Glossary

A

ASK

The price at which a trader is willing to buy the trading instrument: share, bond, futures, currency, etc.

B

BALANCE

The ratio between the money available in the account and money engaged for making transactions.

BASE CURRENCY

The first currency in a pair. Quoted currency is bought for base currency. For example, in GBP/USD pair, the GBP is the base currency.

BEAR MARKET

"Bear market" its a term used when a market price have strong down trend.

BID

The price at which a trader is willing to sell the trading instrument: share, bond, futures, currency, etc.

BREAKOUT

Crossing by the price of a significant border (level of local maximum / minimum, psychological values, trend line).

BROKER

A company that grants access for individuals or companies to a stock exchange or international bank market. A broker charges a commission, wich usually depends from customer's transaction volume.

BULLS

"Bull" a trader who tries to rise market price up by opening a buy (long) positions.

BULLS MARKET

"Bull market" its a term used when a market price have strong rise trend.

C

CFD

A financial instrument allowing to profit off price change of an asset without holding it. Buying CFD, you buy price to an instrument, but not the instrument itself. Basic assets are shares, commodities, futures, indices.

CHART

A graphic representation of a trading instrument price over the past trading period and current price. On Forex usually use a japan candlesticks chart view.

CLEARANCE

Crossing of resistance or support level by the price.

CROSS CURRENCY

Relationship of two currencies to the third one, most often to the US dollar.

CURRENCY PAIR

A financial instrument in the Forex market. A currency pair consists of the base and counter currency. Main or major currency pairs on Forex: EURUSD, GBPUSD, USDCHF, USDJPY, USDCAD, AUDUSD, NZDUSD.

D

DIVERSIFICATION

Separate of capital between different assets with low risk levels to minimize risks and financial losses.

F

FALSE BREAKOUT

Short-term crossing of a certain conventional border by the price (level of support or resistance, trend line, etc.) with subsequent return and movement in the opposite direction.

FLAT

Little movement of a price value in some period of time. On charts flat looks like horozontal line.

FOREX

FOREX - its acronym from FOReign EXchange market. On this market traders deals trades with various financial instruments, like currencies, stocks, futures, commodities, etc.

FUNDAMENTAL ANALYSIS

A method for forecasting market movement based on analysis of economic data, political events and company reports.

G

GAP

A significant price spread between the closing price of the previous timeframe (time interval) and the open price of the next timeframe. Visually, on the chart, you will see a breach between figures/chart lines. Usually occurs  between fridays closing time and mondays opening time of trades.

H

HEDGE

Open positions on different markets / instruments for minimalize risk of capital loss.

I

INDICATOR

A common name of a mathematical tool in a technical analysis. Indicators are needed to analyze a chart and forecast future price movement.

INFLATION

An economic situation, when prices of goods and services in the country are growing, and purchasing power is falling.

INSTRUMENT

Financial document (stock, futures, option...) which trader can sell or buy to provide receive funds.

INTERVENTION

An impact of a national Central Bank in order to influence the exchange rate of the national currency, i.e. to weaken or strengthen it.

L

LEVERAGE

Relation between borrowed and own funds. It is expressed as 1:10, 1:100. Leverage 1:100 means that in order to carry out a transaction the minimal amount at the account shall be 1% of the operation volume.

LIQUIDITY

Option to easily sell or buy a financial asset at market price. High liquidity means high trade activity and volume.

LOCK

Opposite positions opened at the share dealing account  (buy or sell) for a single financial instrument of a certain volume.

LONG

Termin used when open a buy position on Forex market.

LOT

A unit measure of the volume of a financial instrument, standard value of a contract. Standard lot at Forex market is 100,000 units of the base currency.

M

MARGIN

Security deposit at the account upon which the broker provides a credit for performing trade operations.

MARGIN TRADE

Trading of market with credit money.

MECHANICAL TRADE SYSTEM

An automated system,where rules for carrying out transactions regulated by robot.

O

ORDER

An order of a trader to buy or sell a financial instrument. They distinguish a market order and a pending order. Market order — buy or sale oprration at a current price. Pending order — buy or sale operation at a price indicated by the trader.

OVERBOUGHT

A market situation in case of overgrowth of the asset price. It is followed by price reduction.

OVERSOLD

A market situation in case of too low fall of the asset price. It is followed by price growth.

P

POINT, PIP

A minimum change in currency rate. For the majority of currency pairs (EURUSD, GBPUSD, USDCHF) one point equals 0.0001, for USDJPY — 0.01.

PULLBACK

Change in price movement direction after its sustained growth or reduction, when market players believe that the reached price is too high or, vice versa, too low.

Q

COUNTER CURRENCY

The second currency in the pair. It is used when buying or selling the base currency. For example, in USD/EUR pair, euro is the counter currency.

QUOTE

It's a price value at a certain moment of time. Usually have 4-5 digits after the decimal point.

R

RANGE

The difference between the maximum and minimum price for a period of time.

RATE

Price of a certain currency expressed in another currency.

RESISTANCE

A level, reaching which price reduction is expected.

RISING TREND

The price growth of a trading instrument.

S

SALE PRICE

A price at which a trader sells a trading instrument.

SHORT

Termin used when trader open sell position.

SPREAD

A difference between buy and sale price expressed in points.

STOP LOSS

An instruction to the trading platform to automatically close the position, if the price comes close to a certain level. Stop loss is required to limit capital losses.

STOP OUT

A forced closure of client's positions by the broker, if acceptable level of losses is reached.

STORAGE

Payment for a swap of an unclosed position to the next day.

SUPPORT

A level, reaching which asset price growth is expected.

SWAP

Difference in credit interest rates for currencies used in trades. Its take place at open positions left for overnight.

T

TAKE PROFIT

An instruction to the trading platform to automatically close the position, if the price comes close to a certain level. Take Profit is required to lock in profits.

TECHNICAL ANALYSIS

Chart analysis method based on price development in the earlier periods. Besides, mathematical analysis methods are used.

TRADE ACCOUNT

An account, to which money is placed for performing trade operations.

TRADE CORRIDOR

A range, in which the price remains during trading.

TRADE OPERATION

Purchase or sale of asset in a certain volume at a pre-set price.

TRADE STRATEGY

A set of rules for making transactions.

TRADE TERMINAL

Software for receiving a flow of currency quotes, carrying out transactions and analysis of charts.

TRADER

A natural person or a legal entity carrying out transactions.

TRADING

Carrying out transactions at financial markets.

TREND

A steady trend (direction) in price movement. They distinguish an up and down trend — growth and fall of an asset price respectively.

TREND LINE

A straight line in the price chart, it reflects the current market direction — whether the asset price is growing or falling.

V

VOLATILITY

The variability of the exchange rate within a certain period of time.