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Forex Glossary

A - H I - M N - R S - Z


A

Appreciation A rise in the price or value of a currency (or other asset) over time.
Arbitrage The purchase of securities on one market for simultaneous or immediate resale on another market with the goal of profiting from a price discrepancy. Currency traders often arbitrage against exchange risk by buying a currency for immediate delivery but also selling that currency on the forward market at the same time.
Ask Price The rate at which a Client carries out a trading operation of buying.


B

Bar chart A type of chart which consists of four significant points: the maximum and minimum prices which form the vertical bar, the opening price, which is marked with a little horizontal line to the left of the bar, and the closing price, which is marked with a little horizontal line to the right of the bar.
Base Currency

The first currency in a currency pair. For example, in the following pair USD/EUR, the first currency (in this case USD) is referred to as the base currency. The primary base currency is the US dollar, meaning that quotes are most commonly expressed as a unit of $1 USD per the other currency quoted in the pair.

Bid Price The rate at which a client carries out a trading operation of sale.
Bid / Ask Spread The difference between the buy (bid) and sell (ask) price. In the following example - 0.9853/58 the spread is 0.0005 or 5 PIPs.


C

Candlestick Chart A chart that indicates the trading range for the day as well as the opening and closing price. If the open price is higher than the close price, the rectangle between the open and close price is shaded. If the close price is higher than the open price, that area of the chart is not shaded.
Carry Trade

At the same time: sale of the low-profit currency and currencie’s with high interest rate buy.

CFD Contract For Difference – financial agreement about the difference, which gives Client opportunity trading assets, not leading them physical. CFD are being trading on the margin trading conditions. Client’s profit or loss is created  from the difference between CFD buying and selling price.
Chartist An individual who uses charts and graphs and interprets historical data to find trends and predict future movements. Also referred to as Technical Trader.
Cross Rate An exchange rate between two non-US dollar currencies. For example: EUR/GBP. Trading between two non-US dollar currencies usually occurs by first trading one currency against the US Dollar and then trading the US Dollar against the second non-US dollar currency.


D

Direct Quote Expression of foreign currency in units of national currency.
Double Bottom

A figure of technical analysis of the market situation: the rate goes down to a certain level twice and then goes up again.

Double Top A figure of technical market situation when the rate goes up to a certain level twice and then goes down again.
Downtrend A declining trend, accompanied by diminishing maximums and/or minimums.


E

 Equity Value that reflects the Client’s current account status taking into consideration the operations carried out at the given moment.


F

FI Financial Instruments are instruments that provide trading operations happen. In Forex market FI are such instruments like forwards, futures, options and swaps.
Flat Forex

Non-loss and non-profit position, when all of positions are closed.

Floating profit/loss Unrealized gain or loss of open positions in certain quotes.
Force majeur Events, which were not possible to forecast, not to prevent. For example, such events like natural disasters, wars, terrorist acts, governmental actions, legislative and executive authorities, hacker attacks and other illegal activities in relation to the company's server. 
Forex The foreign exchange market or currency market or Forex is the market where one currency is traded for another. It is one of the largest markets in the world.
Free Margin Funds that are not used for open positions. Free margin is defined as taking Equity minus Margin.
Fundamental Analysis Analysis of economic, political and social data/events with the objective of forecasting future financial market movements.


G

 Gap A  situation when the price of an instrument at opening of the trading session varies form the price at closure of the preceding one with formation of an unfilled price range.


H

 Hedging A policy of risk neutralization by means of opening a position in the opposite direction for the same financial asset type and with the same lot amount to the given one.
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