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Absolute advantage
is an advantage in production of certain goods or services some country has over the others due to peculiarities of climate, education, labour resources and other factors. If a country has an absolute advantage in certain industries, it can produce corresponding goods and services at a lower cost per unit, than competitors.
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Account
a special personal account opened with the company by a client. This account is used to offset the obligations of the client and dealer, resulting from the deals concluded under the present agreement
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Account history
a full list of completed transactions and non-trading operations of a certain trading account
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Accounting currency
currency unit in which deposit/withdrawal operations are performed
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Accrual
Proportionate discounts and premiums for forward exchange transactions (orders) with respect to swap transactions during the period of the specific transaction.
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Adjustment
The decision of a central bank to adjust domestic economic policy aimed at eliminating imbalances of payments or determining an official exchange rate.
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Adviser
a trading account management algorithm in a form of a program engineered in MetaQuotes Language 4, that sends requests and orders to the server via the client terminal (platform)
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American Depository Receipts
Introduced to the financial markets in 1927, an American depositary receipt (ADR) is a stock that trades in the United States and is denominated in US dollars but represents a specified number of shares in a foreign corporation. ADRs are also freely traded on European markets. ADRs can also be listed on major exchanges. It is a tool for raising capital on the US and international markets. ADRs can have different names depending on the requirements of a particular market.
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American Stock Exchange (AMEX)
The stock exchange that had grown into the second largest securities market in the United States from a small securities house. Most of the securities listed on the AMEX are of small and medium sized companies. Its major indices are AMEX Major Market Index and AMEX Market Value Index.
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AMIEU
stands for Australian Meat Industry Employees' Union. The union represents the interests of workers in the meat industry.
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Angela Merkel
is a German politician, a leader of the Christian Democratic Union of Germany since April 10, 2000. Angela Merkel has been the Chancellor of the Federal Republic of Germany since November 22, 2005, when her party won the 2005 federal election. Merkel is the first woman to have become Chancellor of Germany.
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Annual inflation
is the increasing of the overall prices for goods and services during the period of one calendar year.
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APEC (Asia-Pacific Economic Cooperation)
is a forum of 21 Asia-Pacific countries that seeks to promote free trade, investment liberalisation and facilitation across the region, as well as to foster economic growth and strengthen the Asia-Pacific community.
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Arbitrage
The simultaneous purchase of an asset on one market and sale on another to profit from a temporary difference in the price.
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Ask
is the offer price; the price at which a seller is willing to sell the base currency.
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Asset
Any item of economic value which is the subject of a trade on a financial market. An asset can be a currency pair with an aim to profit from a difference in its exchange rate.
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At best
An order to a dealer or a broker to buy or sell a financial asset at the most desirable price available.
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AК&M
is an information and analytical agency focused on economics. AК&M was created in 1990. It has long been a leading informational portal in the field of economics and finance.
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Balance
the total financial result of all fully executed transactions and deposits/withdrawals to/from an account
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Balance of payments
shows the balance of a country’s overseas payments and payments incoming from abroad over a certain period of time.
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Bank Stress Test
is a compulsory condition for high estimation of the risk management system under the Direction of the Central Bank of Russia dd. January 16, 2004 No 1379 U "On assessment of the financial stability of the bank with the purpose to confirm it as sufficient for participating in the deposit insurance system".
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Bar chart
A style of chart on which the top of the vertical line indicates the highest price of an asset for the certain period, while the bottom represents the lowest price. The closing price is displayed on the right side of the bar, and the opening price is shown on the left side.
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Barrel
is a unit of liquid volume which is used on international oil market. Price for basic oil brands is estimated in dollars per barrel.
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Base currency
currency unit in which an account, balances, commission fees and payments are nominated and calculated
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Base interest rate
The rate of interest used by commercial banks as a basis for their lending rates. Determined by a country’s central bank, the base interest rate has a direct impact on the national currency’s exchange rate. This makes monitoring its changes a useful indicator for Forex traders.
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Bear
is the market participant who opens sell trades and believes that a currency exchange rate is about to fall.
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Bear market
A market condition in which prices are falling.
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BHP Billiton
is the world’s largest mining company founded in 2011 with headquarters in Melbourne.
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Bid
is the demand price; the price at which a market participant is willing to buy the base currency.
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Bid price
The price at which an investor can sell an asset on financial markets. The bid price is a part of the formula which is used to calculate the expiry level of an asset.
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Bloomberg
is an American mass media corporation which provides a range of informational services from world finance platforms.
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Bloomberg Banks Stress Test Index
tracks the US banks whose balance sheets will be reviewed by US regulators to see how much capital the banks will require to meet the standards in the current economic environment. Tests would be applied to banks posessing over $100 billion in assets.
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BNP Paribas
is a financial conglomerate, one of the world’s largest and reliable banks. According to Standard & Poor’s the bank’s current rating is AA. It has offices in 80 countries all over the world and headquarters in Paris, Geneva, and London with the total amount of employees totaling 200 thousands of people.
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Brent
is a standard oil brand which is sourced near the European shoreline in the North Sea. This brand is famous for low percentage of sulfur which makes it attractive for oil-processing companies. Brent is a pricing benchmark for almost 40% of all global oil brands. It is traded on international oil markets.
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Broker
the firm that provides crediting services and trader support
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Brokerage
is the fee or commission paid to a broker for the services rendered. The amount of the brokerage is usually proportionate to the deals’ value.
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Bull
traders that count on currency rate escalation
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Bull market
market that tends toward escalating rates
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Business Climate Indicator (BCI)
is a business climate indicator of a particular country which is based on the responses of business representatives. Index data has a direct impact on the market.
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Capital account
is the other component of the balance of payments directly related to the GNP. It represents the balance of public and private capital inflow and outflow as well as the amount of funds borrowed and lent.
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Carry trade
is a Forex trading strategy in which the profit is gained not from the price movement and closure of profitable position, but from holding position with a positive swap (see swap).
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Cash
The currency of a nation in its physical form. Cash is money (notes or coins) that is in free circulation and that is used in the turnover of goods and services
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Caspian Pipeline Consortium (CPC)
is oil-producing company which develops reserves in western area of Kazakhstan. Oil is transported by means of pipeline to the shores of the Black Sea for further transportation to Europe.
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Central Bank of the Russian Federation
is the primary bank of Russia, its main issuing monetary body. Together with the government, it develops and implements the monetary policy. The bank has broad powers. In particular, it is accredited to issue the national currency and regulate commercial banks. The central bank of the Russian Federation coordinates and regulates Russia’s entire credit system. It acts as economic regulator. The bank supervises lending institutions, grants and withdraws banking licences. The headquarters of the bank are in Moscow.
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Chart
Graphical representation of a particular currency’s price change over the given period of time. The chart types are: the line chart, the bar chart and the candlestick chart.
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Chicago Mercantile Exchange (CME)
The Chicago Mercantile Exchange (CME) is an American financial and commodity derivative exchange. Originally established as a non-profit organization, the CME is a platform for futures trading and is also a regulatory authority, collecting and releasing information about the market and ensuring orderly clearing and settlement of executed trades.
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Clearing
The end of mutual settlements on a trade.
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Client
physical or legal party executing operations with the company
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Client log file
file, created by the client terminal, which records all requests and orders sent from the client to a dealer with 1 second accuracy
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MetaTrader 4 or 5 software product that lets the client get information about financial market trades in real time mode (volume defined by the company), perform technical analysis of markets, operate, set/change/cancel orders and receive messages from the dealer and the company as well
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Close position
is a fixation of profits or losses on an open position; removal of a pending order.
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Closed transaction
consists of two opposite trading operations of equal volume (the position opening and closing): buying followed by selling or selling followed by buying
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COMEX (Commodity Exchange)
is a leading exchange market of valuable metals, department of New York commodity market. Futures contracts are concluded for any month, including the current month. Schedules for trading sessions of every futures contract are individual, but in overall the instruments are trading from Monday to Friday from 8:00 till 13:30. Electronic trading session is hold daily from Sunday to Friday from 6:00 till 17:15.
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Commerzbank
is a German group of banking companies established in 1870. The headquarters of Commerzbank are located in Frankfurt am Main. Total assets of Commerzbank are about 600 billion euros. Its staff are 360,000 people, and the number of customers amounts to 8 billion in more than 40 countries. It is Germany's second-largest bank by assets.
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Comparative advantage
is an economic law referring to the ability of an individual or a country to demonstrate the best performance producing goods and services in the sphere they are the most competent, qualified or experienced.
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Concealed Unemployment
is not reflected in official statistics. It relies on data on how many people receive unemployment benefits in a country. Apart from this group of people, there are other categories of employable citizens: those who are almost out of work, but do not get any jobless benefits; those employed part-time; and those who have not claimed for any benefits for some reason.
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Consolidation
is a period during which a price action fluctuates in a certain range without establishing a trend either up or down. Consolidation is believed to be followed by a breakout in one direction or the other.
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Consumer Confidence
indicates how consumers feel about current economic conditions in their country. The index is calculated on the basis of a monthly survey. The survey respondents are asked to assess economic prospects of their country. The index does not tend to affect the markets much, because it provides a subjective vision of the economy, rather than a real picture. A rising index augurs well for the national currency.
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Continuous Linked Settlement (CLS)
is a global multi-currency payment system founded in 1997 by the largest brokerage Forex companies for cash remittances on currency deals.
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Contract specifications
general trading conditions (such as spread, lot size, minimal trading operation volume, trading operation volume increment, initial margin, lock margin etc.) for each instrument
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Convergence
A situation in trading when the price of an underlying asset is moving to the price of a futures contract and vice versa.
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Correction
A reverse price movement, or its sideways movement after the previous uptrend or downtrend weakened, which led to positions’ closing or profit taking by market participants as they considered the price too high or low for further trading.
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Counter currency
The currency used as the second currency in a currency pair. It is also known as the quote currency. Units of the counter currency are expressed in terms of a single unit of a base currency.
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CPI (Consumer Price Index)
indicates changes in retail prices for goods and services the market basket comprises. The index is based on cost of food, clothes, education, housing and household utilities, leisure and entertainment, charges for health care services and transportation fares. The index is calculated monthly. It is a key measure of inflation in any country.
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Credit (credit relationship)
is a relationship between subjects arising from cost flow. There are various forms of credit: commercial and banking borrowing, loaning, leasing, factoring etc.
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Credit rating
measures the creditworthiness of an individual, firm, region, or a country. Ratings are calculated based on past and current financial performance of market participants as well as on the estimated amount they borrowed and obligations incurred. The estimates are supposed to provide potential lenders/investors with insight into probability of on time repayment.
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Cross rate
is the currency exchange rate between two currencies, both of which are not the official currencies of the country in which the exchange rate quote is given in.
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Currency basket
A selected group of currencies in which the weighted average is used as a measure of the value of a currency not included in the group. Depending on its purpose, the currency basket can include currencies in different relative amounts, a currency’s inclusion on a constant basis or changing depending on different Forex market factors.
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Currency code
The three-letter alphabetic code, where the first two letters represent the country of a currency, while the third one stands for the name of the currency. The currency codes are specified by the International Organization for Standardization (ISO).
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Currency intervention
is a significant one-time and direct central bank’s intervention in the currency market and the currency rate implemented by means of buying and selling of large amount of foreign currency. Currency intervention is used to regulate the course of foreign currencies in the interest of the government
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two currencies which make up a foreign exchange rate, for example, EUR/USD
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Currency risk
Potential adverse movements of currency rates.
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Current account balance
is one of the two components of the balance of payments referring to net revenue on exports minus payments for imports, net revenue on investments and net transfer payments.
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DAX (Deutsche Akzien Index)
The benchmark index for the German equity market. It tracks the performance of 30 selected German blue chip stocks traded on the Frankfurt Stock Exchange. There is also the DAX 100 index, which includes reinvested dividends to show the overall return available to investors. The index was introduced in 1987. It is calculated using the Xetra technology.
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Day trading
Trading on a financial market during one session within a day. This means that positions opened this day are kept overnight to the next day and the next trading session.
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Dealing
non-cash currency trading
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Dealing center
company that provides access to the money market
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Deflator
is a statistical tool used to convert a national currency into inflation-adjusted national currency.
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Delivery
A deal on Forex under which a currency is tendered to and received by the buyer.
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Demo account (Demonstration account)
is a virtual trading account rendered by a broker to review and test the trading systems features on financial markets without the risk of losing real funds. As a rule, the demo account interface is similar to that of a live account.
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Depreciation
A decrease in the value of a currency as a result of market forces.
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Derivatives
Financial instruments with a price that is derived from one or more underlying assets (bonds, shares, futures contracts). Derivatives are often used for hedging and also for speculative purposes. Leverage is applied in buying these financial instruments, thus allowing traders to buy derivatives at a price much higher than they can afford.
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Developer
“MetaQuotes Software Corp.” is the trading platform developer
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Dinghong Fund
is China's first privately offered wine equity fund. The fund was founded by Ling Zhijun, a banking professional and wine enthusiast who manages Pacific Asset Management of Beijing, and French winemaker Jean-Pierre Moueix's China representative Zhang Yanzhi.
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Direct quote
A foreign exchange rate quoted as the domestic currency per unit of the foreign currency.
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Discount rate
An interest rate charged to financial institutions for loans received from a country’s central bank.
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Divergence
is the difference between two correlative instruments. For instance, intermarket divergence happens when one of the markets reaches cyclical/session/history price extremes (highs or lows) when the correlated market does not do so. Divergence quite often signifies a price reversal; (it) is used by traders as a trading signal
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Diversification
is the distribution of invested or loanable money assets among different investments with the purpose of smoothing out potential losses.
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DJIA
is Dow Jones Industrial Average index, the oldest stock index in the USA which is a simple arithmetic average of price growth of 30 top industrial U.S. companies’ shares.
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Double bottom
is a classic pattern of technical analysis where the price reaches two consecutive lows placed at the same level; it signifies a reversal
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Double top
is a classic pattern of technical analysis used to depict two consecutive price rises placed at the same level; it signifies a reversal
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Downtick
A stock market transaction at a price below the previous transaction.
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Downtrend
Downtrend is the forex market term meaning gradual decline of a currency price at a certain period of time.
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ECB
European Central Bank which carries out EU is monetary policy.
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ECB (European Central Bank)
was established on June 1, 1998. The ECB headquarters are situated in Frankfurt am Main, Germany. The General Council of the European Central Bank includes representatives of all the EU countries. The ECB is independent from other EU authorities.
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Economic integration
is the development of stable relations among neighbouring countries into unification of economies. This process is usually accompanied by coordinated interstate economic policy.
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Economy Watchers Survey
assesses current economic conditions in a country.
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Elliot Wave theory
The theory on the basis of which analysis and forecast of price movement is made. According to the theory, the psychology and behavior of market participants influences financial markets’ trends. It can be identified and serve as a guide in trading decisions.
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Equity
the secured part of the client account, including open positions, that is bound to the Balance and the Floating rate (profit/loss) by the following formula: Balance + Floating + Swap, i.e. the funds on the client account minus the current loss of the open positions, plus the current profit of the open positions
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ESM
stands for European Stability Mechanism. It is a joint financial fund of the Eurozone countries replacing the two existing EU funding programmes.
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ETF (Exchange Traded Fund)
investment funds much like securities which serve as certificates for share portfolio. ETF may consist of securities of different companies and share funds. On legal basis, ETF is a type of share funds.
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Euribor
is a rate European banks use to borrow funds from peers for three months.
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Exchange rate
The price of a nation's currency in terms of another currency.
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Export
means delivering (or shipping) goods or capital abroad.
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Federal Reserve Bank
is a regional bank of Federal Reserve System of the USA. A network of 12 Reserve Banks carry out money management of the government.
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Federal Reserve System
is the U.S. banking system which fulfils functions of country’s Central Bank.
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Financial Transaction Tax
allows regulating financial markets, in particular, the market of derivatives.
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Fitch Ratings
is one of the largest rating agencies which provide analytical data of financial markets and estimates companies’ borrowing power.
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Flat
is the situation on the currency market characterized by the absence of an uptrend or downtrend; also known as non-trend or sideways movement
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Flexible exchange rate
An exchange rate which fluctuates depending on the supply and demand of a currency in relation to other currencies on the forex market. It is also called floating exchange rate.
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Floating profit/loss
Unrecorded gains/losses on the opened positions at current rates values.
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Force major circumstances
occurrences which could not be foreseen or prevented. These include: natural disasters; wars; acts of terrorism; government actions, actions of executive and legislative government authority, hacker attacks, and other unlawful acts toward servers
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Forecast
Assesment of future market conditions on Forex within a short-term, medium-term and long-term framework.
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Forex (foreign exchange market)
is a segment of the financial market for interbank currency exchange at non-fixed rates.
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Forex indicator
is a software-based analytical tool that can be used to receive and visualize additional information (or information transformed into more understandable format) about the price chart
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Forex trend
It occurs when the price moves in an identifiable direction over a specific period. There is an uptrend, downtrend and a sideways trend.
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Forward contract
A contract that specifies the price and quantity of an asset to be delivered in the future. Although delivery is made in the future, the price is determined on the day of the transaction.
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Free margin
determines the state of an account. Calculated according to the formula: Equity - Margin = Free margin
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FSSS
stands for Federal State Statistics Service of Russia. It is a federal executive institute responsible for official statistical data on social, economic, demographic, and ecological conditions in Russia. In addition, FSSS controls and supervises state statistics in the Russian Federation.
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Fundamental analysis
A popular way of forecasting price behavior on the forex market. The fundamental analysis is based on the analysis of the world’s leading economies’ indicators and reports on economic sectors released by major countries. The fundamental analysis also includes important political and financial news that can have impact on prices. Based on the analyzed information, experts say in what direction an asset’s price will move.
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Futures contract
An agreement to buy or sell a predetermined amount of a financial asset or a commodity at a specific price on a specific date in the future. Futures contracts are characterized by strict conditions on the type and quantity of assets, involving only minor discrepancies. These contracts also have certain terms of payment of invoices or transportation costs.
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Gap
is a break between prices which may happen as a result of sharp fluctuations on the market or during the weekends (between the closing price of one week and opening price of the other)
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Gasprom
is a natural gas supply and distribution company which is the largest in Russia and the entire world. The company possesses the most extensive gas pipeline system.
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GDP (Gross Domestic Product)
is a macroeconomic indicator measuring the market value of output produces within a year in all the economic sectors of a country, for consumption, exporting and hoarding, regardless of the producer's nationality.
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Goldman Sachs (GS)
is a huge commercial bank, financial conglomerate, established in 1869 by Marcus Goldman and Samuel Sachs in order to perform stock market operations. Currently, the bank’s activity includes investment banking business together with exchange business, as well as management of securities and assets.
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Hard currency
The term denoting a currency that can be easily exchanged (i.e. widely accepted around the world) with a stable rate. Hard currencies generally come from developed nations with strong economies. Because of its liquidity, a hard currency is considered to be a good investment instrument.
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HDFC Bank Limited
is the Indian financial services company located in Mumbai and registered in 1994. The fifth largest bank in India by volume of assets, and the second largest by market capitalization. The bank was supported by Housing Development Finance Corporation, which is the main real estate investment company (established in 1977) in India.
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Hedge fund
The funds that are managed much more aggressively than their mutual fund counterparts. The strategies applied for increasing the yield include trading with leverage, swaps, and arbitrage.
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Hedged margin
Collateral necessary to cover open position.
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HICP
stands for Harmonized Consumer Price Index. HICP is an indicator of inflation, a single cornerstone in the statistical system for the EU countries. The index is particularly important in the periods of interest rate increases, as its growth provokes further monetary tightening and consequently the national currency upswing.
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High-Frequency Trading, HFT
is a type of trading which applies technical tools and computer algorithms (high-speed servers) to trade securities with high speed. In contrast to usual trading, High-Frequency Trading uses powerful computers to execute a greater number of trading operations. Usually, a computer analyzes the markets and executes operations based on its own trading strategy. The number of operations generated via High-Frequency Trading daily is counted in tens of thousands
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IMF (International Monetary Fund)
international organization established by the UN and grants loans to member countries to meet balance of payments needs.
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Import
is delivery of goods or capital into the country from abroad.
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Import substitution
is fostering domestic production of goods rather than importing foreign goods.
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Indicative quote
A quote serving for information about the current price of an asset. It is not used for making market orders.
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Industrial Production Index
is an economic indicator published by the Federal Reserve Board of the United States. It is based on the most significant categories of industrial goods. Since this index reflects changes in output of mineral resources, energy efficiency, gas and water usage as well as manufacturing production, it can be regarded as a GDP constituent.
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Inflation
is the process of increase in prices for goods and services. Due to inflation, a certain amount of money sufficient for purchase of some good or service at present will not be sufficient anymore in a while.
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Initial margin
An amount necessary to open a position that serves as a trader’s guarantee of fulfillment of obligations towards a broker. The margin largely depends on leverage. The higher the leverage, the lower the margin required to open a position.
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Initial public offering (IPO)
It is the first time that the stock of a private company is offered to the public for sale. As a rule, an IPO is made when a company wants to attract attention of shareholders. If you invest in the stock of such companies, you should be ready for risks.
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Insider
A person who belongs to a group or organization and has special knowledge about it unknown to ordinary traders and related to financial markets.
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Instant execution
The mechanism of providing a client with quotes without prior request. Clients see live streaming forex rates of a dealer, based on which they can send an order to execute a trading operation at any time.
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International division of labour
implies that each country produces certain goods because it has everything necessary to produce them as compared to other countries. By specializing in suitable production, the country satisfies its own needs yet relying on foreign trade. Thus, international division of labour is a principle of the world economy where every country has its own specializations, exports the goods produces while importing the goods other countries specialize in.
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International reserves
refer to a country’s external highly liquid assets, namely gold and currency, controlled by the monetary authorities. International reserves are meant for financing the current account deficit, currency interventions etc.
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International trade
is a system of relations implying exchange of goods and services across international borders.
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trade oriented at gaining profit within one day
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Investments
Assets purchased with the idea that they will provide income in the future or will be sold at a higher price for profit. However, an investment not always results in a financial gain, unless it is made in profitable projects or shares. So it is crucial to determine potential risks. As a rule, investing in high-yield assets is more risky.
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IPO (Initial Public Offering)
is the initial public offering of joint-stock company shares for selling.
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ISM Service Index
surveys supply managers in the field of services with an aim to trace changes in this field. The index tends to be sensitive to psychological factors, rather than an actual situation. New readings of the index are published at the beginning of every month at 10:00 EST (NY).
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Jefferies & Co
is an American global investment banking firm. Jefferies & Co is the largest independent bank in the USA.
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Leading index
shows an average of leading economic indicators such as Factory Orders, Initial Jobless Claims, Money Supply, Average Workweek, Building Permits, quotes of common stocks, Durable Goods Orders and Consumer Confidence. The leading index is believed to predict the pace of economic growth over the next six months. The index is calculated at the beginning of every month and released at 10:00 EST (NY).
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Leverage
An amount of money a broker is ready to give to a trader to trade on financial markets with larger trading volume. Using the leverage, traders increase their deposits tenfold and even more. Leverage is expressed in the ratio between the trader's own funds and those funds borrowed from the broker: 1:10, 1:100, 1:500, etc. If traders use the leverage, their own money serves as collateral.
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Libor
stands for London Interbank Offer Rate. Libor is a commonly recognized indicator of the cost of funds to banks. This is the rate that determines the cost of loans the world’s largest banks provide each other with on the London Interbank Exchange. Libor is one of the most widely used benchmarks for short-term interest rates. At present, it fixes rates for EUR, USD, GBP, JPY, CHF, CAD, AUD, DKK, and NZD. Libor is calculated for various borrowing periods, ranging from overnight to one year.
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Light Sweet
is a standard oil brand which is extracted in Texas (the USA). Due to low content of sulfur and relatively high output of useful products, it is used mainly for gasoline processing. This kind of oil is in high demand in the USA and China. Light Sweet Crude Oil is a pricing benchmark for world types of oil. It is traded on NYMEX (New York Mercantile Exchange).
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Limit order
is a type of a pending order (see pending order) that enables entering the market at the given potentially important level after which the reversal is expected. Limit order types are Buy limit and Sell limit
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Liquidation
Closing of an existing position by opening the opposite trade.
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Liquidity
is the degree to which an asset (currency, security, etc.) can be sold at the current market price. This term refers to market volatility and dynamics: a liquid market is a type of a market with large trading volumes where every trade incapable of making a significant impact
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Locked positions
Positions of the same asset and volume opened on one account in opposite directions (buy and sell).
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Long position
is the buying of a financial instrument
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Loss
is the fixed loss on the position
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Lot
is a trading unit on the market; the standardized quantity of goods making up a transaction, exchange-traded securities, a certain amount of currency on Forex. Lot also represents the trade volume (position, order)
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Lot Size
a quantity base currency in one lot, that is specified in the contract
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Low price
The lowest traded price for an underlying instrument for the specific period of time. On the stock market it is the lowest traded price for a security for one trading day.
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M&A (Mergers and Acquisitions)
is a buyout market. It is highly developed in the USA and in Euro area where in the history of every company information about its merging and absorption with other companies is stated.
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Margin
the required equity which an investor must deposit to collateralize a position equal to 1% (when leverage = 1:100) of an open position deposit
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Margin level
The ratio of equity to margin expressed in percentage. The margin level shows existing risks enabling a trader to prevent them. Looking at the margin level, a trader realizes whether he has enough funds to further open traders and keep orders open. The margin level is calculated using the following formula: Margin Level = (Equity Necessary Margin) × 100%.
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Margin trading
using borrowed money to buy securities, with the expectation of increasing profits. Margin trading can bring big returns, but is also risky
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Mario Draghi
is an Italian economist. He has been the ECB President since 2011. He also headed the Bank of Italy from 2005 to 2011.
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Market
A system with established rules of trade in financial assets or instruments, goods or services.
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Market opening
trade opening after a weekend, holidays or after an interval between trading sessions
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Market opening price gap
either of the following situations:
– Market opening quote Bid is greater than market closing quote Ask;
– Market opening quote Ask is less than market closing quoteBid
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Market price
the last posted bid and ask prices for a given asset, currently valid on the market
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major banks and financial firms that pledge to provide liquidity by accepting the other side of a trade in a currency, security or futures contract
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MICEX (Moscow Interbank Currency Exchange)
is a Russian stock exchange where papers of more than 700 issues with the total capitalization of 10 trillion rubles are trading.
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Minimum deviation
An acceptable price range within one contract set by a stock exchange.
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MSCI (Morgan Stanley Capital International)
is a leading international analytical company which calculates global, national, and regional stock indices. Review of MSCI indices greatly influences stock markets.
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MSCI Asia Pacific
is Morgan Stanley capitalization composite index which unites 15 countries of Asia-Pacific region. Index with the reading of 100 notched at the end of December, 1987 is considered to be standard.
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NASDAQ (National Association of Securities Dealers Automated Quotation)
is the US stock market where shares of more than 4,000 hi-tech companies with the total capitalization of $6 trillion are trading.
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Necessary margin
The amount necessary to open the position of the needed volume. It is collateral a trader leaves on the account of a broker or a dealing center. The size of the necessary margin varies depending on the leverage used by the trader. The lower the leverage, the bigger the margin, and vice versa.
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Net position
The difference between total open long and open short positions in a given asset held by an individual.
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New York Stock Exchange (NYSE)
is New York stock exchange where securities of more than 3,000 issues bodies are trading daily with the overall capitalization above $27 trillion.
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Nikkei 225 Stock Average
is Japanese stock market index which represents an average of the most widely quoted Japanese equities of 225 companies of the first section of Tokyo stock exchange.
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Non-trading operation
depositing or withdrawing funds from a trading account, or extending credit
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Nord Gold
is an international gold-mining company which operates in Russia, Kazakhstan, African states of Burkina Faso, and Guinea. Company’s quotes are traded on London stock market.
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Normal market conditions
condition of a market that meets the following requirements:
- absence of noticeable breaks in relation to the trading platform quotes;
- absence of rushing price dynamics; absence of significant price gaps
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North American Free Trade Agreement
is the world’s largest free trade area which includes the USA, Mexico, and Canada. The area’s population makes up 406 million people while the total GDP is $10.3 trillion.
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Obvious mistake
opening/closing client positions or executing client order at a price that greatly differs from price quoted per instrument in present flow quoting at the moment of processing. Or some other dealer activity or inactivity that deals with mistaken determination of market prices at the present moment
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Offset
Offsetting is a liquidating of a buy or sell position by opening the equivalent position in the opposite direction. Thus, if a trader has short EUR/USD position, the offsetting position will be a long trade on the same instrument of the same volume.
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Offshore
The term "offshore" is used to describe a territory or a nation that accumulates foreign capital by offering special tax incentives to companies based there.
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Open position
the result of the first part of a completed transaction; at the position opening, the client accepts the following liabilities:
- to execute the opposite operation of equal volume;
- to maintain equity not lower than 10% of the necessary margin
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Order Forex
An instruction that is sent to a broker to enter or exit a position at a specified price.
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Order level
The price specified in the order.
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Output
is the volume of goods a company has produced or services it has provided. It is measured in real and value terms.
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Overbought
is the situation on the currency market in which the demand for an asset increases the asset’s value to a level that does not meet the fundamental factors. It is commonly believed that in the overbought zone traders should sell
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Overnight position
The position that a trader possesses at the end of a trading day. A trade that remains open until the next business day.
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Oversold
is the situation on the currency market in which the demand for an asset decreases the asset’s value to a level that does not meet the fundamental factors. It is commonly believed that in the oversold zone traders should buy
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Pending order
the client instructs the dealer to buy or sell once the price reaches the order level
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Pips (points)
the smallest unit of price for any foreign currency, also referred to as points
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Pivot point
is the key point of support/resistance level calculated by taking the average of an asset’s previous high, low, and closing price
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PMI (Purchasing Managers’ Index)
is a leading indicator. Its reading is determined by polling manufacturing supply managers. The index provides insight into business trends and influence of the economy on price formation.
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PPI (Producer Price Index)
measures changes in prices domestic producers receive for their output.
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Price gap
A quick market move in which prices skip several levels without any trades occurring. Gaps usually follow economic data or news announcements.
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Price prior to non-market quoting
closing price of minute bar, prior to minute bar with non-market quoting. Price Gap – either of the following situations:
– Present quoting Bid is greater than prior quoting Ask;
– Present quoting Ask is less than prior quoting Bid.
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Price transparency
Equal availability of quotes to all market participants.
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Principal value
is a trader’s initial capital, start-up capital
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Producer-Price Inflation
is the increasing of the average prices for raw materials and consumer goods calculated for the base/reference period.
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Profit
A financial gain that resulted from investing, or from a speculative operation that exceeds an amount of initial capital.
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Pyramiding
is a method of increasing a position size in which each new position is less (greater) than the previous one
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Quote currency
The second currency quoted in a currency pair on Forex.
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Quote flow
a sequence of numerical data describing the price value of an instrument at a certain time period
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Quotes base
Information about the stream of quotes.
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Range
the distance between levels of support and levels of resistance
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Rate
The price of the base currency in terms of the quote currency.
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RBA
stands for Reserve Bank of Australia. The bank is responsible for Australia's monetary policy, works to maintain a strong financial system and issues the nation's banknotes.
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RBC (RosBusinessConsulting)
is a Russian media group operating in the Internet, mass media, and on TV. It embraces the RosBusinessConsulting information agency, a news website, the Quote.rbc.ru business analytics portal, and the RBC daily weekly analytical newspaper.
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RBI
is an investment holding company, one of the biggest players in the housing and construction markets. The RBI headquarters are located in Saint Petersburg. The company operates in the segments of residential and commercial construction.
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Real GDP
shows production output and incomes in real terms.
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Repo
A repurchase agreement where a seller agrees to buy assets back from a buyer at a predetermined price.
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Resistance level
highest channel’s borderline
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Retracement
A reversal in the direction of a price movement or its pullback from a previous low or high.
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Reuters
is one of the world’s largest news agencies founded in the middle of the 20th century.
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Rising trend
occurs, when every following value of the wave curve is higher than the previous rate value. The lows of the waves are connected with a straight line – the trend line
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Risk management
means using a strict set of rules in trading in order to limit losses
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Rollover
is closure of an expired position at current market price and simultaneous opening of the exact same position; the method of carrying the position overnight
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RTS (Russian Trading System)
conducts trades on the stock and derivative markets. Open 10:00 to 23:50 MSK (GMT+4). In December 2011, RTS merged with MICEX into MICEX-RTS. In 2012 the united stock exchange was renamed as OAO Moscow Stock Exchange (MSE).
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RusRating
is an independent national rating agency accredited by the Ministry of Finance of the Russian Federation. It has been operating since 2001. The agency focuses on banks’ credit ratings.
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RWE (Rheinisch-Westfälisches Elektrizitätswerk)
is a German company engaged in selling natural gas. It is second rated after E.ON.
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S&P
is one of the largest rating agencies which deal with analytical investigations of financial market. The company to one of the world’s most powerful rating agencies. S&P is also known as the creator and editor of the American stock index S&P500; and the Australian S&P200;.
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S&P 500
is stock index of Standard & Poor’s rating agency which is comprised of 500 top publicly traded companies of the USA which securities can be found on the largest U.S. stock markets. It is a market-value-weighted index and one of the main indicators of the American economic climate.
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Scalping
is the method of short-term trading that suggests a large number of positions opened during a trading day fixing small amounts of profit or loss
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Sentix Investor Confidence Sentix
measures credibility of the Eurozone economy in the eyes of investors. The indicator is calculated on the basis of a survey held among investors and analysts. If the indicator rises, a foreign currency is converted into a national one when buying securities or non-financial assets, which pushes the national currency rate up. Readings of the indicator exceeding forecast bode well for the currency.
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Server log file
file, created by the server, which records all requests and orders received from the client to a dealer, as well as the processing result, with 1 second accuracy
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Shld
stands for the American international trading network founded by Richard Warren Sears and Alva Roebuck in the late nineteenth century. In early 2005, the company, which earlier was part of the industrial rating (Dow Jones Industrial Average), merged with the company Kmart and became known as Sears Holdings Corporation.
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Short position
is a situation where a trader sells a financial instrument
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Slippage
is the situation on the currency market in which a broker closes an opened position at a less profitable price than stated in the order. It happens amid price spikes when the level of position closure is broken too fast
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Societe Generale
is one of France’s largest financial conglomerates. Its headquarters are located in Paris. Societe Generale was founded in 1864; it specializes in asset management, investment banking, financial services etc.
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Spike
a comparatively abrupt movement of a price or value level upwards or downwards (usually exceeding spread). Spikes have a peculiarity of recurrence during a certain period of time, from several minutes to several hours. According to InstaSpot Public Offer Agreement, all positions opened and closed by non-market quotations are to be cancelled, which guarantees the safeguard of funds against spikes
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Spot price
The current price in the marketplace at which a given asset can be bought or sold. The standard settlement time frame for spot transactions is two business days from the trade date.
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the difference in pips between the Bid and the Ask quote
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Square Forex
The term means that the buy positions and the sell positions on the same asset are equal. It is also used when there are no opened trades.
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Stock Index
represents a compilation of stocks to measure the value of a stock market sector.
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Stock market
(securities market) is a segment of the financial market where securities are traded.
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Stop loss
is a pending order to close the losing position when it reaches a certain price
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Stop out
A forced closing of a position without the client's consent and prior notification in the event of lack of funds to maintain the opened position.
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Sturdy beggar
is a term denoting someone who is able to work, but begs or wanders for a living instead.
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Support level
lowest channel’s borderline
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Swap
the amount of money deducted from or added to a client account for the overnight position
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Take Profit
A trading order that allows a trader to take profit when the price reaches a certain level. The order helps a trader to reduce risks. The take profit order for a chosen trading instrument will close the transaction automatically as soon as the price reaches the specified level. In an open trade, take profit can be set at any time.
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Technical analysis
A popular way of forecasting a price behavior on the forex market. The technical analysis is based on the opinion that a price change in the past will be repeated in the future. Confirmation of previous patterns of market behavior are searched with the help of price chart analysis that detects certain graphical patterns that are interpreted as signs of a possible price move in one direction or another.
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The Organization of the Petroleum Exporting Countries, the OPEC
was established in 1960 by the world’s largest exporters in order to create common oil policy and ensure stable prices on global oil market.
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Ticker
a unique identification number given to each open position or a pending order in a trading platform
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Time frame
Refers to the time period of the chard chosen to display the price move on the forex market. Time periods in trading platforms include: 1 minute (M1), 5 minutes (M5), 15 minutes (M15), 30 minutes (M30), 1 hour (H1), 4 hours (H4), 1 day (D1), and 1 month (MN).
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Tom-Next
Short for tomorrow-next day. The process of moving the settlement value date on an open position forward from one business day after the trade date (tomorrow), to the next valid value date (next).
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Tool
A currency pair or a contract for difference (CFD)
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Trade balance
is a difference between the monetary value of exports and imports over a certain period of time (for example, a year). It is calculated for both separate nations and groups of countries and includes both actual transactions and those carried out on credit.
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Trade deficit
is a negative trade balance. Merchandise trade balance of a country is a difference between the value of exports and that of imports over a certain period of time. Merchandise trade balance includes all the actual transactions and those carried out on credit.
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Trade forecast
An outlook for future changes on the forex market. It is carried out through analysis of financial information and related research studies.
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Trade operation volume
number of lots multiplied by lot size
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Trader
person, who trades currency on the Forex market in order to earn profit
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Trading Account
unique personalized stock-taking operations register on the trading platform, where complete closed transactions, opened positions, non-market operations and orders are reflected
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Trading account
A unique account of a trader with a unique number where all trading operations of a trader are displayed, including deposit and withdrawal of funds, all pending orders and complete history of an account.
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Trading hours
Operating time of the world's financial markets such as London, New York, Hong Kong and others. Trading hours of exchanges located in different parts of the world differ. In the context of the forex market, trading hours mean the time when transactions can be made - round the clock on weekdays.
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Trading operation
an act of buying or selling any instrument performed by the client
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software and technical facilities that provide the transmission of financial trading information in real time mode, execution of trading operations with account of mutual obligations between the client and the dealer, and control of conditions and restrictions. For the purposes of the present regulation, it consists of "Server" and "Client terminal"
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Trading range
It occurs when currency rates on Forex move in a certain price corridor. The lower limit is formed on the support level, while the upper limit is located on the resistance level.
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Trading strategy
A system of trading on the forex market based on a certain approach to market forecasting. The most widespread strategies include trading with the help of Bollinger bands, moving averages, breakthrough of resistance levels, etc.
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Trailing stop
is a pending stop loss order automatically moved at a specified distance from the current price
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Transaction
trade operations where money resources move from base currency into quoting currency and vice versa
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Trend
is the current general direction of a price movement for a substantial period of time. There is an uptrend (bullish trend), downtrend (bearish trend), and non-trend (flat or sideways movement)
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Trend lines
the straight lines with a positive slope, plotted on a graph through low points when the tendencies are uprising, and with a negative slope, drawn through the high points when tendencies are declining; the lines define the current trends; the trend line gaps usually signal tendency changes
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TSE (Tokyo Stock Exchange)
consists of more than 2,500 Japanese and foreign largest companies that are members of this stock exchange. It takes the second place in the world by capitalization after New York exchange.
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Turnover
Turnover is an aggregated cost of all executed trades in a specified time period.
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Two-way quote
The type of a quote that gives both the bid and the ask price of an asset.
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Unemployment Rate
is calculated by dividing the number of the jobless citizens by the number of the employed or by the total number of people of a certain population category. In most cases, the unemployment rate is expressed as a percentage.
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Unrealized gain/loss
It is a theoretical gain or a loss of opened positions calculated in accordance with current market prices as defined by a broker in its sole discretion. When the position is closed, unrealized gains or losses turn into realized gains or losses
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Uptick
New price that is higher than the previous one.
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Usable margin
is a part of deposit not involved in trading which can be used to open new positions (orders). It is denoted as “Free” in the trading platform
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Used margin
is the blocked part of the deposit, which is used to cover potential losses on open orders. In the trading platform it is displayed in the Margin field
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Value date
A date on which FX trades settle, i.e. the date that the payments of each currency are made.
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Variation margin
Additional amount of deposit you need to make to your trading account in order to maintain sufficient money for loss deduction after significant losses have taken place
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Volatility
is instability, the measure of how much the market conditions, demand or prices change
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Wayne Swan
is the Treasurer of Australia.
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Wing Lung Bank
is a wholly owned subsidiary of the sixth largest Chinese bank China Merchants Bank; it is based in Hong Kong.
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Wing Lung Bank (Trustee) Limited
is a 100% sister company of Wing Lung Bank Limited, offering full range of services related to renting and managing real estate.
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Wolfgang Schaeuble
is a German politician, a member of the Christian Democratic Union of Germany. He has been the Federal Minister of the Interior since 2005 and Federal Minister of Finance since October 2009.
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Xie Xuren
is China's Minister of Finance.
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ZPMC (Shanghai Zhenhua Heavy Industries Company Limited)
is a manufacturer of cranes and large steel structures.
