Forex Vocabulary
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Forex Trading


Confirmation is used by traders who perform technical analysis, and it refers to using an additional indicator or indicators to support a trend suggested by one indicator. The Commitment of Traders report is a weekly report released by the Commodity Futures Trading Commission . The report shows how futures traders are positioned in the market and traders can use the COT report to help determine whether they should take short or long positions.


The FOMC, or Federal Open Market Committee, is the branch of the Federal Reserve bank that is in charge of short and long-term monetary policy decisions. In trading, execution is the completion of a buy or sell order from a trader. ETF stands for exchange traded fund, a type of investment security that is bought and sold on exchanges. Equity options are a form of derivative used exclusively to trade shares as the underlying asset. Buying a financial instrument means taking ownership of it from someone else, whether it is a commodity, stock or another asset. In trading and investing, the bid is the amount a party is willing to pay in order to buy a financial instrument.

Limit Price

A market where delivery takes place immediately after the trade of financial instruments. It is a calculation method that yields 4 resistance and support levels. It makes use of the High, Low and Close price of the previous day. A feature of trading platforms that allow the testing of expert advisors on historical data. The results help traders and developers to assess the performance of their strategies.


Share buyback, or share repurchase, is when a company buys back its own shares from investors. It can be seen as an alternative, tax-efficient way to return money to shareholders. Once shares are repurchased they are considered cancelled, but they can be kept for redistribution in the future. The SEC stands for the US Securities and Exchange Commission. It is a government agency set up to regulate markets and protect investors in the United States, as well as overseeing any mergers and acquisitions.

#11 Support

Never trade with the money that you cannot afford to lose! CFDs are leveraged products and as such loses may be more than the initial invested capital. Trading in CFDs carry a high level of risk thus may not be appropriate for all investors. Trading software (i.e. MT4, MT5) is provided by the broker for traders to place, manage and close positions electronically. The platform provides account management, live market prices, news feeds and charting tools.

  • A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security.
  • Share buyback, or share repurchase, is when a company buys back its own shares from investors.
  • Spot or spot date refers to the spot transaction value date two working days from the deal’s trade date.
  • Often referred to as a ‘pit broker’, not to be confused with ‘floor trader’ or ‘commission broker’.

I enjoyed the simplicity in the style of how you presented the information to the audience much like myself. This Terminology part has helped me a lot, i used to google term by term even the not so important ones. After reading this part i managed to make more sense of the information i was trying to crasp at the time. Exchange Rate – The value of one currency expressed in terms of another. For example, if EUR/USD is 1.3200, 1 Euro is worth US$1.3200.

Gross Loss

A pullback is a temporary pause or dip in an’s overall trend. The term is sometimes used interchangeably with ‘retracement’ or ‘consolidation’. However, a pullback should not be confused with a reversal, which is a more permanent move against the prevailing trend.

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If the client has bought EUR/USD, they would be ‘long’ the currency pair, but ‘short’ USD currency. Foreign Exchange transactions assume being ‘long’ one currency and ‘short’ another. The current value of a customer’s account, given the amount of money deposited and any changes resulting from profit and loss from existing and closed-out positions. The value also includes credits and debits from daily rollovers, commission, transfer fees or bank-related charges, if applicable.

Retail Investor

The weakness of the market to push prices higher and the presence of the pattern at the end of an upward move, signals possible bearish implications. A digital chart that plots the price movements of currency pairs, to help investors make informed trading decisions. A technical analysis tool, similar to the concept of a trendline. At times prices fluctuate between two parallel lines, the basic trendline and the channel or return line. Channels may be used to trigger buy/sell signals and calculate price targets.

This belief puts them at odds with bears, who take a pessimistic view on a’s direction. A company’s bottom line is an important factor in share trading. Variously, it can be used to refer to the net earnings or earnings per share of a business. A wallet is a virtual space where you can store your cryptocurrencies.

Leverage definition

Used in Futures markets to refer to the estimated price for a future month or date for which there is no bid, ask or trade price. The number of futures contracts bought or sold which have not yet been offset by opposite transactions. An agreement between countries to maintain a fixed exchange rate between their currencies. A process which the EMS is intended to lead to, especially after the Maastricht Treaty. A dealer is said to make a market when he or she quotes bid and offer prices at which he or she stands ready to buy and sell. The bid and offer rates at which international banks place deposits with each other.


During the course of an up as defined by successively higher tops and higher bottoms, the last top fails to exceed the previous top and prices fall below the last bottom. The ECB was established in 1998, located in Frankfurt , to manage the euro, keep prices stable and conduct EU economic & monetary policy. Its main aim is to keep prices stable, thereby supporting economic growth and job creation. A long white candlestick is formed at the end of a downtrend, preceded by a small black candlestick.

The risk attached to a transaction by virtue of its association with a particular country. This involves examination of the economic, political and geographical factors of a particular country. The foreign bank representative who regularly performs services for a bank that has no branch in the relevant centre, e.g. to facilitate the transfer of funds. Monthly measure of the change in the prices of a defined basket of consumer goods, including food, clothing and transport. A transaction that is opposite in direction and magnitude to an existing position and that has the effect of realising a gain or loss. The client can be an individual, money manager, corporate entity, trust account, co-owner or any legal entity that has an interest in the value of the account.

The overnight swap from the spot date to the next business day. Swiss Options and Financial Futures Exchange, a fully automated and integrated trading and clearing system. The term short forward refers to period up to two months, although it is more commonly used with respect to maturities of less than one month. Buying to unwind a shortage of a particular currency or asset.

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