Forex eBook

Forex Glossary S


Forex Word Meaning
SettlementThe process by which a trade is entered into the books and records of the counterparts to a transaction. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another.
Short PositionAn investment position that benefits from a decline in market price. When one sells a currency their position is short.
Spot/NextA currency deposit transaction or the simultaneous purchase and sale of currency, or vice versa by means of swap for spot value day against the next working day.
Spot PriceThe current market price. Settlement of spot transactions usually occurs within two business days.
Spot (Rate)In FX Markets, Spot refers to the cash price without interest factored in.
Spot TradeWhen you trade foreign exchange you are always quoted a spot price 2 business days in advance. This is under normal conditions where there are no bank holidays in the traded currencies countries or is not over a weekend.
Scalping a style of trading notable by many positions that are opened for extremely small and short-term profits.
Settled (Closed) Positionclosed positions for which all needed transactions has been made.
SpreadThe difference between the bid (buy) and offer (ask, sell) prices; in other words the spread is the commission that the brokerage house makes on each trade. This can vary widely between currencies and between brokerage firms. For example, USD/JPY may bid at 131.40 and ask at 131.45, this five-pip spread defines the trader’s cost, which can be recovered with a favorable currency move in the market.
Sterlingslang for British Pound.
Standard Lot 100,000 units of the base currency of the currency pair, which you are buying or selling.
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.
Stop Loss Order (SL) Order type whereby an open position is automatically liquidated at a specific price. Often used to minimize exposure to losses if the market moves against an investor’s position. As an example, if an investor is long USD at 156.27, they might wish to put in a stop loss order for 155.49, which would limit losses should the dollar depreciate, possibly below 155.49.
SwapA currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
SwiftSociety of Worldwide Interbank Financial Telecommunications. It is a dedicated computer network that is set up to support fund transfer messages between member banks worldwide.
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.
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.
Stochastics OscillatorThis technical analysis indicator is based on the premise that during an upward trading market, prices tend to close near their high, and during a downward trading market, prices tend to close near their low.
Support LevelsA term used in technical analysis indicating a specific price level at which a currency will have the inability to cross below. Recurring failure for the price to move below that point produces a pattern that can usually be shaped by a straight line. It is the opposite of Resistance levels.
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