Forex Dictionary & Glossary
It provides signals when combined with Kijun-sen. A price level usually defined as a previous bottom, where buying pressure overcomes selling pressure. As a result, prices may find it difficult to break below. A reading of 0 means that the latest closing prices is equal to the lowest price of the price range over the chosen time period.
If volume doesn’t follow through then it hints for a reversal. In a Bitcoin Trading downtrend, volume should be heavier as selling pressure increases.
Basically, margin trading involves a loan from the forex broker to the trader. For example, if the EUR/USD is quoted at 1.4568/1.4570, the first figure is the bid price at which you can sell the currency pair. Because currency rates change all the time, and you want to know when to buy one currency and when to sell another to make a profitable deal. Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.
When trading, DMA stands for direct market access. It’s a way of placing trades that offers more flexibility and transparency than traditional dealing (which is usually referred to https://forexbitcoin.info/ as OTC, or over-the-counter). It’s suitable for advanced traders. Day trading is a strategy of short-term investment that involves closing out all trades before the market closes.
Spot currency is always traded in pairs. The concept of going long in trading is relatively straight forward. You simply click the “buy” button and then you enter into a long position. The price will either go up or go down – if the price goes up you make money – if it goes down, you lose money.
The price at which a trader accepts to buy a financial instrument. The simultaneous buying and selling of a financial instrument in different markets to take advantage of different pricing. Advance Directional Movement Index. It’s a technical indicator designed by Welles Wilder to determine the presence of price trend. A reading above 25 indicates the presence of a trend.
Whipsaw Slang for a highly volatile market where a sharp price movement is quickly followed by a sharp reversal. Wholesale prices Measures the changes in prices paid by retailers for finished goods.
Spot contracts are typically settled electronically. Spread The difference between the bid and offer prices.
- VIX or volatility index Shows the market’s expectation of 30-day volatility.
- We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances.
- The oscillator values are normalized by using a divisor based on mean deviation.
- A five-candle bullish reversal formation.
- Elliot Waves come in two forms, impulse and corrective, and patterns made by them are analyzed to predict trends.
- It is constructed using the implied volatilities of a wide range of S&P 500 index options.
We will talk in detail about Currencies, Charts, Bulls & Bears, Short Selling, and much more. The time is on the horizontal axis on the bottom. The bid is the best possible price at which forex vocabulary the trader can buy the instrument being traded at the current time. In the forex market, the bid price is the highest price the broker will pay to purchase the instrument off of you.
Interbank prices are different from retail prices. May be derived from Deposit Rate differentials.
The basic point of Forex trading is to buy a currency pair if you think its base currency will appreciate (increase in value) relative to the quote currency. If you think the base currency will depreciate (lose value) relative to the quote currency you would sell the pair. If you buy the EUR/USD (or any other http://www.roadfreightnsw.com.au/kryptowaluty/ currency pair), the exchange rate tells you how much you need to pay in terms of the quote currency to buy one unit of the base currency. In other words, in the example above, you have to pay 1.32105 U.S. dollars to buy 1 euro. Exchange Rate – The value of one currency expressed in terms of another.
It is expressed as a percentage or a fraction. GER30 An index of the top 30 companies (by market capitalization) listed on the German stock exchange – another name for the DAX. Given Refers to a bid being hit or selling interest. Giving it up A technical level succumbs to a hard-fought battle. GMT (Greenwich Mean Time) Greenwich Mean Time – The most commonly referred time zone in the forex market.
EUR/USD trades above 1.1150 amid coronavirus concerns
If you enter a long (buy) position and the base currency rate has gone up, you want to get your profit. To do so, you must close the position. As you can see in our example, your initial deposit serves as a guarantee for the leveraged amount of 100,000 USD.
Market maker definition
Luckily for you, our forex experts update this glossary regularly, to ensure that your trading vocabulary can continue growing. A central banker can be neither bullish nor bearish, as it is not possible forex for them to have a position on the market. Therefore, a central banker’s position can be either hawkish or dovish (this being the equivalent of bullish or bearish respectively for the regular trader).
A long black candle drives the market lower, well into the long white candle’s body and more specifically, below its mid-point -Indicating a bearish reversal. A technical Indicator developed by Patrick Mulloy in an attempt to produce less lag than the traditional moving average calculations and hence more sensitive to market changes. A technical analysis tool developed by Richard Donchian. It plots the highest high and lowest low of the last n candlesticks. It is used to measure volatility and identify support and resistance levels.