The rate at which a country’s central bank lends money to its domestic banks can be termed as Bank rate.
In a currency pair, the first currency in the pair is called the base currency, and based on one unit of which other currency’s value is shown. For example, in the 114.18 USD/JPY pair, USD is the base currency, and 1 US dollar equals 114.18 Japanese yen.
When the prices of certain securities, assets, or markets are falling.
The price at which a trader is ready to sell a security.
When the prices of certain securities, assets, or markets are on the rise.
Buy Limit Order
An order to carry out a transaction at, or lower than, a specified price. The word ‘limit’ refers to the specified price.
If investors have a specific price in mind, they place Fill or Kill order. This way, if the order does not hit the specified price, it gets terminated or killed.
The price at which an order has been completed is called Fill Price.
Floating Exchange Rate
When an exchange rate is not fixed, but adjusts depending on the supply and demand for a particular currency relative to other currencies.
A digital chart that helps investors make informed trading decisions by plotting the price movements of currency pairs.
It is a trading strategy based on the concept that if you buy and sell (or sell and buy) a currency within a very short period of time, the chances of you making profit are higher than what you would make with large price movements.
Forex Signal System
It is a system for traders to receive signals which help them make a decision whether a specific time is suitable to buy or sell a currency pair.
Forex Signal System - Currency Basket
It is a weighted average formed by specific group of currencies that can act as a measure to value an obligation.
Forex Spot Rate
The current exchange rate that a currency pair can be bought or sold at is called Forex Spot Rate.
Forex Trading Robot
Forex Trading Robot is automated trading software, designed to help determine whether to buy or sell a currency pair at a given time.
The analysis based on the impact of economic and political events have on prices in financial markets (interest rate announcements, unemployment rate, etc.).
When investors make two counterbalancing investments to minimize the losses incurred by price fluctuation, it is known as Hedging. The main purpose is to get a protection against the risk that may be caused by adverse market movements.
Brokers offer leverage to increase traders’ buying power by enabling them to trade larger volumes on a small deposit. Leverage of 1:100 means that trader’s buying power is 100 times than the deposit.
An order that is executed at a specific price or a better one is called Limit Order.
The specific price referred to in limit order is called Limit Price.
The volume available in the market to trade for a specific currency pair.
Taking a long position on a currency means that you are buying that particular currency. You have to buy the first of the two currencies in the currency pair – the base currency.
Standardized quantity of a particular instrument you are trading is called a lot. Usually, there are three types of lots: micro, mini and standard. In forex, one lot is 100,000 units of a particular currency.
During periods of high volatility, prices are subject to change very quickly. Thus, the actual order execution price is usually different then what traders expected it to be. This phenomenon is called Slippage.
A currency that is sensitive to political and economic events and thus fluctuates greatly and is generally unstable is known as Soft Currency.
A trader who takes big risks while trading, choosing to trade instruments with a higher risk in the hope that they will return higher profits is known as a Speculator.
A sudden upward or downward movement in price in a short time period is called Spike.
Spread is the difference between the Ask and Bid price of a currency pair.
Stop Loss Order
It is an order placed to buy or sell a security/currency when a certain price is reached. These orders are placed to limit loss on a position.