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FX Glossary

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Base Currency

This is the point of reference for how much the buyer needs to pay in order to purchase the base currency. For instance, if you choose the USDJPY currency pair, USD is the base currency.

Bearish Rectangle

The Bearish Rectangle is projected when two parallel tradelines (support and resistance) connect the latest lows and highs of the price, which contain many price fluctuations inside.

Bid Price

The Bid Price is mainly devised to make an exact representation of an outcome from the one bidding.

Bid/Ask Spread

Bid-ask spread are set by the market makers who usually act as mediators between a trader and the financial market.

Bill Williams Chaos Theory

William’s Chaos theory, combined with the psychology of trading, gave birth to this study and the inception of several technical indicators.

Bollinger Bands Indicator

This is one of the more popular indicator tool used in trading as it has shown its reliability by yielding accurate results and signals.

Broker

Acting as middlemen, brokers are the ones working in the real estate industry and the online financial market. Brokerage firms can be classified into several major types.

Bull Market

Commonly used to describe the stock market, the concept of Bull Market is also applicable to other markets including bonds, real estate, commodities, and currencies.

Bullish Rectangle

The Bullish Rectangle is a pattern seen when two parallel trendlines (support, resistance) connect the recent lows and highs of the price which encapsulate price fluctuations.

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Security Deposit

Security deposit or Margin is the required amount to secure trade through a forex broker. It is a reserved portion of a trader’s equity account deposited to the broker as a guarantee of fulfillment of futures contract.

Spot Market

Spot Market or Cash market is a type of financial market that allows the delivery of financial instruments, such as currencies, securities, and commodities immediately.

SPREAD

Spread is the price difference between the Buy (Ask) and Sell (Bid) rate in Forex. In general terms, spread is the difference between two rates, prices, or yields.

Stochastic Oscillator

Stochastic Oscillator is a momentum-indicator that makes use of resistance and support. It compares a security’s specific closing price to its price range over a specific period of time.

Stop Loss Order

Stop Loss Order is the limit a trader sets to minimize their losses on a position. Traders use Stop Loss as it automatically closes a position once the price falls to the one set by the trader.

Support Level

Support level is the level in the trading chart at which the price is anticipated to move in the bullish direction upon contact. The support is likened to a “floor” since it is the tested level at which price reaches its lowest before it rises.

Symmetrical Triangle

The symmetrical triangle is a trading pattern that consists of simultaneous uptrend and downtrend lines. It shows a situation where supply and demand reached equilibrium or when a security’s price is consolidating. 

T

Take Profit Order

Take Profit Order is the limit a trader sets to close an open position for profit. Traders use Take Profit to secure the profit they already gained from their trades, in case the market moves in the opposite direction abruptly.

Technical Analysis

Technical Analysis is a trading discipline used to assess security and determine trading opportunities by analyzing statistical trends of the trading activity, such as volume and price movement.

Technical Indicators

Technical Indicators are mathematical calculations that are based on the historic price, volume, or open interest of a security to forecast the trajectory of the financial market or price behavior.

Trading Order Types

Also called a Trailing Stop-Loss, a Trailing Stop Loss is a special type of trade order. Not set at a single, absolute Dollar amount, the Stop Loss is set at a certain percentage or a certain dollar amount below the market price.

Trend Continuation Patterns

When a trader encounters a Continuation Pattern, he or she is informed that the price will carry on moving in the same path after said pattern is completed as before.

Trend Line

One of the basic concepts of technical analysis is the trend. It is based on assumption that market participants make decisions in herds making asset price movements sustainable for some time.

Trend Reversal Patterns

A Trend Reversal Patterns occur when a market trend changes direction. Spotting a potential reversal benefits a Trend Trader as it tells him or her to exit a trade once conditions become unfavorable.

Triple Bottom U-Turn

A low trend is a schematic indicator of the triple bottom's price; the third thrust in the trend strongly suggests a reversal.

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