based on news, political situations, economic data releases and global events.
GTC (Good Till Cancelled) – The order to buy or sell a currency with a fixed price that is alive (good) until it is either executed or cancelled.
Hedging - maintaining a market position which secures the existing open positions in the opposite direction.
Jobber –A slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight. (Day Trader).
Kiwi - A slang name for the New Zealand Dollar.
Leverage - The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.
Limit Order – An order to open a position for fixed or lesser price or close the position for a fixed or better price. The price that is set is commonly referred to a limit price.
Liquidity - The measure of markets which describes the relationship between trading volume and price change.
Long - A position which is in a Buy direction. In Forex Trading, the primary currency when bought is long and another is short.
Loss - The result from closing long position at lower price than the original purchase price or closing a short position with higher rate than opening. A loss a can also be incurred when the spread between the bid and ask or commission paid to a broker trading firm is higher than the actual difference between the open and close prices.
Lot – A definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).
Margin - The amount of equity contributed by a customer as a percentage of the current market value of the securities held in an account.
Margin Account – An investment account in which the Forex Broker lends the customer funds to facilitate a purchase. The loan in the account is collateralized by money that the customer has with the broker along with the actual securities purchased. If the value of the position bought on margin drops to a level determined by the margin agreement, the account holder will be required to deposit more cash or sell a portion of the position to bring the account current.
Margin Call - A brokerages demand on an investor trading with margin to deposit additional funds or securities to bring the Margin Account up to the minimum maintenance requirement. Margin calls occur when an account value depresses to a value calculated by a brokerages particular formula.
Market Order – An order to buy or sell a lot at that minute, whatever the current market price is.
Market Price – The price that a security or currency position is being traded for within the market or on the exchange at any particular moment.
Offer (Ask) - The price you pay for a purchase of a security or currency pair.
Open Position (Trade) – The purchase of a security or currency pair or the short sale of a security or currency pair to open a position.
Order – The request made by a customer for a broker to buy or sell the currency with a certain rate or at Market Price.
Pivot Point - The primary support or resistance level calculated basing on the previous trend's High, Low and Close prices.
Pip (Point) – The smallest price change that any given exchange rate can make. Since most major currency pairs are priced to four decimal places, the smallest change is that of the last decimal point - for most pairs this is the equivalent of 1/100th of one percent, or one basis point. (i.e. 1 pip = 0.0001).
Profit (Gain) – The amount of money gained when a position is closed.
Principal Value - The initial amount of money put in to any investment.
Quote Currency – The second currency quoted in a currency pair within the Forex Market. In a direct quote, the quote currency is the foreign currency. In an indirect quote, the quote currency is the domestic currency. The quote currency is also known as the "secondary currency" or "counter currency".
Realized Profit/Loss – The gain or loss for a closed position after spreads and commissions have been paid.
Resistance – In technical analysis, the price level at which a security or currency or an entire market can trade up towards, but not exceed, for a certain period of time. Often referred to as the "resistance level". The resistance level is a key trend marker and when reached, often is met with heavy selling which drives the position lower.
Settled (Closed) Position - closed positions for which all needed transactions has been made.
Slippage – The execution of an order at a price that is different than expected, the main reasons for slippage are - "fast" market, low liquidity and the broker's inability to execute orders rapidly.
Spread – The difference between the bid and ask prices for a currency pair.
Stop-Limit Order –An order to sell or buy a lot when the market reaches certain price. This is usually a combination of a stop-order and limit-order.
Stop-Loss Order – An order placed with a Forex broker to sell a security when it reaches a certain price. It is designed to limit an investor's loss on a security position.
Support – In technical analysis, the price level which, historically, a security or currency has resists falling below. It is thought of as the level at which a lot of buyers tend to enter the position causing it to rise. Typically, if the position falls below this level it brings on an influx of sellers causing the position to decline further.
Technical Analysis – The method of evaluating a position by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security's intrinsic (real) value, but instead use charts and other tools to identify patterns that can suggest future activity.
Trend – The direction of market which has been established with the influence of several different factors.
Unrealized (Floating) Profit/Loss - A profit or a loss on non-closed positions.
Useable Margin – The amount of available funds in an investment account above the actual client equity that may be used for trading.
Used Margin – The amount of money in the account already used to hold open positions open.
Volatility - A statistical measure of the number of price changes for a given currency pair in a given period of time.
