Forex trading glossary

Forex Trading Glossary, FX Terminology, Currency Trading Terms


forex trading glossary

In the forex market, currencies are traded in pairs. When a trader buys a currency, he or she is selling another currency at the same time. Currency trading is the exchange of one type of currency for another. The forex market has no physical location or central exchange as it is a global, decentralized market and trades 24 hours a day, 5 days a week. Forex Trading Terminology. The Forex market comes with its very own set of terms and jargon. So, before you go any deeper into learning how to trade the Fx market, it’s important you understand some of the basic Forex terminology that you will encounter on your trading journey • Basic Forex terms. Forex Glossary. The following is a complete glossary of forex terms, which provides key definitions in the simplest way possible. Whether you’re a novice trader looking to learn the ropes or an experienced trader looking to brush up, the following forex glossary .

Forex Trading Terminology » Learn To Trade The Market

The most important terms related to Forex trading are presented in this glossary: ADX Average Directional Index A standard technical indicator that measures the strength of a trend. Ask Offer Price of the offer, forex trading glossary, the price you buy for. See a detailed guide on ATR.

Aussie A Forex slang name for the Australian dollar. Bank Rate The percentage rate at which central bank of a country lends money to the country's commercial banks. See central banks' interest rates table. Bid Price of the demand, forex trading glossary, the price you sell for. Broker The market participating body which serves as the middleman between retail traders and larger commercial institutions.

See the complete list of Forex brokers. US dollar. Carry Trade In Forex, holding a position with a positive overnight interest return in hope of gaining profits without closing the position in order to gain from the central banks interest rates difference, forex trading glossary. See the carry trade strategy. See the list of CFD brokers. Commission Broker commissions for operation handling.

EA Expert Advisor or Robot An automated script that is used by the trading platform software to manage positions and orders automatically without or with little manual control. See our free expert advisors for MetaTrader. ECN brokers do not discourage scalping, do not trade against the client, do not charge spread low spread is defined by the current market rates but instead charge commission for every executed order.

See the list of ECN brokers. Elliott Waves A set of principles for chart analysis based on 5-wave and 3-wave patterns. See our daily Elliott Wave analysis videos. Fibonacci Retracements Levels with a high probability of trend break or bounce, calculated as the See the Fibonacci calculator. Flat Square Neutral state when all your positions are closed.

Floating Leverage A leverage that changes depending on the total size of open positions. Fundamental Analysis The analysis based only on newseconomic indicators, and global events. Gap A difference between the previous period's close price and the next period's open price. See the gap trading strategy. GDP Gross Domestic Product A measure of the national income and output for the country's economy; it is one of the forex trading glossary important fundamental indicators in Forex.

The order is alive good until its execution or cancellation. Hedging Maintaining a market position which secures the existing open positions in the opposite direction. Jobber A slang word for a trader who is aimed toward fast but small and short-term profit from intraday trading. Jobber rarely leaves open positions overnight, forex trading glossary. Released monthly by the Conference Board. Limit Order An order for a broker to buy a lot for fixed or lesser price or sell a lot for fixed or better price.

Such price is called a limit price. Liquidity A measure of markets that describes relationship between the trading volume and the price change, forex trading glossary. Long A position which is in forex trading glossary Buy direction. In Forex, the primary currency when bought is long and another is short. Loss A loss from closing a long position at a lower rate than opening or from closing a short position with a higher rate than opening. Loss may also occur if the profit from a position's closing was lower than the broker's commission on it.

Lot A definite amount of units or amount of money accepted for operations handling usually, it is a multiple of Margin Money that the investor needs to keep at a broker's account to execute trades. Margin supplies the possible losses that may occur in margin trading. Margin Account An forex trading glossary that is used to hold investor's deposited money for trading.

Margin Call A broker's demand to deposit more margin money to the margin account forex trading glossary its size falls below a certain minimum.

Forex trading glossary Order An order to buy or sell a lot at a current market rate. Market Price A current rate, at which the currency is traded in the market. Martingale A position sizing strategy that involves doubling the bet after each loss.

See the Martingale trading system. Momentum A measure of the currency's ability to move in a given direction. Moving Average MA One of the most basic technical indicators, forex trading glossary. It shows the average rate calculated over a series of time periods. Open Position Trade A position on buying long or selling short of a currency pair. Order An order forex trading glossary a broker to buy or sell a currency at a certain rate.

Percentage Allocation Management Module PAMM A broker-side system that allows investors to invest with traders, and allows traders to manage investors' funds using the broker's platform.

See the list of brokers with PAMM brokers, forex trading glossary. See the pivot points calculator. Pip Point The last digit in a currency rate e. Profit Gain A positive amount of money gained for closing the position. Principal Value The initially invested amount of money. QE Quantitative Easing A monetary policy employed by central banks. It involves buying and holding the financial assets from the country's financial institutions to provide money supply and keep the prices of those financial assets from falling.

Resistance A price level where an uptrend stalls. Its breach can lead to a significant price rally. RSI Relative Strength Index A technical indicator that measures the power of a directional price movement by comparing the bullish and bearish portions of the trend.

Scalping A style of trading notable by a big number of positions that are opened for extremely small and short-term profits. See the scalping trading strategy, forex trading glossary. Settled Closed Position A closed position, forex trading glossary, for which all needed transactions have been made. Slippage Execution of an order at a rate different from expected ordered. The main reasons for slippage are "fast" market, low liquidity, and poor execution quality by broker, forex trading glossary.

Spread A difference between Ask and Bid rates of a currency pair. Standard Lotunits of the base currency of a currency pair you are buying or selling.

Stop-Limit Order An order to sell or buy a lot at a certain rate or worse after it first reaches some opposite price level. It is forex trading glossary combination of a stop-order and a limit-order. Stop-Loss Order An order to close a position when the market reaches a certain rate.

Normally, it is used to avoid extra losses when the market moves in the opposite direction. Sometimes, forex trading glossary, it can be used to lock in some amount of profit See Trailing Stop-Loss below. STP Straight Through Processing A type of order processing that does not require any manual intervention and is fully automatic. Support A price level where a downtrend stalls. Its breach can lead to a significant price decline. Swap An overnight payment for holding a position in Forex.

Since you are not physically receiving the currency you buy nor delivering the currency you sell, the broker should pay or charge an interest rate forex trading glossary between the pair's two currencies.

Swaps can be be negative or positive, forex trading glossary. Take-Profit Order An order to close a position when the market reaches a certain price. It is used to realize your profit.

Technical Analysis A analysis method based only on the technical market data rates, time, forex trading glossary, and volume with the help of various technical indicators.

Trailing Stop-Loss A stop-loss level that is moved closer to the current market rate as the position's loss decreases or its profit increases. See this post on using a trailing stop in MetaTrader 4. Trend A market's direction established under an influence of various factors, forex trading glossary.

Usable Margin Free Margin Amount of money in a margin account that can be forex trading glossary for trading, forex trading glossary. Used Margin Amount forex trading glossary money in a margin account already used to hold open positions. Volatility A statistical measure of the number of price changes for a given currency pair in a given period of time.

Forex traders use VPS to host trading platforms and run expert advisors without unexpected interruptions. See the list of Forex VPS providers, forex trading glossary.


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forex trading glossary


In the forex market, currencies are traded in pairs. When a trader buys a currency, he or she is selling another currency at the same time. Currency trading is the exchange of one type of currency for another. The forex market has no physical location or central exchange as it is a global, decentralized market and trades 24 hours a day, 5 days a week. Forex Glossary is a unique guide for the study of foreign currency trading and investing, with an extensive range of definitions, cross-references between related terms, informative sidelights, hyperlinked keywords and numerous examples. is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # ). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosure. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act.