When price action is confined between a support and a resistance level. Also known as a sideways market, flat market or trendless market.

Margin in commodities is not a down payment, as in securities, but rather a performance bond. A set minimum amount that a customer Binary option must maintain in his margin account to retain the futures position. A member of an exchange who trades for his own account.

Exinity Limited is a member of Financial Commission, an international organization engaged in a resolution of disputes within the financial services industry in the Forex market. A technical indicator developed by Larry Williams.

What Are Forex Lots?

He formerly served as the Managing Director of the CMT® Program for the CMT Association. Currency intervention has been a growing concern for forex investors, with many now scrutinising the history of a central bank’s interventions before deciding whether to invest. That said, Forex trading isn’t for everyone. It is an option for a well-educated investor. As always, it’s important you have a diversified portfolio of investments. Since forex trading is a very high risk, you will want this to only be a small portion of this portfolio if you choose to explore it.

forex definitions

VIX or volatility index Shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge.” Volatility Referring to active markets that often present trade opportunities. forex definitions The market is different from other exchanges in that it has no central location. Instead, it consists of traders who buy and sell currencies from their computers. The position in a futures market where a trader sells a contract with the intention of buying it back at a lower price for a profit or if at a higher price for a loss.

Transaction Risk

A yield curve where interest rates in the shorter dates are above those in the longer forex definitions dates. A way of smoothing a set of data, widely used in price time series.

The study economics activity as it apices to individual firms or well-defined small groups of individual or economics sectors. One who has bought futures contracts or options on futures contracts or owns a cash commodity. The ability to control large dollar amounts of a commodity with a Comparatively small amount of capital. A two-candle candlestick pattern that can been seen to mark tops and bottoms.

How The Money Market Hedge Works

The close of the candlestick is higher than the open price, revealing positive sentiment. A five-candle bullish reversal formation. The first candle is a long black body trading in the direction of the decline, showing off the bears’ strength. The second candle is black, and of a regular size gapping below-reaffirming the downward move.

Wedges usually slant in the opposite direction from the prevailing trend. Hence, a falling wedge appears during an uptrend whereas a rising wedge appears during a downtrend. A server that runs 24/7 without any downtime due to internet Trade FuelCell Energy connectivity, electricity cutoffs or hardware faults. It is subdivided into 100 centesimos. In an uptrend, two long white candles with a rising window in between are followed by a long black candle that fills the window (i.e. gap).

Currency Futures: An Introduction

Parabolic Stop and Reverse is a technical indicator developed by Welles Wilder. It is based on the premise that a strong trend will continue to increase in strength and hence it will follow a parabolic arc. During an uptrend a SAR point starts far from the price and as the price accelerates upwards the SAR points close the gap.

forex definitions

Higher exports means the country’s goods are in demand leading to an increase in their currency which is needed to pay for their good. Inflation – generally, the lower a country’s inflation, the higher its currency’s exchange rate.

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Theforward priceis a combination of the spot rate plus or minus forward points that represent theinterest rate differentialbetween the two currencies. Most have a maturity less than a year in the future but longer is possible.

Before you dive into selecting a forex broker and registering for an account, you need to familiarize yourself with several basic trading terms. A margin call is a notification you will receive when there are not enough funds in your trading account support open trades. Essentially, when your floating losses are greater than the minimum margin required. MXT Global’s margin call level is at 80%. MXT Global’s currency prices are displayed to the fifth decimal place for improved precision.

Don’t Miss Out On Great Trading Opportunities

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. When an exchange rate is not fixed, but adjusts depending on the supply and demand for a particular currency relative to other currencies.

  • Good ’til cancelled order An order to buy or sell at a specified price that remains open until filled or until the client cancels.
  • Reserves required to be deposited at central banks by commercial banks and other financial institutions.
  • “Rally” references a currency’s recovery in price after a period of either short-term or long-term decline.
  • It helps investors to get better insights into current market conditions.
  • Price movement less than the box size is ignored, thus noise is not recorded.

Currency pairs – A currency pair is, as the name suggests, a pair of currencies that represent the value of one currency against another. In forex trading, the changing value of a currency pair provides traders with the opportunity to make a profit. Currency pairs are expressed in a XXX/YYY format, such as EUR/USD. Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you.

When choosing a currency pair to trade, you should test your strategy either with a popular FX pair, or with your local currency against the USD, on our free, unlimited Demo Account. Be cautious and diligent in your trades, and open small trades initially to carefully observe how the market is performing over time. The bulk of FX trading is priced against the USD, which has long been regarded as the world’s official base currency. As mentioned above, all Major Currency Pairs are traded against the USD, and are generally regarded as the most popular currency pairs to trade. Many Cross-Currency Pairs also experience heavy trading flows including EUR/CHF, EUR/GBP, and AUD/JPY – to mention a few. Ask – The price at which the market maker/broker is willing to sell the currency pair. Interest rates – Volatile currency moves tend to occur when a country’s central bank makes an unexpected move in interest rates.