Forex Glossary

Forex Glossary / Key Terms

Forex trading is a tough business. It is hard to make successful trades and to know about the strategies, forums, and data. However, unconsciousness for the terminologies that the Forex utilizes is also a hindrance to successful trading. We thought it necessary to make content on forex glossary for our readers. This article will help you to know about the key terms used in the forex market with their proper definition.

What is Forex Glossary?

A forex glossary is dictionary that contains the terminologies or code words that are related to forex market or trading.

Our Glossary

To help you understand better, here we are with the terminologies. This forex glossary contains all the letters. 

A

Absolute Advantage

The factors that enable a country to reduce its production cost against its market competitors is an Absolute advantage. Those factors are population, economic conditions, weather conditions, and labor costs.

Acquisition

When a company wants to buy another company and takes control of it is an acquisition.

Account

An account is the portfolio of identity via which he/she can carry out trading. It may be individual, mutual, corporate, or professional.

ADR

ADR is the abbreviation of American Depository Receipt. It is a process through which any US investor can trade non-US company stocks even without using their exchanges.

Adviser

A programmed management algorithm in MetaQuoyts Language that sends requests and offers through the platform is an adviser.

ADX

ADX is the abbreviation of the Average Directional Index. It is a set of technical indicator measures the trend of the market.

Annual Inflation

It is the increase in the price rate for consumer goods and services for a yearly periodic.

Arbitrage

Buying and sale of an asset to gain profit from the deference of prices of the market is arbitrage.

Ask

The asking price refers to the lowest price the seller accepts for security, asset, or bond.

Asset

Any item having an economic value that can be traded in the financial market is an asset. It can be metal, consumer goods, shares, bonds, or currency.

ATR

It is the abbreviation of the Average True Range. It is a standard indicator to measure the volatility of an asset.

Aussie

Aussie is the slang for Australian dollars.

Automated Trading

The automatic trading on the behalf of traders that is carried out with the help of some specific programs and permission by the trading terminal is automated trading.

B

Balance

The amount left after the execution of a trade is the balance.

Base Currency

The first currency in pair via transactions are made.

Bank Rate

The percentage rate at which the central bank of a country lends money to the country commercial banks.

Basis Point

A unit for measurement of quantity for change between two percentages is a basis point.

Bear

The trader who views the market when the asset prices are going downwards is bear.

Bid

The bid is the amount a party is willing to pay to buy a financial instrument.

Bollinger bands

It is a standard indicator tool of technical analysis.

Broker

A broker is like a bridge between the buyer & seller. Brokers deduct their commissions from both parties.

Bull

The trader who views the market when the asset prices are in the trend of evaluation is a bull.

Buy Limit

The pending order to buy at a low price than the existing price is the buy limit.

Buy Stop

The pending order to buy at a high price than the existing price is a buy stop.

C

Cable

It is slang for the Pound Sterling.

Candle Sticks

A method to view the charts of assets and their rates.

Capital Gain

The profit made by the buy/sell of an asset is Capital Gain.

Capital Gain Tax

CGT is the tax that a trader has to pay on the profit made by the buy/sell of an asset.

Capital Loss

The reciprocal of Capital Gain is Capital Loss.

CFD

CFD is the short form of Contract for Difference. These are the trading instrument that allows financial speculation on stocks, commodities, and others without actually buying or selling those assets.

Commission

The fee that is charged from the trader for providing services by the broker is commission.

Commodity

A commodity is a physical asset of a consumer good or raw material that has an economical value.

CPI

CPI stands for the consumer price index. It is an average of many consumer goods and services to show signs of inflation.

D

Day Trading

The trades that are executed within a day.

Dividend

The profit ratio that a company returns to its shareholders is the dividend.

DMA

It is the short form of Direct Market Access. It is the method of placing an order directly into the order books of the exchange.

E , F

EA

The short form of Expert Advisor is EA, which helps the trader by executing trades on the trader’s behalf and provide signals.

ECB

The main body of legislation in the Eurozone is Europe Central Bank.

Equity

The characterization of a trader account status that includes balance, credit, floating loss, and the profit is equity.

FED

Federal Reserve is the main regulatory body of the financial systems in the United States of America.

Fibonacci Retracements

A tool for the technical analysis that helps by calculating the trends of the market.

Financial Instruments

A financial instrument is a contract between two parties, which can be traded and settled.

Flat

The neutral state when all positions are closed.

Fundamental Analysis

The neutral state when all positions are closed.

G , H

Gap

It is the difference between the recent close price and the next opening price.

GDP

The short form of Gross domestic products is GDP. It is the total value of goods produced at a particular time.

GTC

Good Till Cancelled is to execute the trade at a fixed rate or a loss rate.

Hedging

It is a risk management strategy to reduce the risk by trading the same asset in the same size but opposite direction.

I

Index

The set of the asset used to indicate the performance of a specific object.

Indicators

These are the tools for the analysis of the market that predicts and indicates the movements.

Indices

A group of Index is known as Indices that show the progress of Market by which we can monitor the increase and decrease in market capitalization.

Inflation

The rise in the cost of goods and services in an economy is inflation.

IPO

When a company registers on the stock exchange, it is granted with an Initial Public Offering that means that it can sell its shares publicly.

K , L

Kiwi

The jargon for NZD is Kiwi.

Leverage

Leverage allows you to multiply your exposure to a financial market without committing extra investment capital.

Liquidity

The relationship between the trading volume and the price changes is liquidity.

Long

The position in which the trader buys a product first to sale is long.

Lot

The sum of asset that is utilized to execute trades of a specific asset is a lot.

Our Forex Glossary

This Forex glossary is up-dated and contains all the essential material. We are publishing this forex glossary is to ease the concepts of the forex traders who are keen to know more about the Forex trading.

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