Account History
listing of all transactions (trading and non-trading) completed for a given account.
profiting from differences in the price of a single currency pair that is traded on more than one market
Ask Price
the price at which sellers are willing to sell a currency pair, also known as the 'offer', 'ask price', and 'ask rate'.
Bar Chart
a chart type consisting of four points: high price and low price (represented by a vertical bar), opening price (represented by a small horizontal line to the left of the bar), and closing price (represented by small horizontal line to the right of the bar).
Base currency
the first currency in the pair.
Basis point
one hundredth of one percent, or 0.0001.
Bid Price
the price at which an investor can place an order to buy a currency pair.
Bear Market
an extended period of general price decline in an individual security, an asset, or a market.
Bull Market
a market distinguished by rising prices.
Candlestick Chart
a chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.
a transaction fee charged by a broker.
the standard unit of trading.
Contract for difference(CFD)
agreement between a client and a provider to exchange the difference between the opening and the closing value of the contract.
Currency Pair
the two currencies that make up a foreign exchange rate.
Day Trading
an approach to trading which involves entering and closing trades on the same day or trading session.
Demo Account
free FOREX practice account that allows beginners (or veterans) to measure the profits from hypothetical trades.
a fall in the value of a currency due to market forces.
financial instrument (forwards, futures, options, swaps) whose value is derived from an underlying security.
Economic Calendar
type of calendar that is intended to inform financiers and traders about the scheduled major economic indicators, government reports and speeches by influential people.
European Central Bank (ECB)
the Central Bank for the new European Monetary Union.
completion of a trade.
Expiration Date
date after which a financial contract or derivative is no longer valid.
net of all long and short positions for a particular currency (pair).
Federal Reserve Bank (Fed)
the central bank of the United States, responsible for using monetary policy to promote economic growth and price stability.
Foreign Exchange
the simultaneous buying of one currency and selling of another.
Forward Contract
derivative Agreement between two parties to buy or sell an asset at a certain future time for a certain price agreed today. This is in contrast to a spot contract, which is an agreement to buy or sell an asset today.
Fundamental Analysis
analysis of economic and political information with the objective of determining future movements in a financial market.
Foreign Exchange.
Going Long
the purchase of a stock, commodity, or currency for investment or speculation.
Going Short
the selling of a currency or instrument not owned by the seller.
a position or combination of positions that reduces the risk of your primary position.
a general rise in the price level of goods and services, measured by a price index, which leads to a decrease in the purchasing power of money.
Initial Margin
funds required to enter into a leveraged transaction; quoted as a percentage of the price of the asset.
Interbank Rates
Foreign Exchange rates at which large international banks quote other large international banks.
Intra-Day Position
any position that is opened and closed within the same trading day.
also called margin. The ratio of the amount used in a transaction to the required security deposit.
Line Chart
most basic type of chart, which plots a series of price levels over time and connects them with lines.
the ability of a market to accept large transaction with minimal to no impact on price stability.
Long position
a position that appreciates in value if market prices increase. When the base currency in the pair is bought, the position is said to be long.
a unit to measure the amount of the deal. The value of the deal always corresponds to an integer number of lots.
the required equity that an investor must deposit to collateralize a position.
Margin Call
oral or written notification requesting a customer to either deposit funds or sell financial instruments in order to return the maintenance margin to an acceptable level.
Market Maker
refers to any dealer who provides a two-way quote a bid and ask price in which they stand ready to buy or sell.
the date for settlement or expiry of a financial instrument.
Net Position
the amount of currency bought or sold which have not yet been offset by opposite transactions.
News Trading
an approach to trading that seeks to anticipate and profit from (the markets’ reaction to) news announcements.
Offer (ask)
the rate at which a dealer is willing to sell a currency.
Offsetting Transaction
the act of entering into a position diametrically opposed to an existing position.
Open position
an active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal.
Overnight Position
a trade that remains open until the next business day.
customer instruction to a broker/dealer to buy or sell currency. Unless a time limit is attached to the order, it will remain valid until either executed or canceled.
the smallest unit of price for any foreign currency. Digits added to or subtracted from the fourth decimal place, i.e. 0.0001
netted total exposure to a given currency. A position can be either flat or square (no exposure), long (more currency bought than sold), or short (more currency sold than bought).
Profit /Loss or "P/L"
the actual "realized" gain or loss resulting from trading activities on Closed Positions, plus the theoretical "unrealized" gain or loss on Open Positions that have been Mark-to-Market.
an indicative market price, normally used for information purposes only..
sustained rise in asset prices.
the price of one currency in terms of another, typically used for dealing purposes.
price level that, if reached, activates many sell triggers.
exposure to uncertain change, most often used with a negative connotation of adverse change.
simultaneous closing of an open position for today’s value date and the opening of the same position for the next day’s value date at a price reflecting the interest rate differential between the two currencies
Round trip
buying and selling of a specified amount of currency.
Short Position
an open position that aims to capture gains from currency depreciation.
Spot Price
current market price. Settlement of spot transactions usually occurs within two business days.
the difference between the bid and offer prices.
Stop Loss Order
order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor's position.
type of derivative in which two parties agree to exchange one stream of cash flows against another.
Take-Profit Order (T/P)
an order specifying the exact rate or number of pips from the current price point at which a current position should be closed, and gains will be locked in.
Technical Analysis
an effort to forecast prices by analyzing market data, i.e. historical price trends and averages, volumes etc.
smallest possible change in a price, either up or down. Also known as Pip.
buying or selling a currency pair.
current direction of the market, either up, down, or sideways.
a new price quote at a price higher than the preceding quote.
a statistical measure of a market's price movements over time.
return on an investment, usually expressed in percentage terms.