of financial markets around the world without buying or selling the underlying asset directly. They provide the opportunity to make profits (or losses) from a wide range of markets including equities, indices, currencies and commodities. CFDs can be used to speculate on upward or downward price movements, making them a flexible alternative to traditional trading. Low commissions No Stamp Duty Go Long and Short Margin Trading Wide Range of Global Markets Benefits of Forex Trading Forex trading is the simultaneous buying of one currency and selling of another. Currencies are quoted in pairs eg Euro vs. US Dollar. When one currency increases in value it means it strengthens against another and the value of the other decreases. Forex trading is a popular way to trade on financial markets as it is a true 24 hour market. 24 Hour Market Greater Liquidity % Margin Click Dealing Wide Range of Currency Pairs Benefits of Spread Betting Spread betting is a fast-moving, flexible way to trade the price movements of financial markets without holding the underlying investments directly. Regardless of the direction that markets move, you can take a position to gain exposure to this movement for a fraction of the capital outlay required to trade the market directly. Tax Free* No Commission Go Long and Short Margin Trading Wide range of Markets
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Fed (Federal Reserve) the main regulatory body of the United States of America financial system, which division FOMC (Federal Open Market Committee) regulates, among other things, federal interest rates. Fibonacci Retracements the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range. Flat (Square) neutral state when all your positions are closed. Fundamental Analysis the analysis based only on news, economic indicators and global events. Gap a difference between the previous period's close price and the next period's open price. In Forex usually only occurs during weekends between the Friday's close and the Monday's open price. GDP (Gross Domestic Product) is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators. GTC (Good Till Canceled) order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation. Hedging maintaining a market position which secures the existing open positions in the opposite direction. Jobber a slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight. Kiwi a Forex slang name for the New Zealand currency New Zealand dollar. Leading Indicators a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity. Limit Order order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price. Liquidity the measure of markets which describes relationship between the trading volume and the price change. Long the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short. Loss the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it. Lot definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).
Margin money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading. Margin Account account which is used to hold investor's deposited money for FOREX trading. Margin Call demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum. Market Order order to buy or sell a lot for a current market price. Market Price the current price for which the currency is traded for on the market. Momentum the measure of the currency's ability to move in the given direction. Moving Average (MA) one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods. Offer (Ask) price of the offer, the price you buy for. Open Position (Trade) position on buying (long) or selling (short) for a currency pair. Order order for a broker to buy or sell the currency with a certain rate. Percentage Allocation Management Module (PAMM) a broker-side system that allows investor to invest with traders, and allows traders to manage investors' funds using the broker's platform. Pivot Point the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices. Pip (Point) the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001). Profit (Gain) positive amount of money gained for closing the position. Principal Value the initial amount of money of the invested. Realized Profit/Loss gain/loss for already closed positions. Resistance price level for which the intensive selling can lead to price increasing (up-trend). RSI (Relative Strength Index) indicator that measures of the power of direction price movement by comparing the bullish and bearish portions of the trend. Scalping a style of trading notable by many positions that are opened for extremely small and shortterm profits. Settled (Closed) Position closed positions for which all needed transactions has been made. SL see Stop-Loss Order.
Slippage execution of order for a price different than expected (ordered), main reasons for slippage are "fast" market, low liquidity and low broker's ability to execute orders. Spread difference between ask and bid prices for a currency pair. Standard Lot 100,000 units of the base currency of the currency pair, which you are buying or selling. Stop-Limit Order an order to sell or buy a lot for a certain price or worse. Stop-Loss Order an order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order. STP (Straight Through Processing) an order processing that doesn't require any manual intervention and is fully automatic. In fact, 99.9% of all on-line Forex brokers support order handling with STP. Support price level for which intensive buying can lead to the price decreasing (down-trend). Swap overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive. Take-Profit Order an order to sell or buy a lot when the market reaches certain price. It is used to fixate your profit. Usually is a combination of stop-order and limit-order. Technical Analysis the analysis based only on the technical market data (quotes) with the help of various technical indicators. TP see Take-Profit Order. Trend direction of market which has been established with influence of different factors. Unrealized (Floating) Profit/Loss a profit/loss for your non-closed positions. Useable Margin amount of money in the account that can be used for trading. Used Margin amount of money in the account already used to hold open positions open. Volatility a statistical measure of the number of price changes for a given currency pair in a given period of time. VPS (Virtual Private Server) virtual environment hosted on the dedicated server, which can be used to run the programs independent on the user's PC. Forex traders use VPS to host trading platforms and run expert advisors without unexpected interruptions.
Trading Terms:
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