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The Language of Success
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Glossary Terms
Ask Price
The minimal price a seller will accept for a security. The amount of securities sold at that price will usually be specified alongside.
Asset
(An ‘Instrument’). Securities, currencies, commodities, derivatives, indices or any other trading/investment resource whose value may change.
At Best
An instruction to a broker to buy or sell at the best available rate.
At or Better
An instruction to a broker to fill a transaction at or above/below a specific price.
Available Line
The maximum amount of asset units available.
Averaging Down
The practice of buying shares in a company at a price that is lower than the price one paid in the past for the same share – decreasing the average entry price of held shares.
Balance
The value of money in the account before any positions are opened.
Bar Chart
A Bar Chart plots the movement of your currency, commodity, CFD, Stock or index using bars, with each bar representing a timeframe – a minute, an hour, or a day. The top of the bar corresponds to the high price, the bottom to the low price, the left mark to the opening price, and the right mark to the closing price.
Base Currency
The base currency is the first currency in a Forex pair. For example, in the expression ‘EUR/USD = 1.6122’, the euro is the base currency while the U.S. dollar is the quote (or counter) currency. The price represents the amount of the quote currency you would need in order to buy a single unit of the base currency.
Bear Market
A market characterized by falling prices.
Bid/Ask Spread
The difference between the Bid and Ask (offer) prices.
Bitcoins
Bitcoin is a virtual or digital currency and the basic unit used in an online financial exchange system that is based on the transfer of encrypted information between users over the internet.
Due to its volatility, it is swiftly gaining popularity as a speculative investment, and its value has risen from 30 cents (US), when first introduced, to a peak of $1135, over the past 2 years. Its value at the time of writing was $628.
Giimer enables trading on Bitcoin pairs for ECN account holders, who can trade on this volatile asset with direct access to the market reserved for major liquidity providers, such as major banks and financial services providers.
Bull Market
A market characterized by rising prices.
Buy Limit
This is a pending buy order placed below the market price. For example, if the EUR/USD is quoted at 1.4150/52, then a buy limit order could be placed at 1.4100. In that case, if the EUR/USD ask price reaches 1.4100, then you will be long on the EUR/USD.
Buy Stop
This is a pending buy order placed above the market price. For example, if the EUR/USD is quoted at 1.4150/52, an example of a buy stop could be placed at 1.4200. In that case, if the ask price reaches 1.4200, then you will be long on the EUR/USD.
Candlestick Chart
A candlestick chart plots the price movement of a Forex asset using candlesticks, with each candlestick representing a specific timeframe. Candlestick Charts include four pieces of information: opening price, closing price, high price, and low price.
CFD (Contract for Difference)
A CFD is a contract between a buyer and a seller, stipulating that the seller will pay the buyer the difference between the current value of an asset and its value at the contract time.
Closed Position
Closing, or ‘squaring’ a position, is the act of buying or selling a foreign exchange position, causing its liquidation.
Commodities
The principal Forex commodities are gold and silver. Other commodities include oil, natural gas, corn, sugar, coffee and cotton.
Counter Currency
The currency that is traded against the base currency in a currency pair, also referred to as the ‘quote currency’. For example, in the expression ‘EUR/USD = 1.5345’, the U.S. dollar (or USD) is the counter currency. The price represents the amount of a quote currency you would need in order to buy a single unit of the base currency.
Day Trader
Day traders are short-term traders. They are characterized by the practice of liquidating all their positions before the end of the trading day.
Deficit
A negative balance of trade.
Economic Indicators
Indicators are statistics about the economy. They are released by governments. The main economic indicators include GDP, inflation, unemployment and retail sales.
Equity
The total value of an account should all open positions be closed.
Futures
Futures are standardized financial contracts obligating the buyer to purchase, and the seller to sell, an asset at a predetermined future date and price. Futures are commonly used for commodities, currencies, and financial instruments. They are traded on futures exchanges and are typically used for hedging or speculative purposes.
Gross Domestic Product (GDP)
The market value of all goods and services produced within a country within a given period of time. GDP is usually measured on a yearly basis.
Gross National Product (GNP)
GDP plus the income earned from foreign investments and work.
Hedging
The general term for measures taken to protect positions from undesirable market movements.
Index
A statistical indicator representing the value of its underlying securities. The most popular economic indices are the Dow Jones Industrial Average, the Nasdaq Composite, the S&P 500, and the FTSE.
Instant Execution
Instant execution is available for all Giimer account types and its price appears in the price window. If the selected price is not available when the broker receives the request, a “re-quote” will occur. In “re-quote” mode, the broker sends the buyer a price at which the order can be executed. Please note that in this mode the user can set a maximum deviation from the quoted price.
Leverage
Leverage allows traders to place a position whose value is greater than the amount of money in your account by using a short-term credit allowance. Leverage is very common in Forex trading, and is expressed as a ratio, e.g. 50:1 or 200:1.
Limit Order
When you set up a limit order, you are telling your broker to buy or sell an underlying asset (a currency pair, CFD, stock index or commodity) when it reaches a specific price.
Line Chart
A line chart plots the price movement of a currency pair, stock index, commodity or CFD over a selected period.
Long Position
A long position, which is an order to buy a currency pair or CFD, will become profitable if market prices rise.
Lot
A standard lot represents 100,000 units of a currency.
Market Execution
Market execution is only available for ECN accounts. In this execution mode, the order is filled at the best available price. If the selected price is not available, the order will be executed at the closest price available.
Margin
Margin is the amount of money needed to maintain a market position. Margin is expressed as a percentage of a position size, for example 5% or 1%. On a 1% margin, a position of $1,000,000 requires a deposit of $10,000.
Margin Call
A request from a broker or dealer for additional funds in accordance with the purchase rules and regulations.
Open Order
An order to buy or sell an asset. It remains in effect until it is cancelled by the trader, expires, or is executed.
Open P and L
The sum of profits and losses on your open positions should all of your trades be closed.
Open Position
An active, existing trade that has yet to be closed.
Option
A financial contract whose owner has the right to buy or sell an underlying asset or instrument at a specified price, at or prior to a specified date.
Order
An instruction to execute a trade at a specified rate.
Over the Counter
A transaction that is not conducted through an exchange.
Pending Order
A pending order is an instruction to make a deal according to a price that differs from the current market price. The deal requires a registered price order, which is executed when the market reaches the set value. Four types of pending orders are available: buy limit, sell limit, buy stop and sell stop.
Pip
A pip stands for ‘percentage in point’ and is the smallest unit of a currency. Most of the major currency pairs are priced to four decimal points, meaning that the smallest unit of change is the fourth digit after the decimal point.
Quote
Used for information purposes only, a quote is an indicative market price. In Forex, ‘quote’ can also refer to bid and ask prices as they appear in a currency pair.
Quote Currency
This is the second currency in a Forex pair. For example, in the expression ‘EUR/USD = 1.5345’, the U.S. dollar (or USD) is the quote currency. The price represents the amount of quote currency you would need in order to buy a unit of the base currency.
Range
The difference between the highest and lowest prices recorded during a specific trading session.
Rate
The price of one currency in relation to another.
Roll Over
Rollover means that a Forex position is moved to the next delivery date. Rollover provides clients with an added stream of profit/loss.
Sell Limit
This is a pending sell order placed above the market price. For example, if the EUR/USD is quoted at 1.4150/52, a sell limit order could be placed at 1.4200. In this case, if the bid price reaches 1.4200, then you will be short on the EUR/USD.
Sell Stop
This is a pending sell order placed below the market price. For example, if the EUR/USD is quoted at 1.4150/52, an example of a sell stop would be 1.4100. In this case, if the bid price reaches 1.4100, then you will be short on the EUR/USD.
Short Position
A short position, which is an order to sell a currency or a CFD, will become profitable if market prices fall.
Spot Price
The current market price.
Spread
The difference between the bid and ask prices.
Stop Loss Order
This order is used for minimizing losses if the price of a security starts moving in an unprofitable direction. If the security price reaches this level, the position is automatically closed.
Strike Price
Sometimes referred to as an ‘exercise price’, this is the price at which a trader can either buy or sell a currency.
Take Profit Order
This order is used to close an order when the profit reaches a planned or desired level. Execution of this order results in closing the position.
Technical Analysis
The analysis of numerical data with the objective of predicting the price movement of a financial instrument.
Tick
A minimum change in price, either up or down.
Turnover
The total volume of all executed transactions during a specific period.
Used Margin
This refers to the funds used to maintain open positions.
Volatility
A statistical measure of the dispersion of returns for a given security or market index. High volatility indicates a large range of price fluctuations.
Warrant
A derivative that gives the holder the right to buy or sell an underlying asset at a specific price before expiration.
X-Div (Ex-Dividend)
The date on which a stock starts trading without the value of its next dividend payment.
Yield
The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment’s cost.
Zero-Coupon Bond
A bond that does not make periodic interest payments but is issued at a discount to its face value, with the difference being the return to the investor.
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