Trading with currencies

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Forex Market


Please support this idea with LIKE if you find it useful. Price formed a Rising Wedge pattern. We are approaching to the Horizontal Resistance Zone and if there is a confirmed rejection we can initiate a short position. Another sell can be initiated only if we have a confirmed breakout of the Ichi Cloud support zone Thank you for reading this idea! Hope it’s.

The price has broken a strong resistance line and is now moving up. I think the movement will continue to the resistance level of 1.114.

Please support this idea with LIKE if you find it useful. Price is inside of the Symmetrical Triangle. Overall we have a downtrend and the price is more likely to be rejected by Resistance Trenline, also Ichi Cloud resistance zone. In case we have a confirmed rejecteion we can initiate a short position. Also if there is a confirmed breakout of the Symmetrical.

We could see how the price rose after the breaking Triangle. It is in the next Triangle at the time and if it will cross the higher border we can open Buy to 1.09699. Potential profit will be 3 times bigger than the risk. Push like if you think this is a useful idea! Before to trade my ideas make your own analysis. Write your comments and questions here! Thanks.

Friends, please support my free works by clicking LIKE button. Reasons: – Price trades in Rising Wedge – Resistance level is 1700 $ – Support level 1640 $ – I think price may continue to grow from Support Level – But if price will break support level then we can open short – To open position only after setup which you personally trade – Always do your own.

Friends, please support my free works by clicking LIKE button. Reasons: – Price bounced from Support Level from yesterday idea – Support Level 1.0830 $ – Current resistance Level 1.0930 $ – I think price may continue to grow at least to resistance level – To open position only after setup which you trade – Always do your own research before opening positions and.

Following yesterday post, long bias remain intake as long as price traded above 1.0800 region. Link to my yesterday ideas attach below. _________________________________________________________________________________________________________________________________________ Traders! if you like my ideas and do take the same trade, please write it in comment so we.

GBPUSD formed the bottom Now moving in the horizontal correction channel Daily chart Best regards EXCAVO

GBPUSD also went great. The price reached the resistance line and again fell to the support line. I expect another such repeated movement.

67.635 daily resistance level has been tested two times and for the third time’s price forming a potential double top formation, we might have a chance to go short if the seller manages to hold and push the price to the 65.52 support level (target price). good luck! **Disclaimer** the content on this analysis is subject to change at any time without notice, and.

As was predicted in the previous analyte, the price reached the resistance line. And now I expect the departure to the support line 0.866

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Price traded slightly below 0.97500 region where technically its the recent support turn in to resistant level, with the short bias remain intake we are waiting for the breakout of the ascending trend line to go short again.

Following yesterday idea, today if we can see all Oil cartels agree on global supply cut we can expect Cad will receive major volumes. _________________________________________________________________________________________________________________________________________ Traders! if you like my ideas and do take the same trade, please write it in comment so we.

A week ago, the price reached the resistance line. Now I expect GBPNZD to fall to a strong support line, after which it will again show growth. We wait until the price reaches 2.041 and open “Buy”.

Plan : support level breakout –> wait for the price to bounce off from resistance level (previous support level) –> wait for the rejection candle pattern to form e.g. bearish engulfing, pinbar, etc –> SELL **Disclaimer** the content on this analysis is subject to change at any time without notice, and is provided for the sole purpose of assisting traders to.

Hey, Friends. Before the start to talk on analysis, request to share you love by giving LIKES and comments. Parallel channel expected break-down. Selling in pullback is best opportunity to grab profit on this pair. The projection is mentioned at the chat for future prediction. —————————————-(Weekly.

EURGBP is next to a good support area, which consists of two support lines and a support level of 0.8735. I expect growth from this zone to the resistance line.

GBPUSD has reached a strong resistance line (our target since last forecast). I expect a fall to the support line.


Currencies are traded on the Foreign Exchange market, also known as Forex. This is a decentralized market that spans the globe and is considered the largest by trading volume and the most liquid worldwide. Exchange rates fluctuate continuously due to the ever changing market forces of supply and demand. Forex traders buy a currency pair if they think the exchange rate will rise and sell it if they think the opposite will happen. The Forex market remains open around the world for 24 hours a day with the exception of weekends.

Before the Internet revolution only large players such as international banks, hedge funds and extremely wealthy individuals could participate. Now retail traders can buy, sell and speculate on currencies from the comfort of their homes with a mouse click through online brokerage accounts. There are many tradable currency pairs and an average online broker has about 40. One of our most popular chats is the Forex chat where traders talk in real-time about where the market is going.

The Top 5 Most Traded Currencies in the World

The most traded currency in the world is the US Dollar (USD). According to the Bank for International Settlements, the USD accounts for a daily average volume of $2.2 trillion.

When it comes to forex trading, we know that currencies are all traded in pairs.

While EUR/USD tops the most traded currency pairs, let’s break things down a little more and individually go over the most “heavily” traded currencies in the world.

The top 5 most traded currencies in the world are:

  1. US Dollar (USD),
  2. Euro (EUR),
  3. Japanese Yen (JPY),
  4. Great British Pound (GBP),
  5. Australian Dollar (AUD).

Here we’ve analysed each individual currency in detail, issuing a fact sheet on each to explain the factors that are most likely to influence its price.

1. US Dollar (USD)

The official currency of the United States of America, the US Dollar is also the world’s primary reserve currency.

The US Dollar comes in at number 1 on our list of the most traded currencies in the world, thanks to 87% of all currency trades involving the Greenback.

US Dollar Fact Sheet

Abbreviation: USD
Symbol: $ or US $
Nickname: Greenback
Most traded currency pair: EUR/USD
Most active trading session: New York and London sessions

Fun Fact: Then first US Dollar paper banknote was printed back in 1862. This was due to there being a shortage of coins at the time, with paper providing the quick fix required.

The most used currency in the world is the US Dollar

Issued by the Federal Reserve (the Fed), the US Dollar is the official currency of the United States of America.

Most traded currency. The US Dollar is the most traded currency in terms of daily average volume. According to the Bank for International Settlements, the USD has a daily trade volume of $2.2 trillion.

Global reserve currency. The US Dollar is also considered as the top global reserve currency. This means that it’s held by central and commercial banks throughout the world for the purpose of both investments and daily transactions.

Commodities priced in USD. When trading commodities such as gold, their tradable markets are priced in US Dollars as standard. On your forex trading platform, you can see this in action by opening up an XAU/USD market.

The United States of America is the world’s largest economy and USD price largely hinges on economic performance back home.

However, the global nature of the Greenback means there are also many external factors at play.

2. Euro (EUR)

The second widely traded currency is the Euro.

The Euro is the official currency used by 19 of the 27 member states of the European Union.

Euro Fact Sheet

Abbreviation: EUR
Symbol: €
Nickname: Fiber
Most traded currency pair: EUR/USD
Most active trading session: London and New York sessions

Fun Fact: When the EU was first created, only 12 countries used the Euro. The pioneer nations to first adopt the Euro were Germany, France, Luxembourg, Spain, Portugal, Austria, Ireland, Belgium, Finland, Greece, Italy and the Netherlands.

The second most traded currency in the world is the Euro

Issued by the European Central Bank, the Euro is the official currency of 19 members of the EU, allowing simple cross border transactions.

Volumes. According to the Bank for International Settlements, the Euro accounts for a daily average volume upwards of $800 million. The fact they denominate volume in USD however, highlights the Euro’s number 2 status.

Monetary policy issues. There are both pros and cons of a single, cross border currency adopted by multiple economies. The ability to pay for goods and services in different countries without the need to exchange currencies is a huge plus, but drawbacks include ceding control of monetary policy for the greater good of the entire block.

We recently saw an example of the above issue arise in Greece, where they were unable to devalue their currency to avoid a default.

While it’s been in existence for over 20 years now, the Euro remains largely a giant economic experiment that we continue to watch in awe.

3. Japanese Yen (JPY)

The Japanese Yen is the official currency of Japan and comes in third on our list of the most traded currencies in the world.

With a daily average volume of $550+ million (according to the Bank for International Settlements), the Yen also makes up 4.9% of global currency reserves.

Japanese Yen Fact Sheet

Abbreviation: JPY
Symbol: ¥
Nickname: Yen
Most traded currency pair: USD/JPY
Most active trading session: New York and Asian sessions

Fun Fact: The word “yen” means “circle” or “round object” in Japanese. Picture the shape of a standard coin and you’ll soon get why this was chosen!

The third most “heavily” traded currency in the world is the Japanese Yen

Issued by the Bank of Japan (BoJ), the Yen is considered a safe haven currency due to Japan’s ultra-low interest rates, low debt and high trade surplus providing stability.

Carry trade. The Japanese Yen drives the global carry trade. Investors borrow Yen at low interest rates and re-invest in higher yielding currencies offshore. By doing this, they lock in higher interest profit on their investment, than what they’re paying on the loan.

Safe haven status. The Yen is known as a safe haven currency. This is because during times of financial market volatility and fear, investors shed their riskier, high yielding assets and cover their currency positions in the lower yielding, yet more stable Japanese Yen.

With the global currency market landscape undergoing a transformation due to the prevalence of ultra-low interest rates, it will be interesting to see whether the Yen can maintain its safe haven status.

These are uncharted waters and only time will tell when it comes to the evolution of trading the Yen.

4. Great British Pound (GBP)

The official currency of the United Kingdom and its territories, the GBP is known colloquially as the Pound Sterling.

The UK is also the largest hub for forex trading, with the London trading session accounting for over 40% of daily turnover.

Great British Pound Fact Sheet

Abbreviation: GBP
Symbol: £
Nickname: Cable
Most traded currency pair: GBP/USD
Most active trading session: London and New York sessions

Fun Fact: The Pound Sterling is the oldest surviving independent currency. It’s history can be traced back to as early as 775AD in Anglo-Saxon England, when it was used as an equivalent to 1 pound weight of silver.

The fourth most important currency in the world is the Great British Pound

Issued by the Bank of England, the Pound is an iconic currency that plays an integral part within the institutional forex trading Hub of London.

By the numbers. The Great British Pound is the fourth most traded currency globally, with an average daily turnover of $325+ million (according to the Bank for International Settlements). GBP is also another major global reserve currency, trusted by foreign central banks for its stability.

Brexit uncertainty. The Brexit referendum has changed the global currency landscape for good. While the vote was held in 2020, it has taken years of political wrangling between the UK and Europe to get where we are now in 2020.

We now wait to see whether British politicians can negotiate a hard or soft Brexit.

The outcome of which, will no doubt determine the direction of GBP trading into the next decade and beyond.

5. Australian Dollar (AUD)

The Australian Dollar is the official currency of the Commonwealth of Australia.

According to the Bank for International Settlements, the Aussie Dollar is the 5th most traded currency in the world, mostly via the AUD/USD currency pair.

Australian Dollar Fact Sheet

Abbreviation: AUD
Symbol: $ or AU $
Nickname: Aussie
Most traded currency pair: AUD/USD
Most active trading session: Asian and New York sessions

Fun Fact: From 1910 to 1966, the official currency of Australia was the Australian Pound. 1 Australian Pound was made up of 20 Shillings, with each Shilling made up of 12 Pence.

It is issued by the Reserve Bank of Australia and is also used by a number of Australian territories and Pacific Island nations that aren’t large enough to require their own monetary policy.

Commodity currency. The Australian Dollar is known primarily as a commodity currency. This is due to Australia being a major exporter of commodities such as coal and iron ore. As a result, commodity prices and global demand have a strong influence on the price of the Aussie.

Reliance on China. As the country’s largest trading partner, the Australian economy is strongly reliant on the Chinese economy. If Chinese demand for Australian exports rise, then demand for the Australian Dollar is going to increase price with it. However, keep in mind that the opposite is also true.

While just missing out on a place in the top 5 most traded currencies in the world, the Canadian Dollar is another commodity currency in the ilk of the AUD.

Where the price of the Australian Dollar tends to mirror fluctuations in iron ore due to Australia’s reliance on exports, the Canadian Dollar similarly mirrors the price of oil.

List of the 20 most traded currencies

A more extensive list of the most traded currencies in the world, can be found within the following table:

# Currency Share of turnover (%)
1 US Dollar 87.62
2 Euro 31.27
3 Japanese Yen 21.56
4 Great British Pound 12.78
5 Australian Dollar 6.94
6 Canadian Dollar 5.13
7 Swiss Franc 4.73
8 Chinese Renminbi 3.97
9 Swedish Krona 2.22
10 Mexican Peso 2.20
11 New Zealand Dollar 2.06
12 Singapore Dollar 1.79
13 Hong Kong Dollar 1.73
14 Norwegian Krone 1.67
15 South Korean Won 1.65
16 Turkish Lira 1.40
17 Indian Rupee 1.14
18 Russian Ruble 1.14
19 Brazilian Real 1.00
20 South African Rand 1.00

Taking Advantage of the Most Traded Currencies in the World

So how might a forex trader take advantage of this list of most commonly traded currencies?

Choosing to trade a more liquid market, will allow you to more effectively manage risk. This is because a liquid market with supply/demand at every price level will ensure price action is smooth and gap-free.

Make sure you’re trading a forex currency pair that features the currencies featured in this list.

Currency Trading – A Low-Risk Way to Trade Currencies

I recently wrote about how to get into currency trading with your eyes open. Now I want to talk about some of the advantages of trading currencies on an exchange rather than through a forex broker. I also want to talk about some strategies I use when trading currencies.

The Exchange Advantage

The key benefits to trading on an exchange are transparency and security of your funds. The exchanges take no principal position against their order flow. Every trade is reflected right there for everyone to see.

Every trade that takes place on an exchange such as the Chicago Mercantile Exchange (CME) is guaranteed by the exchange. Even if the counterparty on the other side of the trade were a Lehman Brothers and goes bust, the exchange will make good on your positions.

Up until a few years ago, I would have given this less credence as a real advantage. But we have seen some massive financial names flame out: Refco, Bear Stearns and Lehman Brothers were all organizations considered too big to fail.

For the most dynamic, highly leveraged day trading, though, going through forex brokers still has an edge over the exchanges, with the key decider really being the amount of leverage one can employ. Forex offers 100-to-1 leverage and, in some instances, as high as 200-to-1.

CME currency contracts typically offer leverage ratios in the 20-to-1 range, and you have to pay commissions. Forex trades are commission-free. However, forex can end up costing you more, as brokers get compensated via the bid/ask spread.

The exchanges, specifically the CME, are more individual-investor-friendly, in my opinion.

A Low Risk Way to Trade Currencies

Just recently, the CME launched a series of new currency pair contracts called E-Micros. They are a truly revolutionary financial product.

Each E-Micro contract is one-tenth the size of a standard currency pair. (Currencies are traded in pairs — that is, going long one and selling another against it.)

A big fear for novice investors just starting out with futures is that they might get saddled with a couple of hundred thousands gallons of heating oil or have to come up with millions to cover bad currency trades.

The E-Micro currency contracts are typically for $10,000 to $12,500 worth of the underlying currency. This is a far cry from normal-sized $100,000 to $125,000 contracts.

The other advantage is that the margin requirements on the Micros are very low, ranging between $300 and $600 per contract.

For someone looking for a very low-risk way to enter the world of currencies, the CME’s new E-Micro contracts are an excellent tool. If you are totally wrong, you are not going to get killed on a one-lot position of an E-Micro currency contract. These contracts take a lot of the fear factor out of currency trading.

Whenever you are trading something new, you want to trade the smallest size possible until you get comfortable. E-Micros are the perfect product for the budding currency trader. The CME even offers free real-time quotes on their currency pairs.

If you are thinking about currency trading, I would strongly recommend using the E-Micro product as means to get your feet wet first before attempting to employ more-advanced, highly leveraged strategies on forex.

Leverage by itself isn’t either good or bad, the same way a gun isn’t either good or bad. It’s all in the application of the tool.

A Little Leverage Goes a Long Way

If I’m day trading, using very narrow stops, then I’m going to want as much leverage as possible. And this makes forex much more attractive for me for those types of trades.

If I’m position trading, or following trends, then I’m going to want to be on a recognized exchange for a number of reasons — the most important being that, when I position trade, I can maintain my position for many months at a time. By being on an exchange, I virtually eliminate counterparty risk.

When you follow trends, you will also typically use a wider stop than when you day trade. When trend-trading, I’ll typically risk between 1% and 2% of my total equity per trade. I would never risk that much when I’m day trading with 100-to-1 leverage. Even a minor price shock could wipe me out.

When day trading with massive leverage, you want to be in and out of most of your position within seconds. You want to have a very firm idea of where the key intraday retracement levels are. (A retracement is a price reversal that goes against the current trend.)

This isn’t easy to figure out, but its also not rocket science either. All it takes is some solid research.

Track the ‘True Range’ of the Trend

I’ll share a quick strategy with you that I use.

I keep track of the 20-day Average True Range (ATR), an indicator that measures volatility, of each of the currencies (and other futures) I trade. The 20-day ATR tells me what the average overall movement of the underling security has been over the last 20 days.

Key intraday retracements typically occur as a percentage of a two-ATR reading.

Let’s say a currency has an ATR of 40 pips. (“Pips” are the smallest units of measurement that currencies are traded by. For example, if the euro’s bid/ask spread is quoted at 1.4755 by 1.4757, then it would have a two-pip spread.)

This tells me that, on an average day, the currency will have a 40-pip range between yesterday’s and today’s high and low.

Trading With a Currency’s Trend

When a currency is trending, either up or down, you will get contra-trend moves. These are moves that happen in the opposite (contra) direction of the primary trend, and they serve to shake out the weak hands.

These moves are typically (but not always) a fraction of a two-ATR movement.

Usually a currency (or any other future) that is trending in a single direction won’t experience an entire two-ATR move in an opposite direction to its underlying trend, unless the primary trend is changing direction.

It’ll get very close on occasion, but typically it won’t experience a two-ATR reversal.

When I find a currency that is trending and I’m looking to day trade it, the first thing I do is look at the last few months’ worth of price data and see what the maximum contra-ATR movement has been. Again, I’m looking for the max ATR movement that goes against the primary trend.

Usually, the typical retracement is around 75% of the two-ATR figure before the primary trend reasserts itself.

It’s going to be different for every financial instrument. For some futures, a percentage of three-ATR works better than two-ATR. It just depends upon the trading history of the underlying.

Setting up the Position

Anyway, when I see the pullback occur, I buy it once it hits the threshold that has held up in the past. I have my stop-loss just fractionally below this point. If the currency/futures contract that I’m trading bounces, then “happy days,” because I’ll probably see an almost-full two-ATR move higher intraday.

As the position moves in my favor, I rapidly reduce my leverage level. And as long as it’s acting right, I’ll carry a piece of the position for the entire trading day. If, however, it hits my stop, then I just get out and move on to the next trade.

As a word of warning, I would not suggest that this strategy be the basis of your entire trading methodology. It’s just one strategy. I like to use this approach as a method to lower my overall cost basis when I am position trading a long-term uptrend or downtrend.

Trend-following investors make some of the biggest money in futures trading. However trend-following can also be a little bit boring. Also, when futures aren’t trending, you can whipsawed for months at a time, which can lead to pretty serious drawdowns.

Feed Your Inner ‘Action Junkie’ With Currencies

Retracement trading around a core trend position can be very exciting and extremely profitable. So long as you don’t overload your retracement position-sizing so that it engulfs your core position trade, it’s a great way to lower the holding cost of your core position while also having the extra added benefit of feeding one’s inner “action junkie” without wrecking your account.

As traders, we have to make our personality drawbacks work for us. I’ve seen plenty of irrational and emotional people make millions through trading. The key for these folks was not in berating themselves for being what they thought they should be.

No — the key to success for these people was making their shortcomings work for them rather than against them.

Trend-following requires a large amount of discipline that very few people can muster up. Marrying a retracement strategy to a trend-following strategy is a great way to put your inner action junkie to work for you instead of against you.

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Forex Glossary

The price at which the market is prepared to sell a product. Prices are quoted two-way as Bid/Ask. The Ask price is also known as the Offer.

In FX trading, the Ask represents the price at which a trader can buy the base currency, shown to the left in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the Ask price is 1.4532, meaning you can buy one US dollar for 1.4532 Swiss francs.

In CFD trading, the Ask also represents the price at which a trader can buy the product. For example, in the quote for UK OIL 111.13/111.16, the product quoted is UK OIL and the Ask price is £111.16 for one unit of the underlying market.*

At best An instruction given to a dealer to buy or sell at the best rate that can be obtained at a specific time. At or better An instruction given to a dealer to buy or sell at a specific price or better. AUS 200 A term for the Australian Securities Exchange (ASX 200), which is an index of the top 200 companies (by market capitalization) listed on the Australian stock exchange. Aussie Refers to the AUD/USD (Australian Dollar/U.S. Dollar) pair. Also “Oz” or “Ozzie”.

A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which is marked with a horizontal line to the left of the bar; and the closing price, which is marked with a horizontal line to the right of the bar.

Barrier level A certain price of great importance included in the structure of a Barrier Option. If a Barrier Level price is reached, the terms of a specific Barrier Option call for a series of events to occur. Barrier option Any number of different option structures (such as knock-in, knock-out, no touch, double-no-touch-DNT) that attaches great importance to a specific price trading. In a no-touch barrier, a large defined payout is awarded to the buyer of the option by the seller if the strike price is not ‘touched’ before expiry. This creates an incentive for the option seller to drive prices through the strike level and creates an incentive for the option buyer to defend the strike level. Base currency The first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF (U.S. Dollar/Swiss Franc) rate equals 1.6215, then one USD is worth CHF 1.6215. In the forex market, the US dollar is normally considered the base currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair. The primary exceptions to this rule are the British pound, the euro and the Australian dollar. Base rate The lending rate of the central bank of a given country. Basing A chart pattern used in technical analysis that shows when demand and supply of a product are almost equal. It results in a narrow trading range and the merging of support and resistance levels. Basis point A unit of measurement used to describe the minimum change in the price of a product. Bearish/Bear market Negative for price direction; favoring a declining market. For example, “We are bearish EUR/USD” means that we think the euro will weaken against the dollar. Bears Traders who expect prices to decline and may be holding short positions. Bid/ask spread The difference between the bid and the ask (offer) price. Bid price The price at which the market is prepared to buy a product. Prices are quoted two-way as Bid/Ask. In FX trading, the Bid represents the price at which a trader can sell the base currency, shown to the left in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the Bid price is 1.4527, meaning you can sell one US Dollar for 1.4527 Swiss francs. In CFD trading, the Bid also represents the price at which a trader can sell the product. For example, in the quote for UK OIL 111.13/111.16, the Bid price is £111.13 for one unit of the underlying market.* Big figure Refers to the first three digits of a currency quote, such as 117 USD/JPY or 1.26 in EUR/USD. If the price moves by 1.5 big figures, it has moved 150 pips. BIS The Bank for International Settlements located in Basel, Switzerland, is the central bank for central banks. The BIS frequently acts as the market intermediary between national central banks and the market. The BIS has become increasingly active as central banks have increased their currency reserve management. When the BIS is reported to be buying or selling at a level, it is usually for a central bank and thus the amounts can be large. The BIS is used to avoid markets mistaking buying or selling interest for official government intervention. Black box The term used for systematic, model-based or technical traders. Blow off The upside equivalent of capitulation. When shorts throw in the towel and cover any remaining short positions. BOC Bank of Canada, the central bank of Canada. BOE Bank of England, the central bank of the UK. BOJ Bank of Japan, the central bank of Japan. Bollinger bands A tool used by technical analysts. A band plotted two standard deviations on either side of a simple moving average, which often indicates support and resistance levels. Bond A name for debt which is issued for a specified period of time. Book In a professional trading environment, a book is the summary of a trader’s or desk’s total positions. British Retail Consortium (BRC) shop price index A British measure of the rate of inflation at various surveyed retailers. This index only looks at price changes in goods purchased in retail outlets. Broker An individual or firm that acts as an intermediary, bringing buyers and sellers together for a fee or commission. In contrast, a dealer commits capital and takes one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. Buck Market slang for one million units of a dollar-based currency pair, or for the US dollar in general. Bullish/Bull market Favoring a strengthening market and rising prices. For example, “We are bullish EUR/USD” means that we think the euro will strengthen against the dollar. Bulls Traders who expect prices to rise and who may be holding long positions. Bundesbank Germany’s central bank. Buy Taking a long position on a product. Buy dips Looking to buy 20-30-pip/point pullbacks in the course of an intra-day trend.

One of approximately five times during the forex trading day when a large amount of currency must be bought or sold to fill a commercial customer’s orders. Typically these times are associated with market volatility. The regular fixes are as follows (all times NY):

10:00am – WMHCO (World Market House Company)

11:00am – WMHCO (World Market House Company) – more important

Flat or flat reading Economic data readings matching the previous period’s levels that are unchanged. Flat/square Dealer jargon used to describe a position that has been completely reversed, e.g. you bought $500,000 and then sold $500,000, thereby creating a neutral (flat) position. Follow-through Fresh buying or selling interest after a directional break of a particular price level. The lack of follow-through usually indicates a directional move will not be sustained and may reverse. FOMC Federal Open Market Committee, the policy-setting committee of the US Federal Reserve. FOMC minutes Written record of FOMC policy-setting meetings are released three weeks following a meeting. The minutes provide more insight into the FOMC’s deliberations and can generate significant market reactions. Foreign exchange/forex/FX The simultaneous buying of one currency and selling of another. The global market for such transactions is referred to as the forex or FX market. Forward The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based on the interest rate differential between the two currencies involved. Forward points The pips added to or subtracted from the current exchange rate in order to calculate a forward price. FRA40 A name for the index of the top 40 companies (by market capitalization) listed on the French stock exchange. FRA40 is also known as CAC40. FTSE 100 The name of the UK 100 index. Fundamental analysis The assessment of all information available on a tradable product to determine its future outlook and therefore predict where the price is heading. Often non-measurable and subjective assessments, as well as quantifiable measurements, are made in fundamental analysis. Funds Refers to hedge fund types active in the market. Also used as another term for the USD/CAD (U.S. Dollar/Canadian Dollar) pair. Future An agreement between two parties to execute a transaction at a specified time in the future when the price is agreed in the present. Futures contract An obligation to exchange a good or instrument at a set price and specified quantity grade at a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange- Traded Contacts – ETC), versus Forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange.

Illiquid Little volume being traded in the market; a lack of liquidity often creates choppy market conditions.

Illiquid Little volume being traded in the market; a lack of liquidity often creates choppy market conditions.

IMM International Monetary Market, the Chicago-based currency futures market, that is part of the Chicago Mercantile Exchange. IMM futures A traditional futures contract based on major currencies against the US dollar. IMM futures are traded on the floor of the Chicago Mercantile Exchange. IMM session 8:00am – 3:00pm New York. INDU Abbreviation for the Dow Jones Industrial Average. Industrial production Measures the total value of output produced by manufacturers, mines and utilities. This data tends to react quickly to the expansions and contractions of the business cycle and can act as a leading indicator of employment and personal income data. Inflation An economic condition whereby prices for consumer goods rise, eroding purchasing power. Initial margin requirement The initial deposit of collateral required to enter into a position. Interbank rates The foreign exchange rates which large international banks quote to each other. Interest Adjustments in cash to reflect the effect of owing or receiving the notional amount of equity of a CFD position. Intervention Action by a central bank to affect the value of its currency by entering the market. Concerted intervention refers to action by a number of central banks to control exchange rates. Introducing broker A person or corporate entity which introduces accounts to a broker in return for a fee. INX Symbol for S&P 500 index. IPO A private company’s initial offer of stock to the public. Short for initial public offering. ISM manufacturing index An index that assesses the state of the US manufacturing sector by surveying executives on expectations for future production, new orders, inventories, employment and deliveries. Values over 50 generally indicate an expansion, while values below 50 indicate contraction. ISM non-manufacturing An index that surveys service sector firms for their outlook, representing the other 80% of the US economy not covered by the ISM Manufacturing Report. Values over 50 generally indicate an expansion, while values below 50 indicate contraction.

In CFD trading, the Ask represents the price a trader can buy the product. For example, in the quote for UK OIL 111.13/111.16, the product quoted is UK OIL and the ask price is £111.16 for one unit of the underlying market.*

Offered If a market is said to be trading offered, it means a pair is attracting heavy selling interest, or offers. Offsetting transaction A trade that cancels or offsets some or all of the market risk of an open position. On top Attempting to sell at the current market order price. One cancels the other order (OCO) A designation for two orders whereby if one part of the two orders is executed, then the other is automatically cancelled. One touch An option that pays a fixed amount to the holder if the market touches the predetermined Barrier Level. Open order An order that will be executed when a market moves to its designated price. Normally associated with good ’til cancelled orders. Open position An active trade with corresponding unrealized P&L, which has not been offset by an equal and opposite deal. Option A derivative which gives the right, but not the obligation, to buy or sell a product at a specific price before a specified date. Order An instruction to execute a trade. Order book A system used to show market depth of traders willing to buy and sell at prices beyond the best available. Over the counter (OTC) Used to describe any transaction that is not conducted via an exchange. Overnight position A trade that remains open until the next business day.

A rollover is the simultaneous closing of an open position for today’s value date and the opening of the same position for the next day’s value date at a price reflecting the interest rate differential between the two currencies.

In the spot forex market, trades must be settled in two business days. For example, if a trader sells 100,000 Euros on Tuesday, then the trader must deliver 100,000 Euros on Thursday, unless the position is rolled over. As a service to customers, all open forex positions at the end of the day (5:00 PM New York time) are automatically rolled over to the next settlement date. The rollover adjustment is simply the accounting of the cost-of-carry on a day-to-day basis. Learn more about’s rollover policy

Round trip A trade that has been opened and subsequently closed by an equal and opposite deal. Running profit/loss An indicator of the status of your open positions; that is, unrealized money that you would gain or lose should you close all your open positions at that point in time. RUT Symbol for Russell 2000 index.

The time remaining until a contract expires.

Tokyo session 09:00 – 18:00 (Tokyo). Tomorrow next (tom/next) Simultaneous buying and selling of a currency for delivery the following day. T/P Stands for “take profit.” Refers to limit orders that look to sell above the level that was bought, or buy back below the level that was sold. Trade balance Measures the difference in value between imported and exported goods and services. Nations with trade surpluses (exports greater than imports), such as Japan, tend to see their currencies appreciate, while countries with trade deficits (imports greater than exports), such as the US, tend to see their currencies weaken. Trade size The number of units of product in a contract or lot. Trading bid A pair is acting strong and/or moving higher; bids keep entering the market and pushing prices up. Trading halt A postponement to trading that is not a suspension from trading. Trading heavy A market that feels like it wants to move lower, usually associated with an offered market that will not rally despite buying attempts. Trading offered A pair is acting weak and/or moving lower, and offers to sell keep coming into the market. Trading range The range between the highest and lowest price of a stock usually expressed with reference to a period of time. For example: 52-week trading range. Trailing stop A trailing stop allows a trade to continue to gain in value when the market price moves in a favorable direction, but automatically closes the trade if the market price suddenly moves in an unfavorable direction by a specified distance. Placing contingent orders may not necessarily limit your losses. Transaction cost The cost of buying or selling a financial product. Transaction date The date on which a trade occurs. Trend Price movement that produces a net change in value. An uptrend is identified by higher highs and higher lows. A downtrend is identified by lower highs and lower lows. Turnover The total money value or volume of all executed transactions in a given time period. Two-way price When both a bid and offer rate is quoted for a forex transaction. TYO10 Symbol for CBOE 10-Year Treasury Yield Index.

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