外汇 Glossary
To increase your understanding of trading terminology, we have gathered the most important terms and definitions that you may encounter on your trading journey.
A
An Abandoned Baby is a Japanese candlestick pattern signalling a possible reversal. It consists of three candles. In a downtrend, a long red candle is followed by a Doji that gaps lower. The third candle has a long green body and gaps above the Doji's high.
An absolute drawdown is the reduction of one's capital after a series of losing trades to zero or a very low amount.
This refers to the history of all the closed trades on a specific account on the MT4 platform.
A technical Indicator developed by Mark Chaikin. Chartists can use this indicator to affirm a security's underlying trend or anticipate reversals when the indicator diverges from the security price.
Actionary Waves Theory is a method of market analysis that is based on the idea that the market forms the same types of patterns on a smaller timeframe that it does on a longer timeframe and that these patterns provide clues as to what might happen next in the market.
Estimated change of US employed people, excluding the farming and the government sector.
An Affiliate is a member of the BDSwiss' Partners' program. BDSwiss' Affiliates use their own online resources (websites, social media) to direct traffic to BDSwiss and receive a compensation for successful referrals.
The policy under which all futures positions owned or controlled by one Trader are combined to determine reportable positions and speculative P&L.
Algorithmic trading is the process of using computers for placing trades.
A technical Indicator designed by Dr. Bill Williams. It consists of 3 moving average lines: The Alligator's Jaw (blue line) is a 13-period Smoothed Moving Average shifted into the future, by 8 bars. The Alligator's Teeth (red line) is an 8-period Smoothed Moving Average shifted into the future by 5 bars. The Alligator's Lips (green line) is a 5-period Smoothed Moving Average shifted into the future by 3 bars.
The word "altcoin" is an abbreviation of "Bitcoin alternative," and thus describes every single cryptocurrency except for Bitcoin. Altcoins aim to replace or improve upon at least one Bitcoin component. The term has stuck among cryptocurrency traders and is still used to refer to lower cap cryptocurrencies.
A condition whereby the value of a financial instrument increases in response to the demand in the market.
The concurrent purchasing and selling of a financial asset at two separate prices in two separate markets, yielding profits with minimal risks
An upward sloping line connecting two or more bottoms.
Trading activity between 11:00 pm (GMT+2) and 08:00 am (GMT+2). About 20% of all transactions within a day occur during the Asian trading session.
The price at which a trader accepts to buy a security.
Also referred to as offer. It is the lowest price at which a seller agrees to sell a financial asset.
The underlying instrument essential for determining a futures contract (CFD). It can be a commodity, stock, currency pair, or index.
Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals and risk tolerance.
When a trade breaks even - the trader does not make any profit or loss.
The Average True Range is an indicator developed by Welles Wilder to measure volatility. Wilder believed that high ATR readings occur at bottoms after a strong downtrend characterized by "panic" sell-off. Low ATR readings are usually found at tops and during periods of consolidation.
An individual granted the mandate to trade in the financial markets on behalf of another trader.
Australian Dollar. The currency of Australia, Christmas Island, the Cocos (Keeling) Islands, Kiribati, Nauru, Norfolk Island and Tuvalu. It is subdivided into 100 cents.
Aussie is a slang term that is used to refer to the Australian dollar.
A financial entity that has been given the certification to engage in foreign currency transactions.
A computer program that submits orders to electronic exchanges based on a set of predefined instructions.
A change in the labour pay excluding the farming sector. Released monthly by the Bureau of Labor Statistics.
B
The amount of money in the account, excluding credit and the floating profit of currently open orders.
A systematic record that outlines a country's transactions with other countries within a particular period of time.
The difference in value between a country's exports and imports calculated within a certain period of time.
A Bank of Central Banks, based in Basel Switzerland. It facilitates collaboration among its members and serves Central Banks in their pursuit for global monetary and financial stability.
A bank rate is the interest rate at which a nation's central bank lends money to domestic banks, often in the form of very short-term loans.
The western technique for price charting, comprising of a vertical line representing the price range of a certain period.
Unit of volume used contract sizes for Brent, Crude Oil and other petroleum products. One barrel is equal to 42 US gallons.
The first currency in a pair is called the base currency. For example, in USD/JPY pair, USD is the base currency.
The interest rate that a Central Bank will charge for lending to commercial banks.
One percent of one percent. Usually used for changes in Interest Rates where references are less than one percent. 1bp = 0.0001.
A group of currencies normally used to manage the exchange rate of a currency.
A trader whose outlook on the market or a specific financial instrument is negative.
The close of the candlestick is lower than the open price, revealing negative sentiment.
A bear market is a financial market of a group of securities in which prices are declining.
The belief that the market or specific financial instrument will fall.
A subfield of finance that attempts to explain traders'/investors' decision making in the financial markets.
The price at which a trader is prepared to sell a financial instrument. The term is also used to refer to the selling price of a particular financial asset.
A decentralized digital currency used for peer-to-peer transactions. It was introduced in 2009 by a programmer using the name Satoshi Nakamoto. The number of bitcoins in circulation cannot exceed 21 million.
Blocks are fundamental to how blockchains and cryptocurrencies work. A block is simply a collection of data representing transactions that took place in a given period of time.
A blockchain is a digitized, decentralized, public ledger of all cryptocurrency transactions.
Shares of large and well-established organizations.
A technical indicator developed by John Bollinger. The upper band is drawn 2 standard deviations above a simple moving average and the lower band 2 standard deviations below the simple moving average. Bollinger Bands measure volatility and display price extremes.
A debt instrument, where the issuer borrows money from the buyer, with the obligation to repay the principal and predefined interest at the maturity date.
The annual interest divided by the value the bond was purchased.
A significant low on the price chart where buying pressure overcomes selling pressure.
A term used to describe when there is no overall profit or loss experienced in a transaction.
A five-candle bearish reversal formation. The first candle has a long green body trading in the direction of the uptrend, showing the bulls' strength. The second candle is also green, and of a regular size gaping above-reaffirming the upward move. The third and fourth candles have green bodies of regular size, higher than the previous close. Finally, a long red body is formed that closes in the gap created by the first two candlesticks.
A five-candle bullish reversal formation. The first candle has a long red body trading in the direction of the decline, showing off the bears' strength. The second candle is also red, and of a regular size gaping below-reaffirming the downward move. The third and fourth candles have red bodies of regular size, closing lower than the previous close. Finally, a long green body is formed that closes in the gap created by the first two candlesticks.
A breakaway gap represents a gap in the movement of a stock price supported by levels of high volume.
A type of sweet crude oil that is used as a benchmark for the prices of other crude oils.
A company or individual that executes buy and sell orders on behalf of financial and commercial institutions and/or the general public.
Number of building approvals released monthly by the Australian Bureau of Statistics.
The number of housing building permits approved in the previous month, released monthly by the Census Bureau.
The close of this candlestick is higher than the open price, revealing positive sentiment.
A bull market is a financial market of a group of securities in which prices are rising or are expected to rise.
A short-lived breakout above a top, triggering a buy entry. After the false breakout, prices switch direction.
The belief that the market or a specific financial instrument will rise.
Certain price formations that signal the end of a downtrend and the beginning of an uptrend.
Germany's Central Bank.
A unit of measurement for agricultural commodities.
A Monthly report outlining the relative level of current business conditions and expectations for the next 6 months.
A monthly report excluding January. It's a survey of the business outlook in the next 12 months.
A pending order to buy at a predefined price lower than the market price in anticipation that the market will eventually rise.
To place an order to own a financial instrument.
C
Cable is a slang term used among forex traders referring to the exchange rate between the U.S. dollar and the British pound sterling. This term supposedly derives from the advent of the telegraph in the mid-19th century. The pound was the dominant currency at the time, and transactions between the pound and dollar were executed via transatlantic cable.
Canadian Dollar. The currency of Canada. It is subdivided into 100 cents.
A monthly economic report, that is released by Markit and is based on a survey of about 400 purchasing managers in China. A reading above 50 indicates expansion of the manufacturing sector and the economy in general, whereas a reading below 50 indicates contraction.
A price charting method that originated in Japan in the 18th century. A standard Candlestick chart contains a series of multiple individual candlestick data points. Colour schemes are used to illustrate the real bodies of the candles, which is the difference between a lower close than the open (red) and a higher close than the open (green).
The capacity utilization rate measures the proportion of a country's resources used by manufacturers, mines and utilities. A high reading is positive for the country's currency whereas a low reading is negative. This report is released by the Federal Reserve.
Capital expenditures represent major investments of capital that a company makes to maintain or, more often, to expand its business and generate additional profits.
Capital gain is an increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.
The result of selling a capital asset at a lower price than the purchased price.
A charge for the storage of physical commodities.
The amount of money going into and out of a business.
The Consumer Confidence Index (CCI) is a monthly release from the Conference Board, a non-profit business group that is highly regarded by investors and the Federal Reserve. CCI is a distinctive indicator, formed from survey results of more than 5,000 households and designed to gauge the relative financial health, spending power and overall confidence of the average American consumer.
A moving average type where more weight is assigned to the middle of the period (time span). Used in cycle analysis.
A state's financial institution that oversees monetary policy and manages a state's currency, inflation and interest rates.
A Central Bank buys or sells its currency in the foreign exchange market in order to raise or lower the value of its currency in respect to another currency
A CFD is a financial derivative which allows traders to speculate on a number of assets without owning them. It is basically an agreement between an investor and an investment institution. When the agreement expires, the parties exchange the difference between the opening and the closing prices of a particular financial asset.
The US Commodity Futures Trading Commission was created in 1974 with the aim of fostering open, transparent, competitive, and financially sound markets.
A technical analysis tool, similar to the concept of a trendline. At times prices fluctuate between two parallel lines, the basic trendline and the channel or return line. Channels may be used to trigger buy/sell signals and calculate price targets.
A Graphical representation of price using a candlestick, bar or line chart.
An individual who uses charts or graphs of a security's historical prices or levels to forecast its future trends.
Swiss Franc. The currency of Switzerland and Liechtenstein. It is subdivided into 100 Rappen.
The Chicago Purchasing Managers' Index is a monthly survey where purchasing managers (in Illinois, Indiana and Michigan) are asked to rate employment, production, new orders, prices, supplier deliveries and inventories. A reading above 50 is bullish for the US Dollar while a reading below 50 is bearish. This report is released monthly by ISM-Chicago Inc.
A sideways market.
A monthly report that measures unemployment in the United Kingdom. Released by the United Kingdom's Office of National Statistics (ONS).
Funds in an account that are available for withdrawal or investment.
Part of the MT4 Trading Platform that allows traders to receive live incoming prices, open and manage orders, perform technical analysis, write, back test and optimize trading robots, and develop indicators and scripts.
When a position is closed, the transaction has been completed - whether the position was long or short, or whether it was profitable or incurred losses.
Otherwise known as closing price, this is the final rate that a security is traded at on a specific day, candle or timeframe.
The final price at the end of a period (i.e. timeframe).
Chinese Yuan Renminbi. The currency of the People's Republic of China. It is divided into 10 jiao and 100 fen.
An asset offered by the borrower to the lender to secure the loan.
An amount the trader is charged by the broker for facilitating a trade.
The US Commodity Futures Trading Commission was created in 1974 with the aim of fostering open, transparent, competitive, and financially sound markets.
A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type
The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. Changes in the CPI are used to assess price changes associated with the cost of living.
A US report that indicates the number of individuals on unemployment benefits. A high reading is negative for the US Dollar, whereas a low reading is positive. This report is released monthly by the US Department of Labour.
A board of trade designated by the CFTC to trade futures or options contracts on a particular commodity. Commonly used to mean any exchange on which futures are traded.
The principle of contrarian trading assumes that when the larger majority of traders agree on the direction of the market then they are usually wrong. A true contrarian will therefore trade in the opposite direction.
The tendency for prices of physical commodities and futures to approach one another, usually during the delivery month.
A US economic indicator used to measure inflation based on measurement of price movements of a representative shopping basket of goods and services, excluding food and energy. A high reading is positive for the country's currency whereas a low reading is bearish. Released monthly by the Bureau of Labour Statistics.
A US Monthly report that measures the change in the overall value of initial orders for manufactured goods except transportation items. Released by the Census Bureau.
U.S. aggregate retail sales excluding automobile and gasoline sales, which are excluded due to their volatility. The figures are released monthly by the U.S. Department of Commerce about two weeks after the end of the reference month. As consumer spending accounts for more than two-thirds of the U.S. economy, the core retail sales data is an important indicator about the health of the overall economy.
A temporary interruption of the prevailing trend in the opposite direction.
In Elliott Wave Theory, a corrective wave is a wave against the trend. Waves 2, 4 and a-b-c are considered corrective.
The average cost of a "basket" of products and services.
The second currency in a currency pair quotation. Also called quote currency.
To close out a short position by buying currency or securities that have been sold short.
Risk of loss that may arise on outstanding contracts should a counterparty default on its obligations.
The exchange rate between two currencies that do not involve the US Dollar.
Unrefined petroleum found in liquid form and composed mostly of hydrocarbons, organic compounds and small amounts of metal.
Crude Oil Inventories is a weekly report that measures the change in Crude Oil stocks (i.e. barrels). It includes domestic and Customs-cleared foreign crude oil stocks held at refineries, in pipelines, in lease tanks and in transit to refineries. The report is released by the Energy Information Administration.
Digital currency in which encryption is used to regulate the generation of units of currency. It operates independently of the traditional banking system. Bitcoin, Ethereum and Litecoin are among the most popular cryptocurrencies.
Currency is a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy.
Currency appreciation is an increase in the value of one currency in terms of another.
A currency pair is the quotation and pricing structure of the currencies traded in the forex market
A currency peg is a country or government's exchange-rate policy of attaching, or pegging, the central bank's rate of exchange to another country's currency.
A technical analysis tool that draws vertical lines at equal intervals on the price chart to forecast future cycles.
The independent public supervisory authority responsible for the supervision of the investment services market and transactions in transferable securities carried out in the Republic of Cyprus.
D
A graph that illustrates the intraday movements of a financial instrument.
Danish Krone. The currency of Denmark, Greenland and the Faroe Islands. It is subdivided into 100 øre.
Deutscher Aktien Index (German Stock Index) is an index of 30 large German company shares.
An order that if not executed expires automatically at the end of the trading session on the day it was entered.
The opening and closing of positions in the market on the same day without holding them overnight.
A state in which liabilities exceed the value of assets or losses exceed profits.
Deflation is a contraction in the supply of circulated money within an economy, and therefore the opposite of inflation. In times of deflation, the purchasing power of currency and wages are higher than they otherwise would have been.
A financial instrument, traded on or off an exchange, the price of which is directly dependent upon the value of one or more underlying securities, equity indices, debt instruments, commodities, other derivative instruments, or any agreed upon pricing index or arrangement.
A trading account which is funded with virtual money, giving the trader an opportunity to explore the markets and test the trading platform they're using before investing real money in a live trading account.
Depression is a severe and prolonged downturn in economic activity. In economics, a depression is commonly defined as an extreme recession that lasts two or more years.
Depreciation can refer to a fall in the valve of a currency due to markets forces rather than to official action.
The number of open buy and sell orders placed for a financial instrument at varying prices.
The exchange rate of a currency pair expressed in terms of the foreign currency for 1 unit of domestic currency.
A financial contract whose worth relies upon or is derived from the performance of one or more underlying assets. Examples of underlying assets are stocks, bonds, commodities and indices.
Trading based on the trader's experience and intuition, to decide whether to take a trade or not, under the current market conditions.
The interest rate charged on loans by the Federal Reserve to member banks
An arrangement by which the owner of the account gives written power of attorney to someone else, usually the broker or a Commodity Trading Advisor, to buy and sell without prior approval of the account owner. Also referred to as a Managed Account.
In technical analysis, traders make transaction decisions by identifying situations of divergence, where the price of a stock and a set of relevant indicators are moving in opposite directions.
A portion of a company's profits paid to every shareholder.
A stock market index composed of 30 stocks of large American companies. It's based on Charles Dow's 1884 stock market average composed of nine railroad and two manufacturing companies. The index grew to include 30 stocks by the year 1928. It is used to gauge stock market activity and the country's economic health.
Danish Krone. The currency of Denmark, Greenland and the Faroe Islands. It is subdivided into 100 øre.
A Japanese candlestick formation that has equal (or almost equal) opening and closing price. A Doji looks like a cross, inverted cross or plus sign and signals indecision.
A technical analysis reversal price pattern. After an established downtrend, the last bottom fails to move lower than the previous bottom and prices rise above the last top.
A technical analysis reversal price pattern. After an established uptrend, the last top fails to exceed the previous top and prices fall below the last bottom.
This term refers to the tone of language that policy makers use when referring to inflation. For example, a dovish statement implies that no drastic measures may be taken to raise interest rates.
A stock market index composed of 30 stocks of large American companies. It's based on Charles Dow's 1884 stock market average composed of nine railroad and two manufacturing companies. The index grew to include 30 stocks by the year 1928. It is used to gauge stock market activity and the country's economic health.
The Dow Theory is an approach to trading developed by Charles H. Dow, who with Edward Jones and Charles Bergstresser founded Dow Jones & Company Inc. and developed the Dow Jones Industrial Average.
A Technical Analysis tool where prices are trending downwards between two parallel lines.
When the value of an investment drops, the length between its peak and its low is called the drawdown.
Consumer products such as house appliances, devices and equipment that usually last more than 3 years.
An economic indicator released monthly by the Bureau of Census that reflects new orders placed with domestic manufacturers for delivery of factory hard goods (durable goods) in the near term or future. Durable goods orders come in two releases per month: the advance report on durable goods and the manufacturers' shipments, inventories and orders.
E
The fraction of an organization's earnings apportioned to every outstanding share of common stock.
A modest decline in price.
An attempt to summarize the effects on a country's trade balance of its currency's changes against other currencies.
The Elliott Wave Theory is the theory named after Ralph Nelson Elliott, who concluded that the movement of the stock market could be predicted by observing and identifying a repetitive pattern of waves.
A brokerage firm that employs electronic communication networks (ECNs) to provide its clients direct access to other participants in the currency markets.
An order placed electronically (without the use of a broker) either via the Internet or an electronic trading system.
Systems that allow participating exchanges to list their products for trading electronically.
1) In the context of margin trading, the value of securities in a margin account minus what has been borrowed from the brokerage.
2) A stock or any other security representing an ownership interest. This may be in a private company (not publicly traded), in which case it is called private equity.
2) A stock or any other security representing an ownership interest. This may be in a private company (not publicly traded), in which case it is called private equity.
The rate at which one currency can be exchanged for another.
An ETF, or exchange-traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange.
When a trade is carried out and completed.
A script that enables the analytical and trading processes in the trading platform to be carried out with little or no manual control.
Also called expiration. It's the time and date when a trade of a financial instrument expires.
This refers to the amount invested in a security and exposed to market risk.
F
A reversal pattern. During the course of an uptrend as defined by successively higher tops and higher bottoms, the last top fails to exceed the previous top and prices fall below the last bottom.
The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve Board that determines the direction of monetary policy for the U.S.
The Federal Reserve Bank is the central bank of the United States and arguably the most powerful financial institution in the world. The Federal Reserve Bank was founded by the U.S. Congress in 1913 to provide the nation with a safe, flexible, and stable monetary and financial system.
After each regular meeting, the FOMC issues a statement that summarizes the Committee's economic outlook and the policy decision at that meeting.
A popular tool used by technical analysts to identify potential support and resistance levels based on some key numbers. These numbers possess a number of interrelationships, such as the fact that any given number is approximately 1.618 times the preceding number.
An infinite series of numbers such that any number in the series is the sum of the preceding two numbers. The sequence is: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233 etc.
It is a technical analysis tool attached from bottom to top in a rising market and from top to bottom in a declining market. The horizontal lines show the Fibonacci Retracement levels (ratios): 0.236, 0.382 and 0.618.
The process of executing an order on the trading platform.
When an investor has a very specific price they want to carry out a transaction at, they place a Fill or Kill order - this means that if the order is not filled at the desired price, it is terminated, or killed.
Any type of a tradable asset. Examples include currencies, futures, options, and CFDs.
A situation whereby a trader does not have any running positions in the market.
When an exchange rate is not fixed, but adjusts depending on the supply and demand for a particular currency relative to other currencies.
An individual who is a member of an exchange and trades for his own account on the floor of the exchange.
The federal funds rate is the rate at which depository institutions (banks) lend reserve balances to other banks on an overnight basis.
Minutes of the most recent meeting giving insights of the future of the US interest rate. Released eight times per year by the Federal Reserve.
The Force Index is an oscillator that fluctuates above and below zero. It combines price movement and volume to assess the force behind price movements and spot potential trend changes.
The forex market is the market in which participants can buy, sell, exchange, and speculate on currencies.
A digital chart that plots the price movements of currency pairs, to help investors make informed trading decisions.
Forex scalping is a trading strategy used by forex traders to buy or sell a currency pair and then hold it for a short period of time in an attempt to make a profit.
The currency of Hungary. It is subdivided into 100 filler.
A forward rate is an interest rate applicable to a financial transaction that will take place in the future.
Developed by Bill Williams, fractals are a type of pattern used in technical analysis to predict a reversal in the current trend. A fractal pattern consists of five bars.
Fundamental analysis is a method of evaluating a security in an attempt to measure its intrinsic value, by examining related economic, financial and other qualitative and quantitative factors.
A futures contract is a legal agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.
G
A group of 20 countries represented at the highest level by heads of state/government and at the ministerial level by ministers of finance and central banks governors.
A gap is a break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between.
Pound Sterling. The currency of United Kingdom of Great Britain and Northern Ireland, Guernsey, Isle of Man, Jersey. It is subdivided into 100 pence.
Gross domestic product (GDP) is the total value of goods and services a country produces in a one year period. GDP is calculated annually but it can also be calculated quarterly.
An estimate of the Manufacturing Purchasing Managers' Index (PMI) for a country based on about 85% of total PMI survey responses each month. It is intended to provide an accurate advance indication of the final PMI data.
Monthly survey looking at the current economic conditions and future outlook for the next 6 months. It is released monthly by the Ifo Institute for Economic Research.
German Retail Sales measures the change in the total value of inflation-adjusted sales at the retail level, excluding automobiles and gas stations. It is the primary indicator of consumer spending, which accounts for the majority of economic activity. A higher than expected reading is considered positive/bullish for the EUR, while a lower than expected reading can be taken as negative/bearish for the EUR.
The German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment Index gauges the six-month economic outlook. A level above zero indicates optimism
below indicates pessimism.
below indicates pessimism.
To buy a financial instrument with the expectation that it will rise in price.
To sell a financial instrument with the expectation that it will decline in price.
A bullish term used when one or more shorter term moving average cross above a longer term moving average
generally generates a buy signal
generally generates a buy signal
A pending order that remains in effect until it is executed or cancelled by the trader.
The goods trade balance is the difference in value between imported and exported goods during the reported month. A positive number (i.e. more exports than imports) is good for the currency.
It's an MT4/MT5 chart property. When selected, grid is shown on the price chart.
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Though GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well.
The monetary sum of all unprofitable trades.
Gross national product (GNP) is an estimate of total value of all the final products and services produced in a given period by the means of production owned by a country's residents. GNP is commonly calculated by taking the sum of personal consumption expenditures, private domestic investment, government expenditure, net exports, and any income earned by residents from overseas investments, minus income earned within the domestic economy by foreign residents.
The monetary sum of all profitable trades.
H
The Halifax House Price Index measures the change in the house prices throughout the UK. It is released monthly by the Halifax Bank of Scotland as an annualized change.
A Hammer is a Japanese candlestick pattern signalling a bullish reversal. The presence of a hammer at the end of a downtrend or decline alerts for a possible bullish reversal.
A two-candle candlestick pattern that can been seen to mark tops and bottoms. The second candle of this formation is contained within real body of the prior session's candle.
Any one of the major world currencies that is well traded and easily converted into other currencies.
The term "hawkish" refers to the tone of language that policy makers use when referring to inflation. For example, a hawkish statement implies that drastic measures may be taken to raise interest rates.
In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. It consists of three tops and two bottoms. The highest top is known as the Head where the top to the left is known as the Left Shoulder and the top to the right is known as the Right Shoulder.
Hedging involves placing two opposing investments to minimize the losses which could be incurred by price fluctuations.
Automated trading, placing a big number of trades on high volumes and speed.
The highest price that a financial instrument is traded during a specific timeframe.
Hong Kong Dollar. The currency of Hong Kong. It is subdivided into 100 cents.
Housing starts are the number of new residential construction projects that have begun during any particular month. Housing start statistics are released on or around the 17th of each month by the U.S. Commerce Department. The report includes building permits, housing starts and housing completions data.
I
A technical indicator that is used to gauge momentum along with future areas of support and resistance. The Ichimoku indicator is comprised of five lines called the tenkan-sen, kijun-sen, senkou span A, senkou span B and chickou span. This indicator was developed so that a trader can gauge an asset's trend, momentum and support and resistance points without the need of any other technical indicator.
The International Monetary Fund, or IMF, promotes international financial stability and monetary cooperation. It also facilitates international trade, promotes employment, sustainable economic growth, and helps to reduce global poverty. The IMF is governed by and accountable to its 189 member countries.
Implied volatility is the estimated volatility of a security's price. In general, implied volatility increases when the market is bearish, when investors believe that the asset's price will decline over time, and decreases when the market is bullish, when investors believe that the price will rise over time.
In Elliott Wave Theory, these waves move in the direction of the wave of one larger degree.
A market index is an aggregate value produced by combining several stocks or other investment vehicles together and expressing their total values against a base value from a specific date. Market indexes are intended to represent an entire stock market and thus track the market's changes over time.
Indicators are statistics used to measure current conditions as well as to forecast financial or economic trends.
Foreign Exchange Rate quoted for 1 unit of the foreign currency.
Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly.
The amount a futures market participant must deposit into a margin account at the time an order is placed to buy or sell a Forex or CFDs.
Interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
A technical analysis methodology that examines the correlations between four major asset classes: stocks, bonds, commodities, and currencies.
In Time Cycles analysis, Intermediate Cycles last from several weeks to several months. Identification of Intermediate Cycles may be performed by measuring the time interval between the cycle's troughs (lows) on the X-axis of the price chart.
In Dow Theory, an Intermediate Trend is a correction of the Major Trend. It usually lasts 3 weeks to 3 months.
It runs through the price action, connecting internal tops and bottoms rather than extreme lows (uptrendline) or extreme highs (downtrendline).
The International Monetary Fund, or IMF, promotes international financial stability and monetary cooperation. It also facilitates international trade, promotes employment, sustainable economic growth, and helps to reduce global poverty. The IMF is governed by and accountable to its 189 member countries.
Intraday is another way of saying "within the day." Intraday price movements are particularly important to short-term traders looking to make many trades over the course of a single trading session.
A monthly survey in which purchasing managers are asked to rate business activity in the manufacturing sector and more specifically, production, employment, new orders, prices, supplier deliveries and inventories. A reading above 50 is considered a bullish signal for the US Dollar, while a reading below 50 is bearish. Released monthly by the Institute of Supply Management.
The Institute of Supply Management (ISM) Non-Manufacturing Purchasing Managers' Index (PMI) is a composite index calculated as an indicator of the overall economic condition for the non-manufacturing sector.
J
This is the theory that if the stock market ends higher in January, the rest of the year will also end higher. Conversely, if January ends on a low note, stock prices will be lower for the end of the year.
A charting method that has gained a lot of popularity recently, because the charts are more visually appealing than other bar charts. They are also generally easier to read and interpret.
It is the currency of Japan, which is the third most-traded currency in the forex market.
A survey done by the United States Bureau of Labour Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month. The JOLTS data is published monthly and by region and industry.
K
One of the longer cycles in Time Cycle Analysis, discovered by the Russian Economist Nikolai D. Kondratieff. He supported that a cycle of approximately 54 years is present in prices and many areas of economic activities.
An order that is to be cancelled (that is to say "killed") if it cannot be wholly filled in the market.
One of the popular cycles in Time Cycle Analysis. Discovered by Joseph Kitchin. He supported that a 40-month cycle was present in the stock markets.
The slang term for the New Zealand Dollar.
L
Labour productivity is a measure of economic growth within a country. Labour productivity measures the amount of goods and services produced by one hour of labour
specifically, labour productivity measures the amount of real gross domestic product (GDP) produced by an hour of labour. Growth in labour productivity depends on three main factors: investment and saving in physical capital, new technology, and human capital.
specifically, labour productivity measures the amount of real gross domestic product (GDP) produced by an hour of labour. Growth in labour productivity depends on three main factors: investment and saving in physical capital, new technology, and human capital.
In the financial markets, latency refers to time units (usually milliseconds) required for a trade order to be sent and executed by the broker's server.
Leverage in trading simply refers to the ability to increase the size of your trade or investment by using credit from a broker. When trading using leverage, you are effectively borrowing from your broker, while the funds in your account act as collateral. The use of leverage in trading magnifies both gains and losses. Leverage is expressed as a ratio form, so if it is 1:100 for example, a trader's buying power is magnified by 100 times.
A limit order is a take-profit order to buy or sell a set amount of a financial instrument at a specified price or better
because a limit order is not a market order, it may not be executed if the price set by the investor cannot be met during the period of time in which the order is left open.
because a limit order is not a market order, it may not be executed if the price set by the investor cannot be met during the period of time in which the order is left open.
A price chart that uses only the closing price for each period. A line connects all closing prices on the chart. Extra information such as open, high and low prices are sacrificed for simplicity.
A Technical Analysis tool used for trend identification for a set of prices under a period of study. It is attached on the chart by selecting the first price representing the beginning of the trend and then dragging the mouse to the second price in the direction of the trend.
A Technical Analysis tool used for trend identification for a set of prices under a period of study. It is attached on the chart by selecting the first price representing the beginning of the trend and then dragging the mouse to the second price in the direction of the trend.
A decentralized digital currency used for peer-to-peer transactions. A total of 84 million litecoins are scheduled to be put into circulation.
The act of opening a buy position in the market
Taking a long position on a currency means that you buy it. In a currency pair, you buy the first of the two currencies - the base currency.
The nickname of the Canadian Dollar (CAD).
A lot is a standardized quantity of the instrument you are trading. In forex, one lot equals 100,000 units of the base currency.
The lowest price that a financial instrument is traded during a specific timeframe.
M
A set minimum amount (per outstanding futures contract) that a customer must maintain in his margin account to retain any open positions. Maintenance margin is also referred to as "minimum maintenance" or "maintenance requirement."
An action whereby a dealer stands by ready, willing and able to buy or sell a particular security at the quoted bid and ask price
The regular intervention of the monetary authorities in the market to stabilize the rates or aim the exchange rate in required direction
An amount of money deposited by traders to ensure performance of their orders. It is basically the amount of deposit needed to ensure the running positions in the market are kept active.
A margin call is a broker's demand on an investor using margin to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin. This is a notification which alerts you that you need to deposit more money in your trading account so there can be sufficient margin to keep existing positions open.
An investor makes a market order through a broker or brokerage service to buy or sell an investment immediately at the best available current price.
The current quote for a currency pair.
The likelihood that a trader will incur losses when the market conditions do not behave as initially expected.
A micro lot is equal to 1,000 units of the base currency in a currency pair.
The study economic activity as it applies to individual firms or well-defined small groups of individual or economics sectors. Microeconomics shows how and why different goods have different values, how individuals make more efficient or more productive decisions, and how individuals best coordinate and cooperate with one another.
The measure of the rate of change in prices.
Moving averages come in various forms, but their underlying purpose remains the same: to help technical traders track the trends of financial assets by smoothing out the day-to-day price fluctuations, or noise.
Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.
N
A global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy and transparent system, and commenced operations on February 8, 1971.
An increase or decrease in net asset value exclusive of additions, withdrawals and redemptions.
An economic indicator that measures sales of newly built homes. Released by the U.S. Department of Commerce's Census Bureau, it includes both quantity and price statistics. It is considered to be a lagging indicator of demand in the market and to affect mortgage rates.
The New York Stock Exchange (NYSE) is a stock exchange based in New York City that is considered the largest equities-based exchange in the world, based on total market capitalization of its listed securities. Formerly run as a private organization, the NYSE became a public entity in 2005 following the acquisition of electronic trading exchange Archipelago.
New Zealand Dollar. The currency of New Zealand, the Cook Islands, Niue, Pitcairn and Tokelau. It is subdivided into 100 cents.
A tab in the Terminal (MT4) listing all News by Subject, Category and incoming Time.
Nonfarm payroll is a term used in the U.S. to refer to any job with the exception of farm work, unincorporated self-employment, and employment by private households, the military and intelligence agencies. Proprietors are also excluded. The U.S. Bureau of Labour Statistics releases closely-followed monthly data on nonfarm payrolls as part of its Employment Situation Report. The headline figure, the change in the total number of nonfarm payrolls compared to the previous month, is used as a gauge of economic health.
Nikkei is short for Japan's Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index comprised of Japan's top 225 blue-chip companies traded on the Tokyo Stock Exchange. The Nikkei is equivalent to the Dow Jones Industrial Average Index in the United States.
When traders have direct access to the interbank market and there is no dealing desk involved in their transactions.
Random price movement. In a broad analytical context, noise refers to information or activity that confuses or misrepresents genuine underlying trends.
Also known as face value or par value. It is the price shown on the face of a financial instrument.
The currency of Norway and Bouvet Island. It is subdivided into 100 ore.
O
The Organization of Petroleum Exporting Countries (OPEC) is a group consisting of 12 of the world's major oil-exporting nations. OPEC was founded in 1960 to coordinate the petroleum policies of its members, and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made "at the open."
A position taken on a financial instrument that is subject to profits or losses.
The initial price at the beginning of a trading period (i.e. timeframe).
An order that is running in the market until the trader chooses to close it.
The range of prices at which buy and sell transactions took place during the opening of the market.
The unrealized gain or loss on open positions.
An oscillator is a technical analysis tool that is banded between two extreme values and built with the results from a trend indicator for discovering short-term overbought or oversold conditions. As the value of the oscillator approaches the upper extreme value, the asset is deemed to be overbought, and as it approaches the lower extreme, it is deemed to be oversold.
The traditional way of trading forex was âover the counter', meaning traders made forex transactions over the telephone or on electronic devices.
A phrase that is used to illustrate a loss in a trade.
A trading position that continues to run until the next trading day.
The dangerous habit of engaging in uncouth and excessive trading practices without carrying out appropriate due diligence.
When the market rises too far oscillators will reflect that rise with extreme high readings above the middle/equilibrium line, hence identifying overbought conditions. An oscillator at extreme high conditions can be an alert for a reversal. Oscillators usually give false signals in the beginning of a trend as they move too fast in the overbought area.
The Condition of a specific move when the market price has fallen and is in a position for corrective rally or a period of consolidation: the opposite of overbought.
P
The amount of money earned from a successful trade.
A pip is the smallest price move that a given exchange rate makes based on market convention. 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 1/100 of 1%, or one basis point. For example, the smallest move that the USD/CAD currency pair can make is $0.0001, or one basis point.
for most pairs, this is the equivalent of 1/100 of 1%, or one basis point. For example, the smallest move that the USD/CAD currency pair can make is $0.0001, or one basis point.
The mathematical calculation formula used to determine the support or resistance ranges in given time period. These formulas can be used to calculate intraday, daily, weekly, monthly, or quarterly range.
The area on the trading floor where trading in futures or options contracts is conducted by open outcry. Also referred to as a ring.
A trading platform is a software through which investors and traders can open, close and manage market positions through a financial intermediary.
A commitment, either long or short, in the market. A position can be profitable or unprofitable, depending on market movements.
The highest number of CFDs or forex (units) an investor is allowed to hold on one underlying security.
The initial capital that an individual invests for trading in the financial markets.
An index that shows the cost of goods and services to producers and wholesalers.
Closing a position to make a profit.
Pump and dump schemes are a type of market manipulation in which an asset is bought up in order to raise its price. The rise in value attracts other traders wanting to benefit from the move, who also buy in, raising the price even more. Eventually the perpetrators of the scheme dump their holdings at the new inflated price.
Q
Quantitative easing is an unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.
The second currency in a currency pair quotation. Also called counter currency. This reflects the value of one unit of the first currency in the pair (Base Currency).
R
The difference between the high and low price of a commodity during a given trading session, week, month, year, etc.
The price of one currency compared to another one. Also referred to as the exchange rate.
The relative strength index (RSI) is a momentum indicator developed by noted technical analyst Welles Wilder that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security. It is primarily used to attempt to identify overbought or oversold conditions in the trading of an asset.
The date on which foreign exchanges contracts settle.
Resistance or resistance level is a price point on a bar chart for a security in which upward price movement is impeded by an overwhelming level of supply for the security that accumulates at a particular price level. Resistance levels are characteristically found at the upper levels of range bound markets
The amount of cash that an individual is ready to invest in the financial markets.
In the trading world, risk management is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions. Essentially, risk management occurs any time an investor or fund manager analyses and attempts to quantify the potential for losses in an investment and then takes the appropriate action (or inaction) given his investment objectives and risk tolerance.
S
A trading strategy that involves opening and closing short-term positions with the intention of making accumulated profits.
A security is a fungible, negotiable financial instrument that holds some type of monetary value. For BDSwiss traders, the term security is used to refer to an ownership position in a publicly-traded corporation (via stocks.
A special account used to hold and separate customers' assets for trading on futures exchanges from those of the broker or firm. Also referred to as Customer Segregated Funds.
Rate at which a bank is willing to sell foreign currency.Rate at which a bank is willing to sell foreign currency.
The last price paid for a futures contract on any trading day. Settlement prices are used to determine open trade equity, margin calls and invoice prices for deliveries. Also referred to as Closing Price.
The candle that forms at tops of markets where the shadow is at least twice the length of the real body and the real body forms near the low for the session with little or no shadow at the bottom. This candle resembles an inverted hammer.
The position in a futures market where a trader sells a contract with the intention of buying it back at a lower price for a profit or if at a higher price for a loss.
Slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Slippage often occurs during periods of higher volatility when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade.
A speculator is a person who trades derivatives, commodities, bonds, equities or currencies with a higher -than-average risk in return for a higher-than-average profit potential.
Usually refers to a cash market for a physical commodity where the parties generally expect immediate delivery of the actual commodity.
The difference between the ask price and the bid price of a financial instrument.
A sudden upward or downward movement in price that happens in a short time period.
The stochastic oscillator is a momentum indicator comparing the closing price of a security to the range of its prices over a certain period of time. The sensitivity of the oscillator to market movements is reducible by adjusting that time period or by taking a moving average of the result.
Representation of a share in the ownership of a company that is available for trading on the financial markets.
An order designed to limit an investor's loss by buying (or selling) a financial instrument once its price sails above (or falls below) a certain stop price. These orders are placed to limit loss on a position.
Support or support level refers to the price level below which, historically, a stock has had difficulty falling.
T
An order placed to close a position once it hits a specific price
Technical analysis is a trading tool employed to evaluate securities and attempt to forecast their future movement by analysing statistics gathered from trading activity, such as price movement and volume. Unlike fundamental analysts who attempt to evaluate a security's intrinsic value, technical analysts focus on charts of price movement and various analytical tools to evaluate a security's strength or weakness and forecast future price changes.
The smallest increment of price movement for a futures contract. Also referred to as Minimum Price Fluctuation.
A candlestick pattern consisting of three red candles that close on or at their lows. After an extended advance, this formation can be a strong reversal pattern.
A candlestick pattern consisting of three candles that close at their highs and can indicate a continued advance. This pattern is a reliable indication that prices are moving higher, especially if they develop after a longer period of consolidation at a bottom
opposite of three crow's formation.
opposite of three crow's formation.
An investor engaging in transactions in the financial markets.
A unique type of stop loss order useful for locking profits on winning trades.
The date upon which the trading of a financial instrument takes place.
The difference between a country's exports and imports. More exports than imports result in a trade surplus. If there are more imports than exports, it results in a trade deficit.
U
Undervalued is a financial term referring to a security or other type of investment that is selling for a price presumed to be below the investment's true intrinsic value.
The specific futures contract that the option conveys the right to buy (in case of a call) or sell (in the case of a put).
The percentage of people within the labour force who are considered to be without jobs.
V
Additional amount of money needed by a broker to make up for losses when the balance drops below the required minimum level due to adverse price movements.
A measure of the rate of fluctuation of the price of a financial instrument over a period of time. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.
The number of purchases and sales of futures contracts made during a specified period of time, often the total transactions for one trading day.
W
A wallet is simply somewhere that you can keep your cryptocurrency holdings.
The electronic transfer of money from one financial institution to another.
A day on which the banks in a currency's principal financial centre are open for business.
Z
The currency symbol of the South African Rand.
