Forex Glossary 3

Forex Glossary (PART 3 )

• Capital Markets
  Markets intended for medium- to long-term investment, such as US government bonds and Eurobonds

•  Central Bank
  A government or organization that manages a country's monetary policy. For example, the US central bank is the Federal Reserve, while others include the ECB, BOE and BOJ
  
  
• Chartist
  An individual who interprets historical data to find trends, predict future movements and aid in technical analysis
   
• Clearing
  The process of settling a trade
   
• Close a Position (Position Squaring)
  To eliminate an investment from one's portfolio by either buying back a short position or selling a long position.

• Commission
  The fee a broker charges for a transaction
   
• Confirmation
  A document exchanged by participants in a transaction that confirms the terms of said transaction
   
• Contagion
  The tendency of an economic crisis to spread from one market to another. For example, in 1997, financial instability caused high volatility in Thailand's domestic currency. This triggered a contagion that affected other emerging East Asian currencies and spread as far as Latin America. This event is now referred to as the "Asian Contagion."
    

Forex-Glossary

• Convertible Currency
  A currency which can be exchanged freely for other currencies at market rates, or gold
   
• Contract (Unit or Lot) 
  The standard unit of trading on certain exchanges.
  
  
• Cost of Carry
  The cost associated with borrowing money in order to maintain a position. It is based on the interest parity, which determines the forward price
   
• Counter party
  The opposite party in a given transaction; eg, the buyer as opposed to the seller or vice versa
   
• Country Risk
  The risk run by a currency trader that a given country's government may intervene in the market (does not include central bank intervention). This may occur during extreme political situations such as war or civil unrest
   
• Credit Checking
  A check performed to be sure both parties have the credit to cover the trade they wish to transact
   
• Credit Netting
  An arrangement that maximizes free credit and speeds the dealing process by reducing the need to constantly re-check credit. Large banks and trading institutions may have agreements to net outstanding deals
   
• Cross Rates
  An exchange rate between two currencies. The cross rate is said to be non-standard in the country where the currency pair is quoted. For example, in the US, a GBP/CHF quote would be considered a non-standard rate; whereas in the UK or Switzerland, GBP/CHF would be one of the primary currency pairs traded
   
• Currency
  A countryâ??s official unit of exchange, issued by its government or central bank, whose value is the basis for trade
   
• Currency Risk
  The risk of incurring loss due to an adverse change in exchange rates
    

Forex Glossary 2

Forex Glossary (PART2 )

• Basis
  The difference between the spot price and the futures price 

• Basis Point
  One hundredth of a percent

• Bear
  An investor who believes that market prices will decline

Forex-Glossary

• Bear Market
  A trend distinguished by a prolonged period of declining prices accompanied with widespread pessimism

• Bid
  The price at which a buyer is prepared to purchase; the price offered for a currency

• Bid/Ask Spread
  See spread

• Big Figure
  A dealer phrase referring to the first few digits of an exchange rate. These digits rarely change in normal market fluctuations, and therefore are omitted in dealer quotes, especially in times of high market activity. For example, a USD/Yen rate might be 107.30/107.35, but would be quoted verbally without the first three digits as, "30/35

• Bonds
  Tradable instruments (debt securities) issued by a borrower to raise capital. They pay either fixed or floating interest, known as the coupon. As interest rates fall, bond prices rise and vice versa

• Book
  The summary of a traderâ??s or a deskâ??s total positions

• Bretton Woods Accord of 1944
  An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets and set the price of gold at USD 35 per ounce. The agreement lasted until 1971. 

• Broker
  An individual or firm that acts as an intermediary between buyers and sellers, usually for a fee or commission. A dealer, by contrast, performs the same service but commits capital and takes one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party 

• Bull
  An investor who believes that market prices will rise

• Bull Market
  A trend distinguished by a prolonged period of rising prices; the opposite of bear market

• Bundesbank
  The central bank of Germany

• Cable
  Trader jargon referring to the Sterling/US Dollar exchange rate. The term originated in the mid 1800â??s, when the rate was transmitted via a transatlantic cable
   
   
   
   
   
   
   
   
   
   
   
   
   

Forex Glossary 1

Forex Glossary (PART 1 )

Forex-Glossary

• Account >>>>>>>>>>> A record of all transactions.

• Account Balance >>>>> See balance.

• Agent >>>>>>>>>>>>> An individual employed to act on behalf of another (the principal

• Aggregate Demand >>> The sum of government spending, personal consumption expenditures and business expenditures 

• All or None >>>>>>>>> A limit price order that instructs the FCM to fill the whole order at the stated price or not at all 

• Appreciation >>>>>>>> An increase in the value of an asset; the rising of a price in response to market demand. 


• Arbitrage >>>>>>>>>> The use of countervailing prices in different markets to profit from small price differentials via the purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market 

• Ask Rate >>>>>>>>>> The lowest price at which a financial instrument is offered for sale 

• Ask Size >>>>>>>>>> The amount of shares being offered for sale at the ask rate 

• Asset Allocation >>>>> The distribution of funds among different markets (such as Forex, stocks, bonds, commodities and real estate) to achieve diversification for risk management purposes and/or expected returns 

• Attorney in Fact >>>>> A person who, by virtue of having power of attorney, is allowed to transact business and execute documents on behalf of another person 

• Back Office >>>>>>>> The departments and processes related to the settlement of financial transactions 

• Balance >>>>>>>>>>> The amount of money in an account 

• Balance of Payments >> The record of a nationâ??s claims regarding transactions with the rest of the world over a particular time period. This includes merchandise, services and capital flows 

• Base Currency >>>>>>>
  1) The currency in which an investor or issuer maintains his/her book of accounts; the currency against which other currencies are quoted. In the Forex market, the US Dollar is normally considered the "base" currency for quotes, meaning that quotes are expressed as a unit of one USD per the other currency quoted in the pair. 
    2) The first currency quoted in a pair 
  
  

The meaning of Forex

 The meaning of Forex

Forex is a term that refers to the change in foreign ex , which is the currency trading market of a country by another. When you are in another country, trade in the currency of their country in the currency of the country you are visiting is that the forex market is all about. To exchange their U.S. dollars for another , for example - the Japanese yen , you must set the exchange rate between the two countries .

Forex story begins long after the creation of money as a means to purchase items . Often , foreign trade of a country still relied on barter, as the value of a currency is not always remember another country. The paper money was printed in notes to the value of metals such as gold, in the Middle Ages. The Templars were said to have used this method when the transfer of funds , which form the basis of our banking system today . Until the First World War, most currencies by central banks were supported by physical possession of gold. However, it has become acceptable to print money without that support , sometimes with disastrous results. The Bretton Woods agreement of 1944 was created to help stabilize local currencies and encourage the equitable sharing among countries .

The meaning of Forex

Comparing one currency to another is the heart of the currency. Currency pairs - literally a couple of coins - are compared with each other . For example , the U.S. dollar and the euro ... A coin is of particular value when the currency is traded against another . The value of the currency of each country is largely based on the value of traders regularly with him, or have similar economies. How is it is a fairly complex process , and will be discussed in another article .
Currencies are traded without a central , which is different from how they are traded stocks and futures . The foreign exchange market operates is Europe, Asia and the United States in different teams , so that currencies are traded continuously 24 hours a day . Currency trading between different banks , banks and forex brokers and dealers and individuals is performed thousands of times each day. No entity has the ability to influence the market - at least for long. This is really a democratic form of trading ...