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