Here are some of the most common terms
used in FOREX
Sometimes called the Offer Price; this is the market
price for traders to buy currencies. Ask Prices are
shown on the right side of a quote – e.g. EUR/USD 1.1965
/ 68 – means that one euro can be bought for 1.1968 USD
A type of chart used in Forex Trading
Technical Analysis. Each time division on the
Forex chart is displayed as a vertical bar which
show the following information – the top of the bar is
the high price, the bottom of the bar is the low price,
the horizontal line on the left of the bar shows the
opening price and the horizontal line on the right of
bar shows the closing
the first currency in a currency pair. A quote shows how
much the base currency is worth in the quote (second)
currency. For example, in the quote - USD/JPY 112.13 –
US dollars are the base currency, with 1 US dollar being
worth 112.13 Japanese yen.
– is the price a Forex trader can sell
currencies. The Forex Trading Bid Price is shown
on the left side of a quote - e.g. EUR/USD 1.1965 / 68 –
means that one euro can be sold for 1.1965 UD dollars.
Spread – is the
difference between the Forex Trading bid price
and the Forex Trading ask price in any currency
quotation. The spread represents the Forex
Trading broker's fee, and varies from Forex
Trading broker to broker.
the intermediary between buyer and seller. Most FOREX
TRADING brokers are associated with large financial
institutions and earn money by setting a spread between
bid and ask prices.
- A type of chart used in Forex Trading Technical
Analysis. Each time division on the Forex
is displayed as a candlestick – a red or green vertical
bar with extensions above and below the candlestick
body. The top of the extension shows the highest price
for the chart division and the bottom of the extension
shows the lowest price. Red candlesticks indicate a
lower closing price than opening price, and green
candlesticks indicate the price is
– A currency pair that does not include US dollars –
– Two currencies involved in a FOREX transaction
– e.g. EUR/USD.
A statistical report issued by governments or academic
institutions indicating economic conditions within a
In First Out (FIFO)
– refers to the order open orders are liquidated. The
first orders to be liquidated are the first that were
Exchange (FOREX, FX,)
– Simultaneously buying one currency and selling
– Analysis of political and economic conditions that can
affect currency prices.
– The ratio of the value of a transaction to the
required deposit. A common margin for FOREX
trading is 100:1 – you can trade currency worth 100
times the amount of your deposit.
– An order to buy or sell when the price reaches a
The size of a FOREX transaction. Standard lots
are worth about 100,000 US dollars.
– The euro, German mark, Swiss franc, British pound, and
the Japanese yen are the major currencies.
The Canadian dollar, the Australian dollar, and the
Zealand dollar are the
Cancels the Other (OCO)
– Two orders placed simultaneously with instructions to
cancel the second order on execution of the first.
An active trade that has not been closed.
or Points –
The smallest unit a currency can be traded in.
The second currency in a currency pair. In the
currency pair USD/EUR the euro is the quote currency.
Extending the settlement time of spot deals to the
current delivery date. The cost of rollover is
calculated using swap points based on interest rate
– Analysis of historical market data to predict future
movements in the market.
The minimum change in price.
The cost of a FOREX transaction – typically the
spread between bid and ask prices.
A statistical measure indicating the tendency of sharp
price movements within a period of time.