Expecting the price will fall.

Expecting the price will go up.

A currency pair like for example GBPUSD i.e. trading currencies against each other. So, if the price of GBPUSD is 1.8 it means 1GBP=1.8USD

Most traded world currencies are known as majors. USD, EUR, GBP, AUD, CAD and CHF

Less traded but still common currencies. NZD

Usually less liquid currencies from developing countries like TRY, BRA, HUF

Trading forex with two working days in advance. So while the deal is made today, the actual exchange between the buyer and the seller will take place in two business days.

The interest rate charge or credited for keeping FX positions opened overnight.

Over the counter. These are products created by the broker/bank and are customized for the customer so not part of a regulated market but instead a contract between you and your agent.

Contracts that settle on a given day. While the transactions are available almost at any time, the clearing – which is the delivering of the product – will take place on a given date. Futures are usually traded monthly or quarterly which means that you want to buy Oil in a regulated market you would have to choose between say the 14th of March and the 14th of April. The quantities of these contracts are standard and not negotiable. You can buy multiple contracts but not fractions so if you are interested in the latter you will have to go on the OTC market.

Contracts for Difference. As the name suggests these contracts are created by brokers, banks etc. to reflect the price of a product available in the regulated market (eg Futures) but are customized to the need of the customer. Here the customer can fraction the contract, use (more) leverage, pay additional spread instead of commissions etc. There is no delivery in these contracts hence they must be closed before the expiry date. Some brokers allow for an automatic rollover to the next expiry which may cost a fee. The trader can also do the rollover manually (so close the current expiration and open the same position on the next one) but this will mean he will have to be subject of the spread again.

A financial index is an indicator of how a certain market is performing. It is usually based on the price movement of a basket of shares but the calculations vary widely. They can aim to measure how the economy is going by taking into consideration the price share of the biggest companies of that country (eg DAX), measure how a certain industry is doing (eg. Nasdaq), calculate the volatility of the market (eg. VIX) etc.

Raw materials traded on an exchange

Valued metals like Gold, Silver, Palladium, Palladinium. They can be classified as forex being traded against the USD.

It is equal to 1/100th of a percent. In Forex it is usually the fourth decimal (or the 5th digit overall). In CFDs it is usually a given like for example for 1 lot of DAX 1 pip=25Euro.

The smallest price movement

The size of a standard contract

The value of your transaction. In Forex 1 Lot is 100.000 of the base currency. For CFDs 1 Lot’s value is calculated Pip Value*Price

The amount needed as a deposit or guarantee to open a position.

The amount of money available in the account that is free and available.

The ratio between Volume and Margin
Leverage= Volume/Margin

The sum of Profit and Loss

The value of the portfolio in a given moment. It includes the profit and loss of opened positions.

Equity = Margin + Free Margin

Equity = Balance + PnL

The value of the portfolio that takes into consideration only closed positions.

The opening of contrary positions that will inevitably cause both profit and loss at the same time (Being short and long at the same time). It also implies that it is possible to have multiple opened positioned on the same direction.

The standard time taken into consideration. In charts it shows the price movement within that time represented by a candle..

An algorithm that makes the required calculators and reflects them live on the chart (or next to it) for example the moving average price line. You can check some of the most used indicators here. Most platforms will have already some indicators available and some will give you the possibility to import more, buy and/or create your own indicators.

An algorithm that automatically gives trading orders if certain conditions are met. For example, go short if the 12-minute price average becomes higher than the 24-minute price average or go long if the price rises by over 2% in 1 minute. Most platforms will give you the possibility to import or buy Expert Advisors and/or create your own.


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