Forex Vocabulary

Forex Vocabulary

Saucer bottoms are usually spotted on weekly or monthly charts that span several years. The longer they last, the more significant they become (cf. spikes). Sometimes after the violation of an up trendline, prices will decline a bit before rallying back to the bottom of the old up trendline . Often, previously broken support lines become resistance and resistance lines become support. The term “fan principle” derives from the appearance of the lines that gradually flatten out, resembling a fan.

The body of the small white candlestick is completely engulfed by the body of the long black candlestick. The presence of the long black candle at the third session which closes lower than the prior close, confirms the bearish reversal. ISM Non-manufacturing Index based on surveys of non-manufacturing firms’ within 60 industry sectors.

A choppy market is a market that moves sideways with no clear direction. Cash flow refers to the total sum of money that moves in and out of a business. CAD is the currency abbreviation that refers to the Canadian dollar, also known as the “loonie”. Brent Crude also known as Brent oil is a light-sweet crude oil blend drilled out of the North Sea. Its price is considered as a benchmark for other oil prices.

A private login area where a https://forexaggregator.com/r can manage all aspects of their trading environment. A series of parameters are required to fully define a Stop Loss Order, including the reference price, order amount, time period, and trigger. And make it possible for investors in different geographic locations to quickly and easily trade with each other. Trendlines are created by linking one strongly identifiable support to another or one strongly identifiable resistance to another. Based on the fibonacci sequence and the golden ratio, one can find resistance and support points using these. To use them, start the retracements at the lowest point in a graph and drag it up to the highest point, or vice versa.

Money Management

A graph that breaks down the movements of a particular currency that have occurred within a single trading day. Closing a position means bringing a transaction to an end, incurring any related profits or losses as a result. Within a currency pair, the first currency listed is known as the “base currency”. For example, when it comes to the GBP/USD pairing, the GBP functions as the base currency. “Asset” refers to an item or resource of value, such as a currency or currency pair. Find the approximate amount of currency units to buy or sell so you can control your maximum risk per position.

• The term “Bollinger Bands” refers to a technical analysis tool and a volatility indicator.
• “Asset” refers to an item or resource of value, such as a currency or currency pair.
• A pip is the fourth and final number after the decimal point (with the exception of Japanese yen-based currency pairs, which are displayed to only two decimal points).
• The lowest point a trader’s balance reaches below the Initial Deposit.

Can’t wrap your head around bulls, bears and abandoned babies? Our extensive glossary has you covered, with short and simple definitions for over 600 trading terms. Market Liquidity – a liquid market is a market in which there is relative frequently committed transaction of selling and buying.

Fixed costs definition

Common investment vehicles include stocks, bonds, commodities, and mutual funds. In an uptrend, two long white candles with a rising window in between are followed by a long black candle that fills the window (i.e. gap). It is a straight line connecting successively higher bottoms during an uptrend or successively lower tops during a downtrend. Trendlines are used to open long positions during an uptrend and short positions during a downtrend. On the other hand, violation of the trendline is an early warning for a reversal. In the course of a rally a long white candle reaffirms the positive sentiment in the market.

Generally it is defined as a medium through which assets are traded, with their value determined by supply and demand. Market capitalisation is the total market value of a company’s shares on the market. Market capitalisation is an easy way for investors to determine a company’s size, which can help to assess the risk of investing in its shares.

Reversal

A https://forexarena.net/ order entered by the client to close out a position, if the price moves in the opposite direction to the position by a certain amount of pips. In most cases, stop orders are executed as soon as the market reaches or goes through the stop-price level set by the client. Once issued, the stop order will be held pending until the stop price is reached. Stop orders may be used to close out a position , to reverse a position or to open a new position. Once the market hits or goes through the stop price, the order is activated and USG will execute the order at the next available price. Unlike a limit order, a stop order does not guarantee execution at the stop price.

Risk management → involves the use of strategies in order to control or reduce financial risk. An example is a stop-loss order which is used to minimise losses on a trade. Depreciation/devaluation → a decrease in the value of an exchange rate.

The smallest increment of market price movement possible in a given futures contract. The price half-way between the two prices, or the average of both buying and selling prices offered by the market makers. The margin is a returnable deposit required to be lodged by buyers and sellers with the clearing house to secure a new futures or options position. A pattern in price trends which chartist consider indicates a price trend reversal. The price has risen for some time, at the peak of the left shoulder, profit taking has caused the price to drop or level.

Wash Trading

It permits currencies to move in a measured fashion within agreed bands with respect to the ECU and consequently with each other. Only Germany and the Benelux are within the current narrow band. Speculators who take positions in commodities which are then liquidated prior to the close of the same trading day. Exchange rates against the ECU adopted for each currency within the EMS. Currencies have limited movement from the central rate according to the relevant band. Juxtaposition of the long and short term capital imports and exports of a country.

The goal of an SOR is to find the best way of executing a trade. In trading, a rollover is the process of keeping a position open beyond its expiry. The Regulatory News Service, or RNS, is responsible for disseminating regulatory and non-regulatory information on behalf of UK businesses and publicly listed companies. Operating as part of the London Stock Exchange , the RNS provides businesses with information that can help them to comply with their disclosure obligations. Risk management is the process of identifying potential risks in your investment portfolio, and taking steps to mitigate accordingly.

Simple Moving Average

Yield is the income earned from an investment, most often in the form of interest or dividend payments. Yield is one of the ways in which investments can earn a trader money, with the other being the eventual closing of a position for profit. A stock symbol is an abbreviation used to identify publicly traded companies. When a company decides to go public, it will select the exchange to list on and then choose a unique stock symbol to differentiate itself from other companies on the exchange. In finance, the spread is the difference in price between the buy and sell prices quoted for an asset. Shares are the units of the ownership of a company, usually traded on the stock market.

Cryptos can often be decentralized networks based on blockchain technology. Crude oil inventories refer to the stockpile of excess oil supply usually maintained by governments to keep in reserve. Inventories offer useful information on the commodity’s supply and demand, and they can affect its prices. Collateral is an asset a borrower offers a lender as loan security.

Also, the fourth https://trading-market.org/ and resistance levels play a key role in accelerating markets in both upward and downward directions. Just like Harami, a small candlestick body- follows a candlestick of a long black body. The bearish decline is running out of steam as shown by the presence of the Doji, which signals uncertainty as it is contained by the previous long body. The weakness of the bearish market to push prices lower and the presence of the pattern at the end of a decline, signals possible bullish implications.

Finally, a long black candle breaks below the pattern with a gap to complete the pattern. The first and second are black candles with a gap in between them. The third is a white candle that opens in the real body of the previous candle and closes within the gap without filling it completely. The first and second are long black candles with a gap in between them. The third is a white candle that opens in the real body of the previous candle and closes above the gap, filling it completely. The sum of trade , net factor income and net transfer payments .

In Japanese, it is called the ‘Ichimoku Kinko Hyo’ which roughly means ‘one look equilibrium chart’ – because with just one look, traders can receive a range of information. Moving Average Convergence Divergence is a momentum indicator that follows trends. MACD uses data from various moving averages and it is designed to identify changes in the momentum of an asset’s price. Investors use MACD to determine potential investment opportunities around support and resistance levels. Foreign Exchange refers to the exchange of one currency for another.

• The other entity or party with whom the exchange deal is being transacted.
• The risk that a customer goes bankrupt after entering into a forward contract.
• In that regard, they hold an opposite view to bulls, who believe that a market is going upwards.
• The contracted amounts are determined by the Foreign Exchange rate contracted to by the two parties.

A stock exchange is a centralised location where the shares of publicly traded companies are bought and sold. Stock exchanges differ from other exchanges because the tradable assets are limited to stocks, bonds and exchange traded products . A put option is a contract that gives the buyer the right but not the obligation to sell an asset at a specific price, at a specific date of expiry. The value of a put option increases if the asset’s market price depreciates.

A Technical Analysis tool where prices are trending downwards between two parallel lines. The basic trendline is drawn by connecting the tops of the price action and the channel which is parallel to it. The basic trendline may be used for opening sell positions in the direction of the downtrend. The channel line may serve as target for closing a short position. First, you must get the hang of the basics of foreign exchange.