Forex: glossary of technical terms

Forex Glossary: ??the list of definitions of the main technical terms in the financial field, in particular Forex.
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Forex Glossary : this page lists the definitions of the main technical terms in the financial sector, in particular Forex.

In alphabetical order, Forexinfo.it offers for free a glossary which contains all the main terms used in Forex – the currency market – and in financial markets in general.

It is an excellent basis to start with: often they take many things for granted, when in reality it is useful to start from the basics of the jargon and the glossary used in Forex, so as to easily understand articles and information videos.

If you notice the lack of some terms in our Forex glossary, don’t hesitate to give us your suggestions in the comments!

TO
Fundamental
analysis In-depth analysis of economic and commercial data with the aim of determining the future evolution of the financial markets.

T
Technical
analysis Analysis that strives to predict the future evolution of the market by examining market data in the form of graphs, course trends and volume.

B
Central bank
It is the main monetary authority of each nation, controlled by the central government. responsible for currency issuance, monetary policy, interest rates, and regulation and supervision of the private banking sector.

Base currency

Indeed, the Euro is the dominant base currency for Europe. As a result, currency exchange rates against the Euro will be identified as EUR / USD, EUR / GBP, EUR / CHF, EUR / JPY, EUR / CAD, etc. The British pound is the next base currency in the hierarchy used. The main pairs against the GBP are identified as GBP / USD, GBP / CHF, GBP / JPY, GBP / CAD.

Bear Market – Market in decline
Market in which prices drop rapidly, due to general pessimism (the opposite of the rising bull market).

Bid –
Price question that the buyer is ready to pay to buy; price offered for a currency.

Balance of payments
The recording of all transitions between a country and the rest of the world; it includes information both on the value of trade in goods and services and on the value of transfers.

Bull Market – Market on the rise
Market characterized by rising prices.

Breakeven Point – (BEP, breakeven point)
Unit of time or production volume at which the revenues derived from an investment equal the costs incurred.

Forex Broker
Intermediary that processes the purchase or sale instructions of the currencies of the investors and transmits them to the market, thus providing the service that allows the trading activity to be carried out physically.

C

Cable
Slang name attributed to the Pound / US Dollar cross.

Call Rate – Money Market
Rate Interbank day-to-day interest rate.

Cash flow Cash flow
generated by a cash company in a specific period of time, available for new investments or to remunerate the capital invested.

Cash Market – Market
for immediate purchase and sale of currencies.

Cross Rate – Cross rates
The exchange rates between two currencies generally obtained from the individual interest exchange rates of the two currencies measured against the US dollar.

Currency Risk – Exchange rate risk The
risk of suffering losses in the event of a reverse change in exchange rates.

Currency Swap – Change of currency
Contact which hires the two counterparties to change interest payment flows in different currencies for a period of time agreed upon and to change the principal futures in various currencies at a predetermined interest rate .

D
Day Trading
Open and close the position – or the same positions – in one meeting.

Public debt
The total value of outstanding debts contracted by the public administration.

Deflation
General decrease in the price level, that is negative inflation.

Devaluation – Devaluation A
decrease in the value of one currency compared to the value of the currency of another country. When a country devalues ??its currency, the goods that are imported become more expensive, while the goods that are exported are less expensive and therefore more competitive.

Dollar Rate –
Variable amount of a foreign currency quoted by a difference between the dollar regardless of the place of residence of the negotiator or the currency he wishes to invest. The only exception is the sterling / dollar (cable) exchange rate which is quoted in the form of a variable amount in dollars against sterling.

Dumping
The sale of goods by foreign companies at a price lower than the unit cost, or lower than the price charged in the country to which those companies belong.

IS
EMS – SME
Abbreviation for European monetary systems: agreed with the member countries of the European Union to maintain the alignment between the exchange rates of their respective currency.

F
Federal Reserve (Fed)
Central Bank of the United States.

Fixed Exchange Rate – Fixed exchange rates
.In practice, even fixed prices may be subject to fluctuations between previously established highs and lows, requiring appropriate intervention.

Flat / Square – Square
Position of balance. A book is balanced if a trade has no positions or all positions cancel each other out.

G

GTC – Valid until revoked
Order to a counterparty to buy or sell at a fixed price. This order is valid until it is canceled by the customer.

H

Hedging –
Practical hedging which consists in engaging in an investment activity in order to cover the losses of another, for example by selling as a hedge to balance a previous purchase or buy as a hedge to offset a sale made as a hedge. Although hedges reduce potential losses, they also tend to limit potential profits.

Hedge fund
Private investment fund , intended for investors with large capital (generally the minimum investment is $ 1 million) and specializes in high risk short term speculation. Hedge funds operate on bonds, currencies, stock options and derivatives.

High / Low – High / Low
Normally, the highest or lowest negotiated price for the underlying instrument during the current session.

Holding
Company that owns and manages investments in other companies for the purpose of controlling their activity or making profits.

Home Banking
Service that allows customers to connect to their bank via the Internet (therefore also from home, hence the name) and perform various operations from their PC, such as checking the bank account, paying bills, purchasing securities .

THE

If done
Type of correlation between orders; the execution of an order is conditional on the occurrence of another order.

Inflation
Increased general price level.

Interbank Interbank
market.

J
Joint Venture
Collaboration between two or more companies for the realization of a common project that involves the synergistic use of resources.

L
Financial
leverage Financial leverage is to manage a certain amount using a minimum capital investment. In other words, it could be said that exploiting leverage, in essence, means borrowing capital trusting in one’s ability to invest it obtaining a higher return. For example, using a capital of 10,000 euros with leverage of 10, gains or losses will be accounted for in the amount of 100,000 euros.
A movement on the chosen exchange rate, for example Euro / Dollar, equal to 1% will cause, by using a lever of 10, a variation of the investment equal to 10%.

Limit Order – Limited Course
Order Order to buy at a price lower than or equal to a specified sum or to sell at a price equal to or higher than a specified sum.

Long Position – Long
position Market position in which the customer purchased a currency that he did not previously own. Normally expressed according to the currency: «long on the dollar».

You will also be interested in: Forex, going short and long: definition and meaning

M
Margin
Clients must deposit funds as collateral to cover potential losses due to adverse course evolution.

Margin Call – Margin Call .
Application for additional funds. Condition imposed by a clearing house on a member (or clearing house on a client) to make a minimum deposit to cover an adverse movement in the market prices.

Initial Margin Initial
guarantee deposit required to access a position, and which serves as insurance for future executions.

Marubozu – Marubozu candles
Particular conformation on calndlestic graphics characterized by a single candle without “shadows” or “tails”.

OR
Offer – Offer
The price or rate at which a potential seller is ready to sell.

One Cancels Other Order (OCO Order) – One order cancels the other (Bivalent order)) Detailed
order in which the execution of one order order automatically cancels the other.

Open Position – Open position
Market that has not been settled by a material payment or has been reversed by another equal or opposite market for the same settlement date.

P
Pip
Term used on the foreign exchange market to represent the smallest possible increase for an exchange rate. According to the context, this value equals one base point (0.0001 in the case of EUR / USD, GBD / USD pairs, and 0.01 in the USD / JPY – EUR / JPY pairs).

R
Resistance
Threshold for which there is a tendency to sell, an obstacle that blocks the continuation of the rise on the graph.

Risk Capital – Capital at risk
Sum of money that a person can afford to invest and whose loss will not affect his standard of living.

Rollover – Reconversion
When the settlement of a transaction refers to another settlement date based on the differential interest rate of the two currencies.

S
Short – Hedging
selling Hedging means selling an instrument without actually owning it and holding a hedging position waiting for the price to fall so that the instrument can be bought later with profit.

Spot – Cash
Transaction Transaction carried out immediately although the funds generally change hands only in the two days following the conclusion of the market.

Spread
Difference between supply and demand (selling price); it is used to measure market liquidity. Limited rejects normally indicate great fluidity.

Stop Loss
Order to buy or sell on the market when the price reaches the established threshold, both below and above the price recorded at the time the order was issued.

T
Interbank rate
Exchange rates at which large international banks list other large international banks.

V
Value Date – Value date Value date of
a cash or deferred delivery contract.

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