Forex Market Terminology
The currency against which other currencies are quoted. Example, the primary base currency is the u.s. dollar.
A market in which prices decline
sharply against a background of widespread pessimism (opposite of Bull
Market). Bear Markets are generally shorter in duration than Bull
The rate at which a dealer is
willing to buy the base currency.
A market characterized by rising
An agent who handles investors'
orders to buy and sell currency.
The customer or bank with which a
foreign exchange deal is executed.
An exchange rate between two
currencies, usually constructed from the individual exchange rates of
the two currencies, measured against the United States dollar.
Refers to opening and closing the
same position or positions before the close of that day's trading
Flat / Square
Where a Client has not traded in
that currency or where an earlier deal is reversed thereby creating a
neutral (flat) position. Example: bought $100,000 then sold $100,000 =
An abbreviation of foreign
Analysis based on economic
"Good Till Cancelled."
An order left with a Dealer to buy or sell at a fixed price. The order
remains in place until it is cancelled by the client.
The FX rates large international
banks quote other large international banks. Normally the public and
other businesses do not have access to these rates. Global Forex is one
of the few companies able to provide clients with rates provided by
multiple global banks.
An order given which has
restrictions upon its execution, where the client may specify a price
and the order can be executed only if the market reaches that price.
A market position where the
Client has bought a currency he previously did not own. Normally
expressed in base currency terms. For example: long Dollars (short
Margin is a cash deposit provided
by clients as collateral to cover possible future losses that may result
from the clients Foreign Exchange trades.
A demand for additional funds. A
requirement by a clearing house that a clearing member (or by a
brokerage firm that a client) brings margin deposits up to a required
minimum level to cover an adverse movement in price in the market.
The rate at which a Dealer is
willing to sell the base currency.
Any deal which has not been
offset or reversed by an equal and opposite deal.
Pip or Points
Depending on context, normally
one basis point, i.e. 0.0001.
A market position where the
Client has sold a currency he does not already own. Normally expressed
in base currency terms, example, short Dollars (long D. Marks).
The difference in prices between
bid and offer rates.
Stop Loss Order
An order to buy or sell at the
market when a particular price is reached, either above or below the
price that prevailed when the order was given.
Analysis based on market action
through chart study, moving averages, volume, open interest, formations,
and other technical indicators.
A measure of price fluctuations.