There are a lot of technical terms that you might encounter with online trading and it can be really difficult to remember especially when you’re just starting to learn the basics.
Don’t worry. There’s a solution.
In this section we’ve listed the most commonly used terms when trading in the financial markets so you can easily familiarize yourself with the language.
Shall we begin?
A
Aggregate – a bank’s exposure to spot and forward forex contracts from a customer
Analyst – a professional who has expertise in analyzing and evaluating financial investments
Asian Session – the Asian trading session for forex trading. (5:00 PM EST – 2:00 AM EST)
Aussie – the AUD/USD currency pair.
B
Barrel – the unit of liquid volume used on international oil market that is estimated in US dollars
Bearish – belief that a currency’s value will decline and assumed as a general pessimistic trend
Bid – the price which the buyer is willing to shell out to make a purchase
BIS – short for Bank for International Settlements, the central bank for central banks
Bullish – belief that a currency’s value will rise and assumed as a general optimistic trend
C
Cable – the GBP/USD currency pair
Carry Trade – a trading strategy where the profit is gained from holding position with a positive swap and not from the price movement and closure of profitable position
Commodity Currencies – currencies of economies with exports that are heavily based in natural resources.
Consolidation – a period where market participants reassess the market and set the stage for the following price move
Crown Currencies – the Aussie, Sterling, Kiwi and Cad currencies
Cross – a pair of currencies without the US Dollar
D
Deal – a trade which was done at the current market price
Deficit – a negative balance of trade
Depreciation – a decline in the currency value resulting from market forces
DJIA – short for the Dow Jones Industrial Average (Also called Dow)
E
ECB – short for European Central Bank, the central bank of the countries that uses the Euro currency
Euro – the currency of the European Monetary Union
Expiry – the specific date and time when the option will expire
Extended – a market that is assumed to have moved too far
F
Federal Reserve – the Central Bank of the United States (also called Fed)
Flat – an unchanged economic data reading where the present levels remains the same as the previous level
Forex – the global currency exchange market
Forward P/E Ratio – Short for forward price to earnings ratio, it is a current stock’s price over its predicted earnings per share.
Futures – a method of trading financial instruments, commodities or currencies for a specific price and date in the future
G
G7 – the Group of 7 Nations (United States, United Kingdom,Germany, France, Italy, Canada and Japan)
G8 – the Group of 8 Nations (United States, United Kingdom, Germany, France, Italy, Canada, Japan and Russia)
Given – a bid being hit or selling interest
GMT – short for Greenwich Mean Time, the most commonly used time zone in forex trading
Greenback – the US dollar
H
Hedging – a type of strategy that is aim for reducing or off-setting huge price variations
Hoarding – acquiring money regardless if it has no value
I
IMF – short for the International Monetary Fund
Inflation – an increase in the value of consumer goods which affect the purchasing power
K
Kiwi – the NZD/USD currency pair
L
Liquidation – closing an open position by executing an offsetting deal
Loonie – the USD/CAD currency pair
London Session – the British trading session for forex trading (3:00 AM EST – 12:00 AM EST)
Long – purchasing more of an instrument with a belief that it will increase in value
M
Margin – the money deposited as security to cover any potential losses from huge price variations
Maturity – the period when a debt is due for payment
Momentum – a sequence of technical studies that evaluates the rate of price changes
N
New York Session – the American trading session for forex trading(8:00 AM EST – 5:00 PM EST)
Net Worth – the value of the assets that tops the liabilities
O
Offset – buying if one has sold or selling if one has bought
Order – to execute a trade at a specified rate
P
Parities – the price of a currency in terms of another
Pip – short for Price Interest Point, the smallest incremental move in floating foreign exchange rates
Pound – the GBP/USD currency pair
R
Rally – a recovery in price after a general declining trend
Range – the reverse of a trend where there are no changes in the prices
RBA – short for Reserve Bank of Australia, the central bank of Australia
RBNZ – short for Reserve Bank of New Zealand, the central bank of New Zealand
Resistance – the highest price that technical analysts note persistent selling of an exchange rate
Revaluation – the reverse of a devaluation where the pegged currency rises in value
S
Settlement – the confirmation of a deal
Shorts – traders who are bearish on the market
Spot – an immediate deal where the funds usually change hands within two days after the deal is struck
Sloppy – variable trading conditions that doesn’t show any particular trend
Swissy – the USD/CHF currency pair
SNB – short for Swiss National Bank, the central bank of Switzerland
Sterling – the GBP/USD currency pair
T
Technicals – short for technical analysis, a strategy where the historic price patterns are analyzed for predicting future price movements
Tokyo Session – the Japanese trading session for forex trading(7:00 PM EST – 4:00 AM EST)
Transaction – buying or selling of securities due to the the implementation of an order
U
Undo – reversing a transaction
V
Volatility – active markets that usually opens opportunities for trading
W
WSJ – short for Wall Street Journal
Y
Yard – means a billion units