Trading Glossary

As you making your steps into trading you will realise that there are lots of technical terms that might be difficult to understand or remember initially. To help you out we have created this section where we have listed all the most commonly used terms when trading online so that you can familiarise with those and use as a reference as you improve your experience.

Aggregate – is a bank exposure to spot and forward forex contracts from a customer

Analyst – is an expert who’s job is analyse and evaluate financial investments

Asian Session – is the opening hour of the Asian trading session (5:00 PM EST – 2:00 AM EST)

Aussie – is the currency pair with the USD also known as AUD/USD

Barrel – is the unit to measure the liquid volume on the international oil market and it is also estimated in USD

Bearish – is the expectation that an instrument will decline and lose value

Bid – is the actual price the buyer is prepared to pay

BIS – short for Bank for International Settlements, the central bank for central banks

Bullish – is the expectation that an instrument value will rise and acquire value

Cable – is the the GBP/USD currency pair

Carry Trade – it defines a trading strategy where you can make profit by holding a position with a positive swap and not from the price movement and closure of profitable position

Commodity Currencies – is the currencies of assets with exports that are based heavily in natural resources.

Consolidation – indicates a period where the market is reassessing and set the stage for another price move

Crown Currencies – the Aussie, Sterling, Kiwi and Cad currencies

Cross –is a pair of currencies without the US Dollar

Deal – is a trade that is carried out at the current market price

Deficit – is a trade with a negative balance

Depreciation – a currency that is declining rapidly in he market

DJIA – short for the Dow Jones Industrial Average (Also called Dow)

ECB – short for European Central Bank, the central bank of the countries that uses the Euro currency

Euro – the currency of the European Monetary Union

Expiry – the exact time when an option will expire

Extended – a market that is predicted to have moved too far

Federal Reserve – the Central Bank of the United States (also called Fed)

Flat – an unchanged economic data reading where present levels remain static

Forex – the global currency exchange market

Futures – a method of trading financial instruments, commodities or currencies for a specific price and date in the future

G7 – the Group of 7 Nations (United States, United Kingdom,Germany, France, Italy, Canada and Japan)

G8 – the Group of 8 Nations (United States, United Kingdom, Germany, France, Italy, Canada, Japan and Russia)

Given – a bid being hit or selling interest

GMT – short for Greenwich Mean Time, mostly used in forex trading

Greenback – the US dollar

Hedging – a type of strategy that is aim for reducing price variations

Hoarding – acquiring money even if there is no value

IMF – stands for International Monetary Fund

Inflation – an increase in the value of consumer goods which will reduce overtime

Kiwi – the NZD/USD currency pair

Liquidation – closing an open position by executing a deal which offset that position

Loonie – the USD/CAD currency pair

London Session – the British trading session for forex trading (3:00 AM EST – 12:00 AM EST)

Long – purchasing more of an instrument with a belief that it will go up in value

Margin – the money deposited as security to cover any possible loss

Maturity – the period when a debt is has to be paid off

Momentum – asequence of technical studies that evaluates the rate of price changes

New York Session – the American trading session for forex trading (8:00 AM EST – 5:00 PM EST)

Net Worth – the value of the assets that increase the liabilities

Offset – buying if one has sold or selling if one has bought

Order – to execute a trade at a specified rate

Parities – the price of a currency in terms of another

Pip – short for Price Interest Point, the smallest incremental move in value

Pound – the GBP/USD currency pair

Rally – a recovery in price after there has been a declining trend

Range – the reverse of a trend where there are no changes in the prices

RBA – short for Reserve Bank of Australia, the central bank of Australia

RBNZ – short for Reserve Bank of New Zealand, the central bank of New Zealand

Resistance – the highest price that technical analysts have identified as persistent selling of an exchange rate

Revaluation – the reverse of a devaluation where the currency rises in value

Settlement – when the deal is confirmed

Shorts – when traders are bearish on the market

Spot – an immediate deal where the funds usually change hands after two days the deal was agreed

Sloppy – variable trading conditions that doesn’t seem to follow any trend

Swissy – the USD/CHF currency pair

SNB – short for Swiss National Bank, the central bank of Switzerland

Sterling – the GBP/USD currency pair

Technicals – short for technical analysis, a strategy where the historic price trend is analysed to estimate future movements

Tokyo Session – the Japanese trading session for forex trading (7:00 PM EST – 4:00 AM EST)

Transaction – buying or selling of securities after an order has been implemented

Undo – when a transaction has been reversed

Volatility – active markets that normally open opportunity for trading

WSJ – short for Wall Street Journal

Yard – means a billion units