Forex Glossary

A certain amount of https://forexaggregator.com/ required from a client to maintain opened positions. Standard quantity of financial assets in one transaction. The feature of the market to provide the execution of large deals with no significant influence on prices. Currencies of the countries, whose exports are mainly based on natural resources.

When a market, instrument or sector is on an upward trend, it is generally referred to as a bull market. Bulls are speculators who believe that a market, instrument, or sector is going on an upward trajectory. This belief puts them at odds with bears, who take a pessimistic view on a market’s direction. Exinity Limited is a member of Financial Commission, an international organization engaged in a resolution of disputes within the financial services industry in the Forex market.

OTC trading definition

Negative/bearish divergence happens when the price of the security makes a new high, but the indicator fails to do the same and instead moves lower. Divergences frequently occur in extended price moves and frequently resolve with the price reversing direction to follow the momentum indicator. Divergence of MAs A technical observation that describes moving averages of different periods moving away from each other, which generally forecasts a price trend. Dividend The amount of a company’s earning distributed to its shareholders – usually described as a value per share.

The spread represents the difference between the ask and bid price of any currency pair. In most instances, this figure represents brokerage service costs and replaces transactions fees, with it usually presented in pips. It should be noted the spread could take on one of three forms through a fixed spread, a fixed spread with an extension, and a variable spread. Opposite of a long position, this involves taking a position that benefits from a currency’s decline in market price.

• Inflationary pressures typically show earlier than the headline retail.
• Deliberate downward adjustment of a currency against its fixed parities or bands, normally by formal announcement.
• London is the largest centre of foreign exchange trading.
• The sale of a currency futures not owned by the seller at the time of the trade.

They were never part of the Stock Exchange since they were seen as “unofficial”. Each OTC firm operates a market in the shares of a restricted list of (generally small and little-known) companies. Sometimes the dealer simply puts would-be buyers and sellers together but does not take a position in the shares themselves. These days OTC trading is seen as “consumer-friendly,” meaning that it is interested in getting the buyer and seller the best possible price. Action by a central bank to affect the value of its currency by entering the market.

Take Profit

A https://trading-market.org/ that is sensitive to political and economic events and thus fluctuates greatly and is generally unstable. It usually forms in the middle of a trend and hence is also known as measuring gap. Refers to the total amount of funds involved in opening and closing a position. Traders with risk aversion prefer lower returns with known risks over higher returns with unknown/uncertain risks . The potential of a negative outcome such as underperforming, failing to achieve investment/trading goals or losing money.

• Each Marubozu opens below the previous close and concludes above it.
• Selling of assets and or instruments to square a position.
• The upper band is drawn twice the value of the average true range calculated over 10 periods above a 20-period exponential moving average of typical prices.
• Good for day An order that will expire at the end of the day if it is not filled.

In the https://forexarena.net/ market, currencies trade inlots, called micro, mini, and standard lots. A micro lot is 1,000 worth of a given currency, a mini lot is 10,000, and a standard lot is 100,000. For example, a trader can exchange seven micro lots , three mini lots , or 75 standard lots .

Ask price

Therefore, tracking changes in this indicator can help the trader in making trades in forex. VWAP is the abbreviation for volume-weighted average price, which is a technical analysis tool that shows the ratio of an asset’s price to its total trade volume. It provides traders and investors with a measure of the average price at which a stock is traded over a given period of time. A Japanese candlestick pattern signaling bearish reversal.

Pennant refers to short-term graphical price patterns of trend continuation, indicating that its direction will be unchanged in the near future. For example, on the daily chart the pattern is usually formed within a week or two. Moving Average of Oscillator is a technical analysis tool which reflects the difference between the oscillator and its moving average .

The Descending triangle graphical price pattern is a chart pattern of an existing trend continuation, which is usually formed in a downtrend and confirms its further direction. Charts are graphical reflections of price changes of a financial instrument over time. The rectangle graphical pattern serves to confirm the direction of an existing trend. The bullish rectangle is formed in an uptrend and indicates high probability of continuation of the asset price growth.

A Japanese candlestick of a long body with very small (or non-existent) upper and lower shadows. An application store where traders can buy trading indicators, expert advisors, scripts and other applications. The Linear Regression Trendline, is an equilibrium line that is, a straight line run through a set of prices using the statistical technique of best fit for a period under study. The Upper and Lower Lines are parallel to and equidistant from the Trendline. The distance between either Line and the Trendline, represents the maximum close price deviation from the Regression Trendline.

Risk

It is a state of the market where supply and demand are in equilibrium. A buy signal is generated when %K crosses above the %D line at the oversold area below 20 and then %D rises above the 20-line. An individual investor who trades the markets for his own benefit rather on behalf of an organization.

For example, selling & buying of EUR/USD if the trend is reversed. Fibonacci – Considered by us as the most popular technical indicator in Forex. It indicates changes in the balance of power between the sellers and buyers. With the help of Fibonacci ratios you can foresee whether the market will be bullish or bearish.

Determine significant support and resistance levels with the help of pivot points. Forex is the market for trading international currencies. The name is a portmanteau of the words foreign and exchange. The daily trading volume on the forex market dwarfs that of the stock and bond markets. Entry costs are low and the marketplace is open around the clock. There are many choices of forex trading platforms, including some that cater to beginners.