Forex eBook

Forex Glossary M

Forex Word Meaning
MarginThe required equity that an investor must deposit to collateralize a position.
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.
Margin DepositThe margin deposit is not a down payment on a purchase of equity, as many perceive margins to be in the stock markets. Rather, the margin is a performance bond, or good faith deposit, to ensure against trading losses. The margin requirement allows traders to hold a position much larger than the account value, which allow for this high leverage. In the event that funds in the account fall below margin requirements, brokerage firms will automatically close all open positions.
Market Orderorder 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.
Margin callA request from a broker or dealer for additional funds or other collateral to guarantee performance on a position that has moved against the client. If the equity balance in your account falls below the margin requirement, a margin call will be generated. In the event that an account exceeds its maximum allowable leverage, ALL open positions are liquidated immediately, regardless of the size or the nature of positions held within the account.
Market MakerA dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial instrument.
Market RiskExposure to changes in market prices.
Mark-to-MarketProcess of re-evaluating all open positions with the current market prices. These new values then determine margin requirements.
MaturityThe date for settlement or expiry of a financial instrument.
Margin Account account which is used to hold investor's deposited money for FOREX trading.
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