Forex Glossary

Popular Forex Terms:

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Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).

Moving Averages Moving averages simply measure the average price or exchange rate of a currency pair over a specific time frame. For example, if we take the closing prices of the last 10 days, add them together and divide the result by 10, we have created a 10-day simple moving average.

Forex FX and Forex refer to Foreign Exchange, the exchange of one currency for another.

Aussie — a Forex slang name for the Australian dollar.

EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.

Cable — a Forex traders slang word GBP/USD currency pair.

Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.

Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.

Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.

ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers dont discourage scalping, dont trade against the client, dont charge spread (low spread is defined by current market prices) but charge commissions for every order.

Order — order for a broker to buy or sell the currency with a certain rate.

Lot — definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).