Wednesday, April 26, 2017

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FOREX TRADING STRATEGIES

 

FOREX GLOSSARY

 
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

ADX (Average Directional Index) - A technical tool for measuring a trend's strength. This index works on a 0 to 100 scale. 0 indicates no trend at all. The closer the result is to 100, the stronger and more significant the trend is. ADX doesn’t indicate a trend's direction, but only its power.

Ask Price - Also known as the Offer Price (appears as the second part of a Forex quote). The price at which the market is ready to sell a particular currency pair. This is the price a trader must pay to buy the base currency.
 
Aussie (AUD) - Aussie is a slang term that is used to describe the Australian Dollar. If you are looking for the etymology, it's called Aussie merely to differentiate it from the other Dollars like U.S Dollar, which is named Greenback. Likewise, the Canadian Dollar is called Loonie.
 
B

Bar Chart - A common type of graphic representation of the price actions in Forex. Each bar is built of 4 points: Opening price, closing price, highest and lowest price for the time frame it represents
.
Base Currency - The left hand currency in a currency quote e.g. EUR/USD.
 
Bearish Engulfing - In the study of Candlesticks, a bearish engulfing pattern is formed when a small bullish candle is accompanied by a large bearish candle that overshadows or engulf the previous candle. It demonstrates the weakness in a buying trend and pre-indicates a potential selling trend in the market. For instance, the buyers are exhausted and sellers are likely to enter the market.

Bearish Market - A pessimistic market characterized with falling prices. In a bear market there are more sellers than buyers.

Ben Bernanke - The former head of the FED (USA central bank) since 2006. Considered as controversial, mainly thanks to the global economic crisis which started in the U.S. but solid.

Bid Price - The price at which the market is ready to buy a particular currency pair. It appears as the first part of a Forex quote and is the price a trader receives when they sell the base currency.

Bid/Ask Spread - The difference between the Bid price and the Ask price.

 

BOC (Bank of Canada) - The central bank of Canada, established in 1935 and governed by Stephen Poloz. Its headquarter is in Ottawa, Ontario, Canada. Besides being a central bank, it's charged with the responsibility of price stability and economic growth.
 
BOE (Bank of England) - The central bank of the United Kingdom, established on 27 July 1694 and governed by Mark Carney. BOE is the center of focus for forex traders and stock market investors as it's charged with the responsibility of controlling the money supply through monetary policy, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.
 

BOJ (Bank of Japan) - The central bank of Japan, established on 27 June 1882 and governed by Haruhiko Kuroda. Besides this, a nickname of the BOJ is Nichigin. Like other central banks, the BOJ is also a center of focus for forex traders and stock market investors as it's charged with the responsibility of controlling the money supply through monetary policy, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.

 
Bollinger Bands - Technical indicators for measuring market volatility. Built of a band which includes 3 lines: Center, Top and Bottom. The center line connects the average prices over a period of time. The supporting lines define the band between the peaks and lows across the presented period. Bollinger bands are good for identifying upcoming trends.

Breakouts – These happen when the price breaks (Crosses) a support or resistance level. Breakouts lead to serious currency movements and increasing volatility in the markets.
 
 
Brexit - Brexit is a combination of "Br" and "Exit", where "Br" represents Britain and "Exit" denotes departure. A blending of both leads to "Britain's Departure" from the European Union. It refers to the referendum of June 23, 2016, where the British residents voted to exit from the European Union.

Broker - The mediator between the buyers and sellers in the market. The broker executes the trader's buy and sell orders and charges the spread as a commission fee. Online Forex brokers enable everyone to easily participate in the market without the necessity to act through banks.
 
Buck (USD) - Buck is a slang term used for the Dollar. According to etymology, the word originally is driven from "deerskins" which was used as a medium of exchange back in 1700's. The U.S. Dollar became the leading medium of exchange once it was introduced after the Coinage Act in 1792, though the "Buck" term remained being used for the Dollar.

 

Bullish Engulfing - In the study of Candlesticks, a bullish engulfing pattern is formed when a small bearish candle is followed by a large bullish candle that overshadows or engulf the previous candle. It demonstrates the weakness in a selling trend and pre-indicates a potential buying trend in the market. For instance, the sellers are exhausted and buyers are likely to enter the market.  

 
Bullish Market - An optimistic market characterized by rising prices. In a bull market there are more buyers than sellers.
 
Buy Limit - A buy limit order is a type of pending order that allows a trader to put instructions in the trading software (Mt4) in order to purchase a security at a specified price. It's placed below the CMP (current market price) if a trader expects that the price will bounce back after falling to a specific trading level. Here, the trader aims to buy at low price and sell at a higher price.
 

Buy Stop - A buy stop order is a type of pending order that allows a trader to put instructions in the trading software (Mt4), to purchase a security at a specified price. It's placed above the CMP (current market price) if a trader expects that the price will soar further on the breakage of a certain level.
 

C
 
Cable - Cable is a slang term used by forex traders, particularly to refer the exchange rate of the GBP/USD currency pair. According to etymology, it roots to the 19th century when the large cable was used to transmit the exchange rates between USD and GBP across the Atlantic. Since then, the cable is used to refer GBP/USD.

Candlestick Chart - The most popular chart used in Forex. It is a nicer, more graphical version of the bar chart. Built of candle shaped sticks. Green (or white) candles indicate uptrends and red (or black) candles represent downtrends. Each candle shows the open, close, high and low prices for the specific time frame.

Carry Trade – A trading strategy that focuses on the interest rates of the currencies traded. The idea is to buy a currency with rising interest rate while selling a currency with falling interest rate. The profits are derived from the growing differential between the two rates. The JPY is relatively very popular for Carry Trade due to its extremely low interest rates across the years (usually interest rates are at or near 0). JPY is efficient against currencies with rising interest rates.

Central Bank - Governmental bank whose job is to manage and run the monetary policy in the country, while at the same time maintaining the currency's strength and stability.

 

CFD (Contract For Difference) - Is a type of a derivative that is commonly traded in the financial market. Besides this, it is referred to as a contract between two parties (the buyer and the seller), and according to this contract, the seller is obligated to pay the difference (current value minus contract value) to the buyer, while in the case of a negative difference, the buyer will settle instead.


Channels - An excellent, easy to use tool, mainly for beginners. It defines the price movement inside a channel, helping us to identify trends.
 
Commercial Bank - A commercial bank is a financial institution that serves as an intermediary party between the depositor and borrower for the sake of earning the profit. Besides this, the commercial banks follow the guidelines of the central bank and implement the monetary policy.

CPI (Consumer Price Index) - A monthly report that measures the average change in the prices paid by urban households for a basic basket of consumer goods and services. CPI is a good indicator of the level of inflation in the market.

 

Cross Hair - In the trading platform (Mt4), a crosshair is a very helpful tool to know the parallels of the selected point in a chart (Date, Time & Price) or to know the number of pips between two points. The scroll button on the mouse or Ctrl+F can be used to activate the tool.

Cross Currency Pairs - Currency pairs which do not include the US dollar, e.g. GBP/CHF.

Currency Pair - Two currencies that are simultaneously used in a trade (one is bought and the other is sold).

D


Demo Account – A free trading account for practice (with no real money transactions involved). Fantastic for beginners who wish to get familiar with Forex trading. Nowadays most brokers allow their users to open demo accounts in order to try their Forex trading platforms before depositing real money.
 
Derivatives – A derivative is an agreement between two or more parties whose value is driven by an underlying financial security or asset. It aims to mitigate the risk faced by investors in the shape of variations in forex exchange rates, bonds, stocks, indexes, and commodities.

Doji - A common type of candlestick. It is characterized by a lack of body and with long shadows. Usually it resembles a cross/inverted cross. In many cases, Dojis alert traders to a change in the balance of power in the market between buyers and sellers.
 
Dollar Index - The Dollar Index is an index that measures the value of U.S Dollar against the basket of peers currencies. Its ticker symbol is USDX, DXY. It incorporates six currencies to calculate the index using weighted geometric mean. Euro (EUR), Japanese Yen (JPY), Pound Sterling (GBP), Canadian Dollar (CAD), Swedish Krona (SEK), Swiss Franc (CHF).

 

Donald Trump - Donald John Trump is the 45th elected President of the United States of America. He earned a degree in economics from the Wharton School of the University of Pennsylvania back in 1968. Formerly, he was a businessman, politician, and television personality. Being a President of largest economy, he is in focus of investors around the globe for the future prospects of U.S financial and economic systems.


Double Bottom - A common chart pattern consisting of two lows at relatively equal levels. This identifying technique can help us to predict potential uptrends.

Double Top - A common chart pattern consisting of two peaks of relatively equal height. This identifying technique can help us to predict potential downtrends.

Downtrend - A trend whose general direction is down. Also referred to as a bear trend.

 

Dynamic Support - Dynamic support refers to the bottom barrier of a trend or a level at which a current downtrend is expected to stop as the price finds “support”, but this support is not static and keeps adjusting itself to fluctuations in the market. Trend indicators, including Moving averages, Bollinger bands, and Ichimoku are a few examples of a dynamic support and resistance.


E

ECB - The European Central Bank

Economic Calendar - An important feature of your trading platform. It presents a roundup of all significant economic announcements and releases, as well as other fundamental events taking place around the world which might impact on the market.

Elliot Wave - A common trading pattern. An identification of Elliot Wave allows the trader to predict trends with high probability. The pattern is built of 8 waves. The first 5 build one trend and the following 3 belong to an opposite trend.
 

Engulfing Bar - In the study of candlesticks, an engulfing bar is formed when a small candle is accompanied by a large candle in the opposite direction and it overshadows or engulfs the previous candle. It demonstrates the weakness in a trend and pre-indicates a potential reversal in the market. There are two types of engulfing bars: bullish engulfing and bearish engulfing bars.

Enter Trade - Starting trading activity by opening a position (buying or selling a currency pair).

Exit Trade - Ending trading activity by closing a position.
 
Exponential Moving Average - In the technical analysis, an exponential moving average (EMA) is a trend indicator that is identical to the Simple Moving Average with the only difference that it gives more weight to the most recent prices. In the forex trading, the 100 & 200 periods EMA's are broadly used by traders to identify the market trends.

 

F

Fakeouts - Fictitious breakouts. These happen when the price breaks a support or resistance level but turns back to its previous direction right after.

FED - The Federal Reserve, the central bank of USA

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. Remarkable pivots are 38.2%, 50% and 61.8%.

Fiscal Policy - Fundamental economic policy conducted by governments for the benefit of their economies.
 

FOMC (Federal Open Market Committee) - FOMC is an abbreviation of Federal Open Market Committee. It's a subsidiary of the central bank of the U.S named FED (Federal Reserve) and charged with the responsibility of controlling the money supply through open market operations, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.


Forex (FX) - FX is a short form of Foreign eXchange and it refers to the market in which currencies are traded.
 

Forex Signals A forex signal refers to a recommendation to enter a Buy/Sell trade on a particular currency pair, commodity or an index at a specific price and time by a signal provider that can be a forex trader or an analyst. Learn How to use our Forex Signals here. 

Foward Contract - A forward contract is a non-standardized contract and an obligation to buy or sell a particular security at a predetermined price at a specified time in the future. It aims to mitigate the risk faced by investors in the shape of variations in forex exchange rates, bonds, stocks, indexes, and commodities. It's also a "forward outright".

Fundamental Analysis - Analyzes economic, political and social events in an effort to determine present and future economic trends. In other words, the fundamental approach analyzes the sources of price movements in currencies.

 

Futures Contract - A futures contract is a type of derivative that refers to the legal contract and an obligation to buy or sell a particular security at a predetermined price at a specified time in the future. It aims to mitigate the risk faced by investors in the shape of variations in forex exchange rates, bonds, stocks, indexes, and commodities.

 

G


G 8 - A group of the most industrialized countries in the world. The associates in the G8 are: USA, Japan, England, Germany, France, Italy, Russia and Canada.

 

Gaps - Gaps refer to the area where the price of a currency, stocks, indexes or a commodity moves sharply bullish or bearish, leaving no sign of trading in between candlesticks or the bars on the chart of that security. It is normally caused by a sudden change in fundamentals in the market.



GDP (Gross Domestic Product) - The total value of all goods and services produced in the market (excluding imports). GDP helps to measure the standard of living in the market. Negative data implies a weakened economy.

Go Long - A buying action. The trader buys a currency pair, hoping its value will increase.

Go Short - A selling action. The trader sells a currency pair, hoping its value will drop.

 

Greenbacks - Greenback is a slang term used for the "Paper U.S Dollar", but traders often use it to refer the USD in forex trading. According to etymology, back in 1861 - 1862, during the American Civil War, the U.S government issued a currency note printed in green on its back and since that time, it's called Greenback.

 


H


Head and Shoulders - Considered as a relatively reliable and accurate chart pattern for long term trading. Built of 3 peaks, while the second peak (the head) is the highest (or lowest, in case of an upside head and shoulders). The other 2 peaks are about the same height - the shoulders. A head and shoulders pattern is a good sign to go short (or to go long, in the case of an upside head and shoulders).

I


ICBC - Chinese bank for loans. The largest commercial bank in the world (by market capitalization).

Inflation - An increase in the prices of goods and services in the market. Due to inflation, a soda can that used to cost 10 cents 20 years ago, costs 1 dollar today. Inflation weakens a currency's performance. The central bank is responsible for controlling inflation through the manipulation of interest rates and the money supply.

Interest Rate - The market rate at which the buyer (or borrower) has to pay the seller (or loaner) for continuing to hold the currency. Interest rates impact the performance of all currencies in the Forex market. Rising interest rates cause currencies to strengthen, falling interest rates cause currencies to weaken.

Intraday Trading – A trading strategy for very short terms. Dynamic activity in which traders open and close positions in a matter of hours up to a single day tops.

 

Inverted Hammer – In the study of the candlestick trading strategy, an inverted hammer is a bullish reversal pattern that's formed after a bearish trend in the market. It's exactly opposite to "Hammer" as it has a long upper shadow (wick), small lower body and little or no lower shadow (wick), so it resembles an "Inverted Hammer". Besides that, it exhibits the weakness in a selling trend and signifies a potential buying trend in the market.

 

J
 
Janet Yellen – Janet Yellen is the Chair of the central bank of the United States named "Federal Reserve" or FED since the 3 Feb 2014. She is an American economics and served as a Vice Chair of FED in 2010 to 2014. She earned her Ph.D. in economics from Yale University in 1971. Being a chair of the FED, she influences the monetary policy to control price stability and economic growth in the United States.
 


K


Kiwi (NZD) - Kiwi is a slang term used for the New Zealand Dollar (NZD). It originates its name from the "Kiwi" which is embossed on the back of New Zealand's coin


L


Leverage - The percentage of money you are allowed to "borrow" from your broker in order to open a position. Think of it as a "loan" from your broker. It helps traders to trade higher volumes with smaller amount of money. The more you leverage your money, the higher the potential for profit and the risk of loss from trades.

Line Chart – Line charts present general price movement over a period of time. The line connects the assets closing prices along the chosen period. However, it is less recommended for use than other types of charts.

Liquidity - Refers to the volume of the trades in the market. It is the ability to exchange currencies without really affecting the price of the pair. The more liquid a currency pair is, the less impact buy and sell actions will have on its price.

Live Quotes - A quote of a currency pairs' rates offered in real time.

Long Term Trading - Trading positions that last from a week up to few months. Long term trading is considered as an investing strategy. Long term traders usually base their trades on fundamental analysis, high capital amounts and very low leverage.

 

Loonie (CAD) - Loonie is a slang term used for the Canadian Dollar (CAD). It originates its name from the "Loon" which is embossed on the back of Canadian coin.


Lot - The standard trading unit that traders transact. Micro Lot – The smallest tradable lot size: 1,000 units of the currency. Mini Lot – A smaller lot size: 10,000 units of the currency. Standard Lot - 100,000 units of the currency.
 

M


MACD (Moving Average Convergence/Divergence) - A technical indicator that measures an average of the average prices (The average between EMA and SMA) over different periods of time. MACD helps to determine trends.

Majors - The most widely traded currency pairs in the world. The major currency pairs are those in which trading volume is highest. The major currency pairs are comprised of eight currencies: EUR, GBP, AUD, NZD, USD, CAD, CHF and JPY.

Marabuzo - A common type of candlestick characterized by a full body, with no shadows.

Margin - The deposit required for trading at a certain amount. Greater margin increases your buying power as well as your exposure to potential losses.

 

Mario Draghi - Mario Draghi is the president of the European Central Bank since the 1 November 2011. He is an economist who also worked at Goldman Sachs from 2002 to 2015. Besides this, he obtained a Ph.D. in economics from the Massachusetts Institute of Technology (MIT) in 1976. Being a president of the ECB, he influences the monetary policy to control price stability in the Eurozone.

 

Mark Carney - Mark Joseph Carney is the Governor of the Central Bank of the United Kindom, named "Bank of England" since July 1, 2013. He is an economist and formerly has served as the Governor of the Bank of Canada from 2008 until 2013. Besides this, he obtained a masters and doctoral degree in economics from St Peter's College, Oxford, back in 1993 and 1995 respectively.



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Market Risk - The chance for future price changes in the market's currency.

Money Management - Controls how much of your money you risk when you enter a trade. A good money management approach is to always risk a fixed percentage of your equity, not higher than 10% per position. Smart money management is exactly what prevents us from losing all of our capital at once.

Moving Averages - An affective technical indicator which connects price averages over different periods of time. It points out a possible trend's direction.
 
MPC (Monetary Policy Committee) - Is a branch of the Central Bank of the United Kingdom named BOE (Bank of England) and charged with the responsibility of controlling the money supply through interest rates and open market operations, aiming to achieve the benchmark inflation, unemployment rate, and economic growth.
 

N


NFP (Non Farm Payrolls) - The change in the number of employees in the market over the past month. It indicates the market's general economic condition.

O
 

Open Market Operations - Open Market Operations (OMO) is a tool of monetary policy that refers to the buying and selling of bonds and government securities in the open market to control the money supply in the economy. For instance, a Central Bank buys the government securities if it intends to increase the money supply in the economy and vice versa.


Order - A trade execution

Overbought - Market conditions of excess buying. It signals that the momentum is about to change in favor of the sellers.

Oversold - Market conditions of excess selling. It signals that the momentum is about to change in favor of the buyers.

P


Parabolic SAR – A popular technical indicator for predicting upcoming trends. Its location compared with the market price determines whether to go long or to go short (buy or sell). Parabolic SAR is affective in volatile markets and works well on strong trends.

 

Pending Orders Pending Order is an option in the Metatrader4 that allows traders to place the instructions in the software to permit it to execute trades once the specific market conditions is met. There are four types of Pending Orders; Buy Limit, Sell Limit, Buy Stop and Sell Stop.
 
Pinbar - In the study of candlesticks, the pinbar is a single candlestick that hints the traders about a possible reversal in the market. A pinbar has a small body, but a long wick usually two times the size of a candle's body and by nature, it's a reversal candle.

Pip - The smallest price units in a price quote. It is the fourth number after the decimal in most price quotes. A 1 pip change is a price movement of 0.0001 .

Political Risk (Polirisk) - The extent of exposure to political risks that can increase governmental instability and affect investor activity and a currency's performance.

 

Pound (GBP) - Pound is the monetary unit of the United Kingdom, symbolized as £ (GBP) and originated from the value of a weight (pound) of silver.

Price Action In the study of technical analysis, the Price Action is a trading strategy that includes reading charts, candlesticks, swings (high & low), support and resistance to predict the future price and trend. It helps traders identify the buy/sell trading levels in order to profit in forex trading. 

Psychology - An important element in Forex. One of the main keys for success in Forex is to eliminate emotions while trading. An experienced trader knows how to trade while in a proper state of mind.

Q


QE (Quantitative Easing) - An expansionary monetary policy, where a central bank intends to increase the money supply in the economy by purchasing government securities and bonds from the market, aiming at economic growth.

 

 Quote (Counter) Currency - The right hand currency in a currency quote e.g. EUR/USD.

 


R


Rally – A price recovery which follows after a period of declines.

Ranging (Flat) Trend – A sideways trend which represents uncertain market conditions. Neither of the market forces (sellers or buyers) is dominant.

 

RBA (Reserve Bank of Australia) - The Central Bank of Australia, established on 14 January 1960 and governed by Philip Lowe. Its headquarter is in Sydney, New South Wales, Australia. Besides being a Central Bank, it's charged with the responsibility of price stability and economic growth. 



Recession - A period of sustained economic contraction. Recession is influenced by fundamental socio-economic factors, like industrial production, GDP and more.

Rejection Candle - In candlestick trading strategies, the rejection candle refers to a pinbar, hammer, inverted hammer, shooting star or a hanging man candlestick pattern that signifies a potential reversal in a trend. The rejection candle has a potential to divert a bullish trend into a bearish trend and a bearish trend into a bullish.

Reserve Rates - The tool of monetary policy, according to which every commercial bank is required to keep the certain portion of its deposits with the central bank to avoid liquidity risk. The higher reserve rates, the more decreases in the money supply in the economy and vice versa.


Resistance Level - The upper barrier of a trend (Buyers' ceiling). The level at which a current uptrend is expected to stop as the price rise encounters “resistance”.

Retail Sales - A monthly report on the sales of retail goods and merchandise in a country.
 

Reversal Patterns - In the forex market, a reversal refers to a change in the direction of a price trend, whereas the reversal pattern is a formation of the support and resistance, reversal candlesticks and various chart patterns that have or can cause a reversal in the price trend of a currency pair. For instance, in the candlestick analysis, the hammer, inverted hammer, shooting star and test bar are the few examples of a reversal pattern.


Risk Management - Foreign exchange risk management allows the trader to define himself as a trader in terms of risk vs. odds. Smart risk management puts under control the levels of risks that the trader wishes to take throughout his trading. Risk management should determine your Forex trading strategies. It is designed to preserve the value of your currency inflows and investments, while enabling you to manage your initial trades.

RSI (Relative Strength Index) – A technical indicator that works on a 0 to 100 scale. The area below 30 signals a buying opportunity and the area above 70 signals a selling opportunity.

S

Sanctions – Sanctions refer to the actions taken by a country or countries against other countries for political reasons, resulting in a loss of business and diminishing appeal of related currencies. 


Scalping – A very frantic strategy for short, intraday trades. Based on openings of many positions, when the earnings potential from a single position is small, but the total earnings potential from a lot of winning positions simultaneously is high. A Scalping Strategy helps to reduce risks, but its disadvantages are the need for high trading capital and the high number of spreads you will have to pay your brokers.

 

Sell Limit – A sell limit order is a type of pending order that allows a trader to put instructions in the trading software (Mt4), to purchase a security at a specified price. It's placed above the CMP (current market price) if a trader expects that the price will plunge back after soaring to a specific trading level. Here, the trader aims to sell at high to buy at a lower price.

Sell Stop A sell stop order is a type of pending order that allows a trader to put instructions in the trading software (Mt4), to purchase a security at a specified price. It's placed below the CMP (current market price) if a trader expects that the price will plunge further on the breakage of a certain level.

Sentiment Analysis – A study to predict a crowd psychology or herding behavior to determine the direction of the price movement of a security. The crowd psychology is often derived from an expectation of an outcome. This type of trading strategy is called Trading the Market Sentiment.

 

Shinzo Abe - Shinzō Abe is the 57th and 63rd Prime Minister of Japan since 26 December 2012. He resigned on 12 September 2007 for health reasons and he is honored to the longest serving PMs in Japanese history. Besides this, has he introduced a "Three Arrow" policy named Abenomics for fighting the deflation and economic growth in Japan. 


Shooting Star - In the Candlestick Trading Strategy, a shooting star is a bearish reversal pattern that is formed after a bullish trend in the market. It's identical to "Inverted Hammer" as it has a long upper shadow (wick), small lower body and little or no lower shadow (wick). Besides this, it exhibits the weakness in a buying trend and signifies a potential selling trend in the market.

Short Entry - Short entry is a slang term that is used in the forex trading to signify a sell position. It is also used as "going short" in a trade. Likewise, the "Long entry" or "going long" are used for the buy positions.

Short Sell - Short selling is a financial term that refers to selling in advance. In the forex trading, It's a market position where the trader has sold a currency which is not owned by him. It helps investors to take profit from any news, speculation or analysis by selling a currency in advance to buy it back at lower prices. The difference between the selling price and buying price is considered as profit or loss for a trader, depending on the closing price.

Short Term Trading - Trading strategies focused on short periods (day trading up to a couple of weeks top).

Signal (Market Alert) - Trading alerts coming from the market. Forex Signals services allow the trader to follow and copy trading actions and executions from experienced traders, with a high percentage of successful trades. FXMarketLeaders offer our users FREE market alerts on the different currency pairs!

 

SNB (Swiss National Bank) - Swiss National Bank is the central bank of Switzerland and began business activities on 20 June 1907. The current chairman is Thomas Jordan. Its headquarters are in Bern and Zurich. Besides being a central bank, it's charged with the responsibility of price stability and economic growth. 

Sterling (GBP) - Sterling is a slang term used for the British Pound. If you are wondering why it's named sterling, it's because a coin of the British Pound once weighed one troy pound of sterling silver, giving it the nickname of "Sterling". 

Stochastic – A technical indicator that shows oversold and overbought areas on the chart. The area below 20% surface implies oversold conditions and the area above 80% surface implies overbought conditions. Stochastic is considered as a relatively good buying and selling alerts provider.
 
Stock Index – The stock index is an average value of diverse stock prices listed and traded on the stock markets. It is considered as one of the main indicators to gauge the performance of the overall stock market of an economy. For instance, the S&P 500 is a stock index that represents the performance of the NYSE (New York Stock Exchange).

Stop Loss Order - An exit trade order, which automatically closes an open position at a specific price, specified in advanced by the trader. A Stop Loss limits potential losses should the market go against you.

Supply/ Demand Ratio - The difference between the supplied amounts of goods and services and the demand for them. As the demand rises or the supply drops, the value of goods or services (e.g. currency) goes up.

Support Level - The bottom barrier of a trend (Sellers' floor). It is the level at which a current downtrend is expected to stop as the price finds “support”.

 

Swaps – Swap is a fee that is charged by a broker from the client on the overnight positions. A forex swap is the interest rate differential in the two currency pairs that an investor is trading, and it is determined according to either your position that is long or short. For instance, if a currency pair has a positive swap value, you are earning interest by holding that position each day. If the swap value is negative, you are being charged that much for holding that position. This is based on the difference in interest between the two currencies in the pair, as well as the current price of that pair.


Swing Trade – A short term trading strategy usually lasting from a couple of days to a week. The goal of this strategy is to ride on existing market trends and to take as much advantage of them as you can, in order to make relatively quick profits, while reacting fast to changes in market behaviors.

 

Swissie (CHF) – Swisse is a slang term used for the Swiss franc (CHF).


Symbol - The 3 letters used to identify a currency. These represent the country of origin and the name of the currency, e.g. USD (US dollar); EUR (euro), JPY (Japanese Yen).

T


Take Profit Order - An exit trade order, which automatically closes an open position at a specific price, specified in advanced by the trader. When the price reaches this rate the trade closes at a predefined profit.

Technical Analysis - The technical approach uses tools, technical indicators, formulas and patterns on charts, in order to predict future trends and changes in currencies. It analyzes the trends and not the reasons why they happen.

 

Theresa May - The Prime Minister of the United Kingdom and Leader of the Conservative Party since 11 July 2016. She preceded by David Cameron, ex-prime minister of the UK who resigned after the Brexit. She has been a Member of Parliament since 1997.  


Time Frame - Traders can choose to look at the trading charts in different time frames. For example, say you choose to look at a 30 minutes chart - it means that each single candle represents the trading activity over a 30 minutes period. The most popular time frames are 15 minutes, 1 hour and 1 day frames.

Trading Account - Your capital available for use in trades on the online trading platform. Trading Book - A self-compiled journal for managing and following your trading activity, while writing down actions, thoughts, results and anything which can improve your future trading.

Trading Platform - Online software provided by the broker. Forex trading platforms are used for trading transactions, executing orders and managing your account. That is why it is important to choose the right broker.
 
Trend - In the forex market, a trend refers to a long term, medium term, and short term direction of a price of a currency pair. For instance, the EUR/USD traded at $1.3990 back in May 2014 and continued in a downward trend for more than 2 years to trade at 1.0348 in Jan 2017. Moreover, a trend can be upward, downward or sideways.

Trend Line - One of the simplest, most basic tools for the trader's usage on the trading platform. It connects a group of price rates throughout a chosen time frame (either price lows or highs). The more points it connects, the more stable and reliable a trend it will indicate.

U


Uptrend - A trend whose general direction is up, it is also called a bull trend.

V

Vladimir Putin - Vladimir Vladimirovich Putin is the 2nd and 4th President of Russia since 7 May 2012. He was born on 7 October 1952 and studied law at the Saint Petersburg State University, graduating in 1975. Earlier, he had served as the Prime Minister of Russia two times from 1999 to 2000 and again from 2008 to 2012. 



Volatility - Describes the level of price fluctuation in a currency pair. Greater volatility indicates a greater level of uncertainty in market expectations.
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