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Forex Glossary!
Ask - The price at which sellers are
known as the offer or ask price.
Bank Rate - The rate at which
central banks lend money to
domestic banks.
Base Currency - The first currency
in the pair. The base currency is the
currency against which exchange
rates are quoted in a given country.
Bid - The price at which an investor
can buy a currency pair.
Buy Limit - An order to execute at
"the limit" or lower.
Cable - The British pound/US Dollar
exchange rate GBP/USD.
Carry Currencies - High interest
rate currencies.
Carry Trade - A trade that involves
buying high interest rate currencies
and selling currencies with low
interest rates. The idea is to hold the
position & collect interest daily on the
higher interest rate currency.
Central Bank -A bank, administered
by a government, which regulates
financial institutions within and
carries out monetary policy.
Conversion Rate - The value of
one currency exchanged for another.
Cross Rate - The exchange rate
between 2 currencies, where neither
are the USD.
Dealing Desk- Place where dealers
execute trades.
known as the offer or ask price.
Bank Rate - The rate at which
central banks lend money to
domestic banks.
Base Currency - The first currency
in the pair. The base currency is the
currency against which exchange
rates are quoted in a given country.
Bid - The price at which an investor
can buy a currency pair.
Buy Limit - An order to execute at
"the limit" or lower.
Cable - The British pound/US Dollar
exchange rate GBP/USD.
Carry Currencies - High interest
rate currencies.
Carry Trade - A trade that involves
buying high interest rate currencies
and selling currencies with low
interest rates. The idea is to hold the
position & collect interest daily on the
higher interest rate currency.
Central Bank -A bank, administered
by a government, which regulates
financial institutions within and
carries out monetary policy.
Conversion Rate - The value of
one currency exchanged for another.
Cross Rate - The exchange rate
between 2 currencies, where neither
are the USD.
Dealing Desk- Place where dealers
execute trades.
Drawdown - The size of a drop in the
value of an account from its high to its
low.
ECB - European Central Bank
Equity Curve - The value of an account
graphed over a specific period of time.
Exchange Rate - specifies how much
one currency is worth in relation to the
other.
Exotic Pairs - Refers to the currencies
that are traded less frequently as
opposed to the majors.
Exposure - The net of all long and short
positions.
Fiscal Policy -Tax policies that are used
to affect economic conditions.
Federal Reserve - Central bank of the
United States.
G8 - The seven leading industrialized
countries and Russia.
Hedge - A position to offset price
fluctuations in an opposite position to
control risk.
Leverage - The ratio of margin to the
maximum position size.
Lot - Standard unit of currency. Micro lot
is 1,000 units and equals 10 cents a pip.
Mini lot is 10,000 units and equals $1 a
pip. A standard lot is 100,000 units &
equals $10 a pip.
Margin - The minimum deposit required
to maintain an open position.
Margin Call - A notification that more
funds must be deposited into an account
because the value of the account has
fallen below the minimum margin needed
to cover the size of existing positions.
Market Order - An order to execute at
the best available price.
NAV - Net Asset Value. The total value of
an asset less liabilities.
value of an account from its high to its
low.
ECB - European Central Bank
Equity Curve - The value of an account
graphed over a specific period of time.
Exchange Rate - specifies how much
one currency is worth in relation to the
other.
Exotic Pairs - Refers to the currencies
that are traded less frequently as
opposed to the majors.
Exposure - The net of all long and short
positions.
Fiscal Policy -Tax policies that are used
to affect economic conditions.
Federal Reserve - Central bank of the
United States.
G8 - The seven leading industrialized
countries and Russia.
Hedge - A position to offset price
fluctuations in an opposite position to
control risk.
Leverage - The ratio of margin to the
maximum position size.
Lot - Standard unit of currency. Micro lot
is 1,000 units and equals 10 cents a pip.
Mini lot is 10,000 units and equals $1 a
pip. A standard lot is 100,000 units &
equals $10 a pip.
Margin - The minimum deposit required
to maintain an open position.
Margin Call - A notification that more
funds must be deposited into an account
because the value of the account has
fallen below the minimum margin needed
to cover the size of existing positions.
Market Order - An order to execute at
the best available price.
NAV - Net Asset Value. The total value of
an asset less liabilities.
Pip - The smallest upward or downward price movements quoted in Forex.
Retail- Non institutional, individual investor.
Risk/Reward - The amount you will risk to achieve a certain gain.
Rollover Rate - Daily rollover interest rate is the amount a trader either pays or earns,
depending on the currency pairs held.
Scalp - Short term trading with the objective of only getting small gains.
Sell Limit - An order to execute at "the limit" or higher.
Spot - Buying and selling Forex with the current date's price for valuation, but where
settlement usually takes place in two days.
Stop - An order to buy or to sell a currency when the currency's price reaches or
passes a specified level.
WTO - World Trade Organization.
Yield - The return on an investment.
Retail- Non institutional, individual investor.
Risk/Reward - The amount you will risk to achieve a certain gain.
Rollover Rate - Daily rollover interest rate is the amount a trader either pays or earns,
depending on the currency pairs held.
Scalp - Short term trading with the objective of only getting small gains.
Sell Limit - An order to execute at "the limit" or higher.
Spot - Buying and selling Forex with the current date's price for valuation, but where
settlement usually takes place in two days.
Stop - An order to buy or to sell a currency when the currency's price reaches or
passes a specified level.
WTO - World Trade Organization.
Yield - The return on an investment.
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