Forex Glossary, Forex Terminology, Forex Trading Dictionary
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. A method used in Point and Figure charts to calculate price targets. It applies to both 1-box and 3-box reversal charts.
Gold (gold’s relationship) It is commonly accepted that gold moves in the opposite direction of the US dollar. The long-term correlation coefficient is largely negative, but shorter-term correlations are less reliable. Gold certificate A certificate of ownership that gold investors use to purchase and sell the commodity instead of dealing with transfer and storage of the physical gold itself.
Traders in the Spot Forex buy and sell lots. Currency pairs – A currency pair is, as the name suggests, a pair of currencies that represent the value of one currency against another. In forex trading, the changing value of a currency pair provides traders with the opportunity to make a profit. Currency pairs are expressed in a XXX/YYY format, such as EUR/USD.
If you buy a mini lot of EUR/USD at a 4 pip-spread, you’re actually paying the broker 40 pips. It forms at the end of a decline or near a support area. The market trades in the direction of the Bitcoin Trading established decline forming a long black candle, registering lower lows. The next session registers a matching low and eventually forms a bullish candlestick hence, pushing prices higher.
Economic report, released monthly, that measures the average amount of money consumers spend on durable goods, consumer products, and services excluding food and energy. A high reading is seen as bullish for the country’s currency whereas a low reading is bearish. Released by the Bureau of Economic Analysis, Department of Commerce. A reading above 50 is bullish for the US Dollar while a reading below 50 is bearish. Released monthly by ISM-Chicago Inc.
A derivative is a financial product that enables traders to speculate on the price movement of assets without purchasing the assets themselves. Because there is nothing physical being traded when derivative positions forex vocabulary are opened, they usually exist as a contract between two parties. A currency peg is a governmental policy of fixing the exchange rate of its currency to that of another currency, or occasionally to the gold price.
RBA Reserve Bank of Australia, the central bank of Australia. RBNZ Reserve Bank of New Zealand, the central bank of New Zealand.
Currency peg definition
Short position An investment position that benefits from a decline in market price. When the base currency in the pair is sold, the position is said to be short. Short squeeze A situation in which traders are heavily positioned on the short side and a market catalyst causes them to cover (buy) in a hurry, causing a sharp price increase. Shorts Traders who have sold, or shorted, a product, or those who are bearish on the market. Sidelines, sit on hands Traders staying out of the markets due to directionless, choppy or unclear market conditions are said to be on the sidelines or sitting on their hands.
HK50/HKHI Names for the Hong Kong Hang Seng index. You can make stop-loss orders with automated trading software. It’s a great thing because even if you’re https://forexbitcoin.info/ on holiday when you don’t watch how the market and currency rates change, the software does it for you. We will take the USD/CHF currency pair.
- It’s the difference between a 5-period simple moving average and a 34-period simple moving average, applied to bar’s mid-point prices (H-L)/ 2.
- Channels may be used to trigger buy/sell signals and calculate price targets.
- In our latest article, we look at the best technical indicators to use when day trading the markets.
- The pip is a unit – a numeric value that ultimately measures profit and loss.
- Past performance is not necessarily indicative of future results.
- A Japanese candlestick pattern signaling a bearish reversal.
The currency of Denmark, Greenland and the Faroe Islands. Trading based on the trader’s experience and intuition, to decide whether to take a trade or not, under the current market conditions. +DI (plus Directional Indicator) is paired with -DI (minus Directional Indicator) to generate buy/sell signals in the context of the Average Directional Movement Index (ADX).
Aussie Refers to the AUD/USD (Australian Dollar/U.S. Dollar) pair. A sophisticated software program that provides expert buy/sell recommendations for trading currencies on the foreign exchange markets. A Trading Model, based on its evaluation of historical analyses and forecasts and your trading profile, makes recommendations about currency positions.
Do not be surprised to see five figures after the decimal when you are looking at the price of most currency pairs on your trading platform. If you think of the exchange rate of the pound and the dollar (GBP/USD), you might think of it as say, 1.57, where only two units follow the decimal point. However, because the US dollar has become stronger and is denoted with the relationship to the euro as the second currency in the currency pair, the price of the EUR/USD decreases.
Pips are how traders generally measure their profit. If a trader buys a currency pair, again the GBP/USD at 1.5700, and the price moves up to 1.5730, it is said to have moved up by 30 pips or, the trade has gained a 30 pip profit. The price of the forex vocabulary EUR/USD is the exchange rate of how many units of the second currency in the pair is needed to buy a single unit of the first currency in the pair. So the exchange rate of 1.4 for the EUR/USD means that 1.4 dollars are needed to buy 1 euro.
Offsetting transaction A trade that cancels or offsets some or all of the market risk of an open position. On top Attempting to sell at the current market order price.
Forex Orders
Inflationary pressures typically show earlier than the headline retail. Working order Where a limit order has been requested but not yet filled. WSJ Acronym for The Wall Street Journal. Keep the powder dry To limit your trades due to inclement trading conditions. In either choppy or extremely narrow markets, it may be better to stay on the sidelines until a clear opportunity arises.
When the trader exits the market, they are said to have closed their position. A chart is the visual representation of the price action and you use this for your analysis.
It is often presented alongside price information, as it offers an extra dimension when examining an asset’s price history. A resistance level is a key tool in technical analysis, indicating when an asset has reached a price http://www.roadfreightnsw.com.au/kryptowaluty/ level that market participants are unwilling to surpass. A position is the expression of a market commitment, or exposure, held by a trader. Profit or loss on a position can only be realized once it has been closed.
Each box (i.e. X or O) represents a predefined price movement called the box size. Price movement less than the box size is ignored, thus noise is not recorded. A reversal, i.e. a column of X’s, is created after a column of O’s, when there is a price movement to the upside equal to the number of boxes – known as the reversal size. Point and figure charts are named after their box and reversal size, for example 1 x 3. During the course of a decline, a long white candlestick exceeds the midpoint of the previous long black candle.