This document provides definitions for various terms related to forex trading. It includes definitions for over 50 terms from A to C, including adjustment, aggregate risk, analyst, appreciation, Asian central banks, balance of trade, bar chart, base currency, base rate, basis point, bearish market, BOC, BOE, BOJ, bond, book, and British Retail Consortium shop price index. The document is an alphabetical glossary intended to help people understand common financial and forex terminology.

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Forex
Glossary
–
Understanding
Forex
Terminology
If
you
are
thinking
of
getting
involved
it
can
be
helpful
to
gain
an
understanding
of
financial
jargon
although
we
firmly
believe
that
our
regulated
trading
partner
will
explain
things
in
simple
terms
that
can
be
understood
by
most
people.
Financial
market
jargon
can
be
extremely
complex
and
confusing,
which
is
why
we’ve
put
together
a
quick
Forex
glossary
to
help
you
understand
some
of
the
key
terms.
A
ADJUSTMENT
Represents
an
official
action
from
a
country
to
alter
payment
imbalances
–
it
is
usually
prompted
by
a
change
in
economic
policy.
AGGREGATE
RISK
This
is
a
reference
to
the
exposure
a
banker
or
broker
has
with
a
client
in
terms
of
contracts
of
foreign
exchange.
AGGRESSIVE
Refers
to
price
actions
and
trades
that
are
taken
with
conviction.
ANALYST
A
person
who
has
expertise
in
regards
to
analysing
Forex
investments.
APPRECIATION
A
product
will
appreciate
when
it
strengthens
based
on
market
demand.
ASIAN
CENTRAL
BANKS
These
are
the
central
banks
in
Asia
–
they
often
have
a
strong
influence
on
currency
direction
during
the
short-­‐term.
B
BALANCE
OF
TRADE
This
is
the
value
of
the
exports
from
a
country
after
the
value
of
its
imports
has
been
deducted.
BAR
CHART

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A
chart
featuring
four
notable
points:
the
opening
price,
indicated
with
a
horizontal
line
on
the
left;
the
high
and
low
prices
which
form
a
vertical
bar
and
the
closing,
which
is
referenced
with
a
horizontal
line
on
the
right
of
the
bar.
BASE
CURRENCY
This
is
the
first
currency
listed
in
a
currency
pair:
it
shows
how
much
that
currency
is
worth
compared
to
the
second.
Generally,
the
US
dollar
is
used
as
a
base
currency
in
the
majority
of
currency
pairs.
BASE
RATE
The
base
rate
is
the
rate
at
which
a
central
bank
lends
in
a
particular
country.
BASIS
POINT
This
is
a
unit
of
measurement
that
describes
a
minimum
chance
for
a
product’s
price.
BEARISH
MARKET
A
bearish
market
refers
to
a
negative
price
direction:
for
example,
if
you
see
a
description
of
a
“bearish”
JYP/USD
then
it
means
that
the
Japanese
Yen
is
likely
to
be
weak
compared
to
the
US
dollar.
BOC
An
acronym
for
the
Bank
of
Canada:
Canada’s
central
bank.
BOE
An
acronym
for
the
Bank
of
England:
the
central
bank
for
the
United
Kingdom.
BOJ
An
acronym
for
the
Bank
of
Japan:
the
central
bank
for
Japan.
BOND
This
is
the
name
for
debt
that
is
issued
during
a
specified
time.
BOOK
The
summary
of
a
desk’s
or
a
trader’s
total
positions
within
a
professional
environment.
BRITISH
RETAIL
CONSORTIUM
SHOP
PRICE
INDEX
Also
known
as
the
BRC
for
short,
the
British
Retail
Consortium
measures
inflation
rates
among
surveyed
retailers,
focusing
on
price
changes
from
goods
that
are
purchased
at
retail
outlets.
BROKER
A
firm
or
an
individual
acting
as
an
intermediary
–
the
aim
is
to
bring
sellers
and
buyers
together
based
on
a
fee
and
commission.

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C
CABLE
The
pairing
of
GBP
and
USD
earned
the
nickname
of
‘cable’
because
this
rate
was
originally
transmitted
across
to
the
USA
using
a
transatlantic
cable
back
in
the
1800s.
CAD
This
is
the
abbreviation
for
the
Canadian
Dollar.
CANDLESTICK
CHART
This
is
used
to
indicate
the
trading
range
for
a
particular
day:
including
the
price
during
the
opening
of
trade
and
the
close
of
trade
–
when
the
open
price
is
higher
the
rectangle
is
shaded
and
when
the
close
price
is
higher,
the
area
is
not
shaded.
CBs
This
is
the
acronym
used
for
central
banks.
CENTRAL
BANK
An
organisation,
usually
run
by
the
government
or
at
least
quasi-­‐governmental,
which
is
in
control
of
the
monetary
policy
of
an
individual
country:
such
as
the
Federal
Reserve
in
the
USA
and
the
Bundesbank
in
Germany.
CFDs
An
abbreviation
for
contract
for
difference,
this
derivative
exposes
the
change
in
value
of
underlying
assets:
including
equities
and
indexes.
Traders
can
use
CFDs
to
leverage
capital
and
this
offers
the
same
benefits
as
when
securities
are
traded
but
without
needing
to
actually
own
the
product.
CHARTIST
A
trader
that
uses
graphs
and
charts
and
makes
interpretations
of
historical
data
in
order
to
make
predictions
about
future
movements
and
trends.
CLOSED
POSITION
This
is
exposure
with
a
financial
contract
that
is
not
in
existence
any
more.
CORPORATES
Corporations
in
the
market
for
financial
management
and
hedging
purposes:
they
are
sometimes
price
sensitive
and
interest
could
be
long
term.
CPI
Short
for
Consumer
Price
Index,
this
is
a
measure
for
inflation.
CROWN
CURRENCIES

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These
are
the
currencies
of
the
Commonwealth:
namely
the
British
Pound,
the
New
Zealand
Dollar,
the
Australian
Dollar
and
the
Canadian
Dollar.
CURRENCY
The
term
for
any
type
of
money
that
is
issued
by
a
central
bank
or
government
and
is
considered
the
legal
tender
and
base
for
trades.
CURRENCY
PAIRS
These
are
two
currencies
which
are
used
to
make
up
foreign
exchange
rates.
CURRENCY
RISK
This
is
the
probability
of
a
negative
change
for
exchange
rates.
D
DAY
TRADER
This
is
a
term
that
refers
to
speculators
who
take
positions
in
commodities
before
liquidating
those
positions
before
the
close
of
the
trading
day.
DAY
TRADING
This
refers
to
making
a
trade
that
you
open
and
close
on
the
same
day.
DEAL
A
trade
done
at
the
existing
market
price:
this
is
a
live
trade
rather
than
an
order.
DEALER
Firms
or
individuals
that
work
as
counterparts
to
a
transaction
–
principals
will
work
on
one
side
and
hope
to
achieve
a
profit
by
closing
in
a
later
trade
with
a
different
party.
DEFICIT
Deficit
refers
to
a
negative
balance
of
payments
or
trades.
DELIVERY
This
is
a
trade
in
which
both
sides
will
make,
as
well
as
take,
delivery
of
each
product
traded.
DEPRECIATION
The
word
used
to
refer
to
the
decrease
in
value
of
an
asset.
E
ECB

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The
abbreviation
used
for
the
European
Central
Bank,
which
is
the
central
bank
for
countries
that
use
the
Euro
as
their
currency.
EURO
This
is
the
currency
of
the
Euro
zone.
EUROPEAN
MONETARY
UNION
Often
abbreviated
to
the
EMU,
the
European
Monetary
Union
aims
to
link
fiscal
policies
with
economic
policies
across
the
member
states
of
the
European
Union.
EUROZONE
ORGANISATION
FOR
ECONOMIC
CO-­‐OPERATION
AND
DEVELOPMENT
(OECD)
This
is
a
monthly
index
used
to
measure
economic
health
following
10
indicators
including
housing
permits,
interest
rate
spreads,
new
orders,
average
weekly
hours
and
stock
prices.
F
FACTORY
ORDERS
This
indicates
the
dollar
level
for
non-­‐durable
and
durable
goods:
it
is
more
detailed
than
the
durable
report
which
is
usually
released
earlier.
FED
This
is
a
short
name
for
the
Federal
Reserve
Bank,
which
is
the
central
bank
in
the
USA.
FOMC
The
acronym
for
the
Federal
Open
Market
Committee:
this
is
the
committee
that
sets
the
policies
of
the
US
Federal
Reserve.
FOREIGN
EXCHANGE
(FOREX,
FX)
The
buying
and
selling
of
a
currency:
this
is
usually
referred
to
as
the
FX
or
forex
market.
FTSE100
This
is
the
name
of
the
100
index
in
the
UK.
FUTURE
Two
parties
agree
to
execute
a
transaction
at
a
certain
time
in
the
future
after
agreeing
a
price
in
the
present.
G
GAP/GAPPING
Quick
market
moves
that
see
prices
jump
several
levels
without
trades.
They
typically
follow
major
news
announcements
and
the
release
of
economic
data.

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GOING
LONG
Purchase
of
stock,
currency
or
commodity
for
speculation
or
investment.
GOING
SHORT
Refers
to
the
sale
of
a
product
or
currency
that
is
not
owned
by
the
seller
with
the
expectation
that
prices
will
decrease.
GOLD
Generally,
gold
will
move
in
the
opposite
direction
of
the
US
dollar.
GREENBACK
This
is
the
nickname
given
to
the
US
dollar.
GROSS
DOMESTIC
PRODUCT
(GDP)
This
represents
the
value
in
total
of
a
country’s
output:
including
its
income
and
expenditure.
However,
it
only
refers
to
the
output
within
its
physical
borders.
GROSS
NATIONAL
PRODUCT
Adds
income
earned
from
working
abroad
and
investment
to
Gross
Domestic
Product.
GUARANTEED
ORDER
This
is
an
order
type
meant
to
protect
traders
from
market
gapping.
GUARANTEED
STOP
This
is
a
stop-­‐loss
order
which
will
guarantee
to
close
a
position
at
the
level
the
trader
dictates.
This
means
that
if
the
market
moves
your
close
position
is
still
guaranteed.
H
HEDGE
This
is
a
position,
or
potentially
a
combination
of
several
positions,
which
will
reduce
the
risk
of
a
trader’s
primary
position.
I
INFLATION
This
refers
to
the
economic
condition
in
which
the
prices
for
consumer
goods
increases,
therefore
reducing
purchase
power.
IPO
An
abbreviation
for
Initial
Public
Offering
–
which
is
a
company’s
initial
offer
to
the
public
for
its
stock.

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INTERBANK
RATES
These
are
the
foreign
exchange
rates
that
international
banks
quote
to
one
another.
INTEREST
RATE
DIFFERENTIAL
This
is
the
difference
in
interest
rates
between
currency
pairs.
INTERVENTION
When
a
central
bank
takes
action
to
affect
its
currency’s
value,
this
is
referred
to
as
intervention.
INTRODUCING
BROKER
The
name
given
to
a
corporate
entity
or
person
that
brings
accounts
to
brokers
and
receives
a
fee
for
these
introductions.
ISM
MANUFACTURING
INDEX
This
is
an
index
assessing
the
US
manufacturing
sector
by
taking
a
survey
of
executives
regarding
inventories,
deliveries,
employment,
new
orders
and
future
production.
ISM
NON-­‐MANUFACTURING
This
index
surveys
sector
firms
regarding
their
outlook.
J
JAPANESE
ECONOMY
WATCHERS
SURVEY
This
is
a
survey
of
businesses
that
service
consumers
directly
to
assess
their
mood
and
signal
sentiment.
JAPANESE
MACHINE
TOOL
ORDERS
Looks
at
the
total
value
of
orders
placed
with
machine
tool
manufacturers.
This
is
seen
as
important
as
they
indicate
demand
among
companies
which
manufacture
machines.
K
KIWI
This
is
the
nickname
given
to
the
NZD/USD
currency
pair.
L
LEVERAGE
Also
known
as
a
margin
this
represents
the
fractional
increase
or
percentage
available
to
trade
from
the
capital
that
is
available.
LIABILITY

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The
potential
loss,
financial
obligation
or
debt.
LIBOR
Standing
for
the
London
Inter-­‐Bank
Offered
Rate,
the
LIBOR
is
a
base
rate
that
is
used
for
international
lending.
LIMITS/LIMIT
ORDER
This
is
an
order
with
the
intention
of
buying
at
lower
levels
compared
to
the
market
rate
or
selling
at
higher
levels
compared
to
the
current
market.
LIQUID
MARKET
Any
market
with
a
high
level
of
sellers
and
buyers:
enough
for
prices
to
move
smoothly.
LIQUIDATION
This
is
when
an
existing
position
is
closed
because
offsetting
transactions
are
being
executed.
LOT
This
is
a
unit
that
is
used
to
measure
the
amount
of
the
deal.
M
MACRO
Macro
refers
to
the
longest
term
trader
who
will
base
their
decisions
on
fundamental
analysis.
Typically,
a
macro
trader
can
hold
a
position
from
six
months
to
several
years.
MARGIN
This
is
the
collateral
an
investor
should
deposit
in
order
to
retain
a
position.
MONETARY
EASING
The
process
of
loosening
monetary
constraints:
this
could
include
deposit
ratios,
money
supply
or
changing
interest
rates.
N
NET
POSITION
Refers
to
the
amount
of
currency
which
is
sold
or
bought
and
has
not
been
offset
by
opposing
transactions.
NYA.X
A
symbol
used
for
the
NYSE
Composite
Index.
O

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OFFER
Also
referred
to
as
the
Ask
price,
this
is
the
price
a
market
is
willing
to
sell
a
product.
Typically
prices
are
quoted
as
Bid/Offer
–
with
the
offer
price
also
known
as
the
Ask
price.
OPEN
ORDER
This
is
an
order
that
is
cancelled
whenever
the
market
makes
a
move
to
its
designated
price.
ORDER
This
is
an
instruction
to
complete
a
trade
execution.
P
PIPS
Pips
are
the
smallest
unit
for
pricing
within
any
foreign
currency.
They
refer
to
digits
that
are
either
subtracted
from
or
added
to
the
fourth
decimal
place.
POLITICAL
RISK
The
likelihood
that
changes
in
a
government’s
policy
will
influence
the
movement
of
the
forex
market.
PORTFOLIO
This
refers
to
investments
that
are
owned
by
an
entity.
PROFITS
This
is
the
difference
between
the
cost
and
sale
price
when
the
sale
price
is
higher.
PURCHASING
MANAGERS
INDEX
(PMI)
This
economic
indicator
looks
at
the
performance
of
manufacturing
companies
within
a
country.
Q
QUOTE
A
market
price
used
generally
just
for
information
purposes.
QUANTITATIVE
EASING
The
choice
of
a
central
bank
to
push
money
into
its
economy
with
the
goal
of
stimulating
market
growth.
QUARTERLY
CFDs
This
is
a
future
that
expires
once
every
quarter…
so
every
three
months.
R

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RETAIL
SALES
This
measures
retail
sales
of
services
and
goods
that
are
sold
by
retailers
–
sampling
different
sizes
and
types.
RISK
This
is
exposure
to
uncertain
change
and
usually
carries
negative
connotations.
RISK
MANAGEMENT
Financial
analysis
and
trading
techniques
used
to
control
or
reduce
exposure
to
certain
types
of
risk.
ROLLOVER
When
an
open
position
for
the
value
date
closes
at
the
same
time
as
the
opening
position
for
the
next
day’s
value.
S
SELL
When
you
take
a
short
position
while
anticipating
that
the
forex
market
will
go
down.
SETTLEMENT
A
process
when
a
trade
is
put
into
the
books,
while
recording
the
various
counterparts
of
the
transaction.
SHORT
POSITION
This
is
an
investment
position
that
will
benefit
from
declines
within
the
market
price.
SLIPPAGE
This
refers
to
the
difference
between
a
price
requested
and
a
price
obtained
due
to
changes
in
market
conditions.
SNB
An
abbreviation
referring
to
the
Swiss
National
Bank.
SPOT
MARKET
Markets
where
products
are
traded
at
a
market
price
for
an
immediate
exchange.
SPOT
PRICE
Refers
to
the
current
market
price.
SPOT
TRADE
Sales
or
purchases
of
a
product
for
immediate
delivery.
STERLING

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The
currency
used
in
the
UK:
also
known
as
the
British
Pound.
STOCK
EXCHANGE
The
market
where
the
trade
of
securities
takes
place.
STOP
LOSS
HUNTING
When
a
market
looks
to
be
reaching
a
particular
level
it
is
said
to
be
heavy
with
stops.
When
stops
are
triggered
the
price
often
jumps.
STOP
ORDER
This
is
an
order
to
sell
or
buy
when
a
certain
price
is
reached.
At
this
point,
the
stop
point
becomes
a
market
order
and
will
be
executed
at
the
best
price
available.
STOP
ENTRY
ORDER
This
is
an
order
to
buy
above
the
existing
price
or
sell
below
the
current
price.
STOP
LOSS
ORDER
An
important
risk
management
tool
to
close
long
positions
below
the
current
market
price
and
close
short
positions
above
the
market
price.
This
limits
the
potential
downside
in
the
case
that
the
market
moves
in
a
direction
you
did
not
want.
SUPPORT
The
price
which
will
act
as
a
floor
for
future
or
past
price
movements.
SWAP
The
simultaneous
purchase
and
sale
of
the
same
amount
of
currency
with
a
forward
exchange
rate.
T
TAKEOVER
When
a
company
takes
control
of
another
by
purchasing
its
stock.
TECHNICAL
ANALYSIS
Studies
of
price
patterns
and
charts
looking
for
clues
as
to
the
future
direction
of
the
market.
TREND
Movement
in
price
that
leads
to
net
changes
in
value.
TURNOVER
This
is
the
total
volume
or
value
of
money
across
all
executed
transactions
for
a
certain
period
of
time.

12.
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137
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U
UK
JOBLESS
CLAIMS
CHANGE
This
tracks
the
change
in
the
number
of
people
claiming
unemployment
benefits
in
the
UK
during
the
previous
month.
UK
PRODUCERS
PRICE
INDEX
INPUT
Measures
inflation
according
to
manufacturers:
when
they
attempt
to
buy
services
and
materials.
UNEMPLOYMENT
RATE
A
measurement
of
the
total
workforce
unemployed
and
looking
for
employment.
UPTICK
A
price
quote
that
is
higher
than
the
previous
quote.
US30
A
short
name
for
the
Dow
Jones
Index.
US
OIL
A
name
given
to
WTI
crude
oil.
US
PRIME
RATE
The
interest
rate
at
which
a
US
bank
will
lend
to
corporate
customers.
V
VARIATION
MARGIN
These
are
funds
that
traders
need
to
hold
in
order
to
cope
with
market
fluctuations.
VOLATILITY
A
reference
to
active
markets
that
offer
trade
opportunities
in
the
present
climate.
W
WHOLESALE
PRICES
A
measurement
of
the
change
in
prices
that
retailers
pay
for
finished
goods.
WSJ
An
abbreviation
for
the
highly
respected
Wall
Street
Journal
publication.
X

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235
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203
137
4400
–
www.unite.gi
XAG/USD
This
is
a
symbol
used
for
the
silver
index.
XAU/USD
A
symbol
used
for
the
gold
index.
XAX.X
A
symbol
that
is
used
for
the
AMEX
Composite
Index.
Y
YARD
A
reference
to
a
billion
units.
YEN
The
basic
currency
of
Japan.
YIELD
A
reference
to
the
percentage
return
from
an
investment.
YUAN
This
is
the
base
currency
for
China.