How to Learn Forex Trading Fast: a Trader’s Dictionary

Accrual on Forex is a referral to distribution of discounts and premiums that are directly related to interest arbitrage, also known as swap, during the time of transaction’s processing.

Analyst of the market is a person or in some cases a company, who specializes in reviewing various aspects of Forex trading and builds forecasts on what has a chance of taking place at the market next. The analysts can vary in style and type of analysis, provide their services for free or at the fixed price. Usually the result of analyst’s work is trading recommendations that will suggest to traders what are potential point of entry or exit, and when is it best to buy, sell or hold.

Appreciation of a certain currency or asset is an indicator of its value strengthening caused by the increase of demand.

Arbitrage trading strategy involves processing several transactions over a short period of time, normally involving three overlapping currency pairs (for example USD/GBP, GBP/EUR and EUR/USD). The profit comes from small price differences that add up due to the combination of specific pairs.

Ask, also referred to as offer, is a variation of a market price that defines a selling point. The term goes hand in hand with the word “bid” which is a definition of a purchase value quotation. Simply put, ask is the price at which a trader will be able to purchase a certain currency in relation to the currency they will be using for the purchase (exchange).

Bar chart is one of several most common market charts, presented in a form of vertical lines of various length and color, completed with short horizontal markings at the top and at the bottom. Each bar will represent a price of a certain currency over the chosen period of time. The top marking will define the price at which the currency started during this time and the bottom - where it ended. The peak and the bottom end of each bar will represent the highest and lowest value for the currency in question over that period. The color will indicate the relation of the opening price to the closing one. For example, if the price at the open was lower than the price at the close, bart will be considered bullish or in other words upward. Similarly, if the price at the open was higher than the closing one, the bar is bearish and shows that the value has decreased.

Base currency is simply the fist currency mentioned in every pair. The currency pairs are built in a way that the indicated value reflects the relation of the first (base) currency to the second one and is usually expressed numerically with several figures after the decimal point.

Bear or bearish market is a generally downward movement of a specific currency over an extended period of time, reflected in the gradually decreasing value of the currency in question. Bearish market is not the same as the bearish trend, since the trend will not last as long and will be interchanged with an upward (bullish) trend much sooner. Respectively, bears are the market participants who count on the decline of the market and tend to hold short positions.

Bid as mentioned earlier, is a price at which the market will be buying a currency or an asset. So, in other words, this is a price quotation at which the trader can sell the currency.

BIS is an abbreviation for Bank for International Settlements, and it is one of the very few banks we will be covering here, due to it basically being the central bank of other international central banks. It is BIS's decision and activity that has the most impact on the modern currency exchange market and it will without a doubt mentioned constantly by brokers, traders and analysts.

Bollinger bands is a technical analysis tool that consists of three moving averages, with the one in the center being the actual moving average, the top one indicating the possible level of resistance, and the bottom one serving as a potential level of support.

Broker can be described as a person or a company that operates by gathering the buyers and sellers, serving as a middle-man between them and profiting off commission fees that can be applied in a variety of ways. Choosing the right broker plays a crucial role in the success of a trader's journey and has to be taken seriously. A good Forex broker is the one that focuses on their clients by providing an efficient amount of support and informational material to ensure the positive outcome of each trader’s experience.

Bull or bullish market is a complete opposite of the bearish market described above, meaning that this is a market condition in which the value of a currency or an asset is increasing over an extended period of time. Just as there are bearish trends, there are also bullish trends that last shorter and get interchanged by the downward movement. Logically, the bulls are trader’s who are counting on the market to continue going up and therefore tend to hold long positions (for example, buying and asset and holding it for a long period of time to sell it at an escalated price).

Cable is a slang nickname for a pair of British pound with the American dollar. The peculiar name was given due to the literal transatlantic cable connecting North America with Britain, that was laid underneath the ocean water in the end of 19th century and served as a primary channel for communication.

Candlestick chart is another type of presenting the market data through the chart form, and it is also the most popular one. Similar to bar charts, candle charts consists of elements called candles or candlesticks. The structure of what is a candlestick in Forex trading consists of each candle having a body, which can be described as a vertical box that can vary in length and color. On top and bottom of the body there are vertical markings often referred to as a wick and a shadow respectively. The top of the body indicates the opening value of the currency in question, while the bottom shows the closing value. The wick and the shadow mark the highest and the lowest values within the taken period of time. Each candlestick will represent a different time portion depending on the timeframe setting of the chart, for example on the daily chart one candle will most likely represent one hour, while on the monthly chart it will be the data indication of one day. Also, just like the bars, candles can be either bullish (usually colored bright green) or bearish (most commonly red).

Carry trade is another popular Forex trading strategy which combines going long on a high interest currency with going short on a lower interest one. The difference in value then results in a profit.

Central bank is a governmental or quasi-governmental establishment in charge of the said government’s monetary policies. Central banks (often abbreviated as CBS) are in control of things like inflation, rate and usually dictate a good amount of market conditions.

Chartist is a type of trader who bases their predictions on technical analysis by using the chart data of past market situations to calculate possible outcomes of the current conditions. Closing a position is a process of terminating an ongoing trade for the purposes of minimizing the losses or gathering profits. A position can be closed by a placement of an opposite deal meant to counterbalance the current position.

Commodity currency is a currency from a country with their economy strongly based on the export of natural resources also referred to as commodities (such as oil, metal, food items etc.), more often than not this term is used to describe Australian or Canadian money.

Components are currency pairs that involve the United States dollar and form a so-called cross. For example for the cross pair of EUR/GBP the components are EUR/USD and USD/GBP.

Corporates is a common way to refer to corporations that participate in the market. They normally do not tend to affect short term trading, since they come in to the scene with long projections and plans.

CPI is an abbreviation for Consumer Price Index, which measures the inflation and play an important role in the fundamental analysis of the Forex market.

Currency is a monetary system, or in other words, money that have been issued either by the government or by the central bank in a particular country. For example, the currency of Japan is the Japanese yen (JPY).

Day trading is a strategy consisting of opening and closing the trades over the course of one day. It is considered a short-term strategy as the trades are rarely carried overnight and therefore tend to last anywhere from several minutes to a couple of hours. It is important to mention, that although the concept of day trading is very attractive for the market newbies with the entire “get rich fast” idea behind it, it is a strategy that requires a high level of skill and knowledge as it focuses on dealing with extremely small time frames. That is why day trading should only be considered by professional traders, who have spent a decent amount of time trading currency.

Deal is a trade processed at the current live market price as opposed to an order.

Dealer is a person or sometimes a company that unlike the broker, only takes one side of the transactional process. Dealers profit off the price difference that occurs by closing the following trade with another participant.

Depreciation is a gradual decrease in value of a currency or an asset in relation to the currency or an asset it is paired up with. Depreciation most often happens to currencies the value of which is dictated by the supply and demand factors in the foreign exchange market.

Devaluation of a currency is a monetary practice that consists of an intentional lowering of a specific currency’s value in relation to another currency within the pre-established exchange rate corridor.

This is done to boost the economy by lowering the prices of a country's goods and services and therefore making them more competitive on the international market. Divergence is a technical analysis term that describes a discrepancy between the movement of the price and the direction of momentum. Divergence can be both bullish and bearish and is read as a signal for significant transitions in the price movement. Bullish divergence takes place when the price of the currency achieves a new low, while the momentum indicators starts going up. And the bearish divergence is the opposite. Both divergences result in a reversal in which the price starts following the direction of momentum.

DOW or DIJA is a code for the Dow Jones Industrial Average - a crucial fundamental indicator which reflects the performance rate of 30 major American companies including Apple, Boeing, Coca-Cola, Disney, Microsoft, Visa and others.

Dovish is way to describe a softer policy in regards to the monetary system which usually results in lower interest rates for the specific currency.

Economic indicator is a factor that contributes to the evaluation of the country’s economy.

The economical status is a reflection of certain government's levels of stability and development, which results in strengthening of the said country’s currency. The economic indicators can cover things like the rate of employment, retail sales, the rate suggestions by central banks, the Gross Domestic Product, inflation and so on.

End of the day order is an order that has been set up to complete a transaction (whether buying or selling) at the end of the trading day, which is usually oriented at 5 PM New York time, since the US dollar is the center currency at the Forex market.

Exporters are the corporations that focus on selling their goods and services overseas, which results in them being major sellers of the foreign currency and at the same time purchasers of the local currency. For example Japanese giants like Toyota or Mitsubishi will keep their focus on the USD/JPY pair - exchanging the money accumulated from international sales to the currency that they can use domestically.

Extended market is a market that is viewed as taking a larger leap over a short period of time, in other words a market that has progressed extremely fast in either direction.

Factory orders report focuses on the dollar value of new orders for both nondurable and durable goods. The in-depth report is typically released at the beginning of each particular month and serves an important fundamental analysis component for a number of currencies.

Figure is a way of calling two consecutive zeros within a price quote. For example, if the currency is quoted at 1.7300-04 it is read as “figure-four”. In the scenario where the selling price ends in zeroes it can be described as a “given figure” or “hit figure”.

Fill is a description of an order that has been successfully filled, while the fill or kill order is an instruction to cancel the order entirely in case it cannot be appropriately filled or filled at all.

First in first out, normally abbreviated as FIFO in many industries, on Forex relates to the order in which the orders are being filled in regards to the same currency pair, meaning that the positions that have been opened first will be the first ones to be closed.

Fix is an indication of one of several particular times within a day, during which the majority of currency has to be purchased and sold to fulfill the order of the commercial customers. The pre-set times are location oriented and are usually associated with extreme volatility.

Flat or square is a slang used by dealers to describe a position that was fully reversed, therefore reaching a sum of 0 and referred to as flat. For example, buying one hundred thousand and then selling one hundred thousand.

Forex is a short version of the words Foreign Exchange combined together, often mentioned as FX. Forex is a global currency exchange market with extremely high transaction volume (liquidity) - over 5.3 trillion American dollars are traded on FX every day making it nearly 220 billion per hour. Although the major participants of the foreign exchange market are banks and corporations, there is also a good share of individual traders who manage to profit from currency exchange. The key to trading on your own and becoming successful is the right mindset that involves knowledge, patience and the ability to remain calm in all sorts of situations, since the currency market can be both very fast-moving and unpredictable.

Fundamental analysis on Forex is one of the main ways to analyse the market data and forecast the upcoming events. Fundamental analysis evaluates a number of factors such as political, economical and social situation in the country that controls the currency that is being analysed. It is important to note, that unlike the technical analysis, fundamental one is very subjective and does not have set measurement parameters. That is why it is widely suggested to either find an ultra reliable source of analysis signals or master the analysis yourself in order to guarantee the most positive outcome for your trades.

G7 and G8 are the groups of nations that have high impact on the international economy situation. The G stands for “group”, although it is often interpreted as “great”. G7 consists of Canada, France, Germany, Italy, Japan, United Kingdom and the United States of America. G8 is the same participants with the inclusion of Russian Federation.

Gap or the process of gapping is quick leaps in the market during which the price value jumps up or down several levels without any actual trading. The gaps very often follow important economic report releases and news announcements, both scheduled and unscheduled.

Gearing is another word for leverage. You can find out what is leverage in Forex later on.

GER30 or DAX is an index that indicates the rate of performance for 30 major German companies and therefore the prices for their stocks. The index includes companies like Adidas, Deutsche Bank, Lufhansa, Siemens and Volkswagen.

Going long or longing is purchasing a currency (or any other asset) with the potential of an investment or speculation, in the hopes that the value of a purchase will increase over time and result in profit from reselling it.

Going short or shortening is, very logically, the opposite of going long. It is a sale of a currency, often without the asset being owned by the seller. The shortening occurs when the seller believes that the price will decrease.

Gold is a precious metal with a high level of impact on the foreign exchange market. Historically physical gold was a backup of monetary value of the majority of currencies. Nowadays, the main reason traders should track the value of gold is because some currencies follow it (like the Australian dollar, for example) and others tend to move in a complete opposite direction, like the American dollar.

Gold certificate is a document that gold traders use an instrument to purchase and sell the commodity in question without having to physically transporting and storing the metal.

Good for day is a type of order that will only be open until the end of the day, unless it is filled sooner. In case it is not it will be automatically cancelled.

Good until cancelled (Good ‘til Cancelled - GTC) is an order to purchase or sell an asset that will keep open until it is filled or cancelled. Similarly, good until (‘til) date is an order instructions to close on a chosen date, unless it is filled before.

GDP or Gross Domestic Product is an economic indicator which reflects the summarized value of all goods and services produced domestically over a specified time period, most commonly - over the course of one year.

Gross national product is the GDP combined with the total amount of investment or overseas employment.

Guaranteed order is the one that will definitely be filled at the requested price and it serves as a great tool of protecting the tarder from gapping. Guaranteed stop is a stop-loss type of order which guarantees to close the position at the chosen level, disregarding of gapping or going past the levels of support or resistance.

Hawkish is a way to describe monetary policies that results in escalated interest rates, even without initial necessity for the escalation. It is often done to control the pace of economic growth and/or tackle inflation. As we learned above, the opposite of hawkish is dovish.

Hedge is a risk management technique used by traders by opening a position or several positions which will act as a balance to the primary position. Which means that in the scenario where the primary position did not come to a desired outcome, the trader will not be unprofitable due to the hedge.

Industrial production is an economic indicator which measures the production value of everything contributed

by manufacturers, utilities and mines. While not being the key indicator, industrial productions affects employment rates and as a result personal income data, which are known to play important roles in fundamental analysis.

Inflation is a measure of the rate at which the price level of selected products and services increases over time. With the prices increasing the purchasing power of the currency goes down, indicating high inflation. This way, for example, a loaf of bread in the United States went from costing one dollar in the eighties to nearly four dollars in the early 2010’s.

Intervention on Forex is an action by a single central bank or a group of central banks to alter the value of a certain currency by entering the market.

Introducing broker is an individual or a company that serves as a source of new traders for an existing broker. Becoming an introducing broker is often associated with making money off Forex without becoming a trader and is considered a popular way of making additional income.

Japanese economy watching survey is one of the sentimental analysis indicators for the JPY, which focuses on tracking the overall mood of service providers that deal with customers directly such as hospitality workers, drivers, call center operators. When the result points to a number above fifty, it generally suggest an improvement in JPY sentiment.

Japanese machine tool orders it another measure of Japanese economy, that focuses on the total amount of orders from Japanese machine producers and their summarized value. Logically, the stronger the data, the higher the chance that the economy behind JPY is going through expansion.

Keeping the powder dry is a somewhat peculiar slang for limiting the amount of your trades or even abstaining from trading altogether, or simply staying alert and concentrated during narrow market conditions. The origins of expression track back to the beginning of 19th century where it was used in reference to gun powder (wet powder does not ignite), and since then it is mostly used figuratively. It is a well-known fact that in some scenarios deciding not to trade will result in higher profit due to not causing any losses. The traders might choose to keep the powder dry during the low season or when the market, on the contrary, is too volatile.

Knock-in option is one of the two barrier options and is used to minimize the risk. It only activates if the certain price is achieved and gets annulled if it does not.

Knock-out option is the second barrier type, equipped with an ability to completely expire without any consequences in case the underlying option achieves a certain price.

Leading indicators are a category of economic indicators that are considered to have the most influence on the market. Leading indicators can vary from one country to another, as different factors play a main role in each country’s economy. Level is a specific price or a price ranged defined from the technical perspective in order to identify the necessary measures or simply indicate a certain action in the reports.

Leverage can also be referred as margin. The best way to describe what is leverage in Forex is by picturing your initial deposit amount enlarged by a certain amount. The leverage is provided by the broker and serves as a kind of a loan that allows traders to operate with higher amounts and therefore seize more promising opportunities. The leverage ratio is up to the trader and it is agreed upon with a broker prior to the account creation. It is generally suggested to find a golden middle between the minimum and the maximum leverage amounts available in order to manage the risks correctly.

Limit order or limits is a pre-set price restrictions at which the trader wants to sell or buy currency. There are respectively the buy limit and the sell limit, so the purchase will take place automatically when the market price achieved the pre-established buy limit and the sale will happen when the price reaches the sell-limit.

Liquidity of the market is one of the two main characteristics of Forex: liquidity and volatility. The liquid market indicates that there are a lot of buyers and sellers currently interested in a particular currency or a currency pair. In other words, it is the flow of money associated with a constant and more often than not fast-paced flow of money.

Long position is the position that takes place as the trader chooses to go long. This means that a trader expects the value of the base currency in the pair to go up and holds a long position until the price reaches the peak or a satisfactory moment before the peak. Long positions do not have a time restriction and can be held for anywhere between a couple of days to several months. One thing that the trader has to keep in mind while holding long positions is being subjected to swaps - overnight charges applied by the broker.

Lot is a measuring unit used to determine the size of a particular deal. Lots are categorized by size from nano to standard, in which nano can refer to 100 units of the currency in question and the standard to 100,000. The bigger is the lot size, the higher is a price per pip and therefore, the more significant are the trader’s profits.

Margin call occurs when the broker requires additional collateral for the trade in cases when the market conditions are not in favor of the trader, and they need to invest additional funds in order to keep the said position open.

Market order is simply an instruction given by the trader to process an operation - either a purchase or a sale. The orders may vary in settings and serve as a risk management instrument.

MOM is an acronym for month over month, used to address the relation of current data with the data from previous month.

Momentum is a crucial element in technical analysis that can be measured with the help of several indicators. In simple words, momentum indicates the rate at which a certain asset is changing in value. High momentum can occur when the majority of traders simultaneously buy or sell the same currency in order to achieve the price moving in their desirable direction. Momentum traders are typically the ones who build their trades on the intraday chart with the ultimate goal of profiting anywhere from 50 to 100 pips over the course of the day. A great way to picture momentum is to imagine a server on top of the wave - it lasts while it lasts, and the actions need to be taken before it is over.

Net position on Forex refers to the difference between the currency owned and owed by the tarder, in other words a balance between a purchased and sold amounts that has not yet been zeroed out by counterpart transactions.

Offsetting is a process meant to minimize or entirely eliminate the risk associated with an open position by opening an opposite transaction.

Option is an opportunity or a right, but not a requirement, to exchange the agreed upon currency at the agreed upon price on the established day. The foreign exchange market’s option trading is different from other markets as it excludes the necessity of transferring any physical assets (in the case of currency trading - cash).

Order is an instruction to process the requested by the trader transaction. An open order is the one that will get processed when (and if) the market reaches the necessary price.

Overnight position is a trading position that remains open until the next day after opening or for longer. Overnight positions are usually subjected to specific fees referred to as swaps.

Pair of currencies is a combination of two currencies traded in relation to one another. The base currency is listed first and the numerical indication reflects its relation to the secondary currency. For example USD/CAD 1.3162 means that you can get roughly $1.3 Canadian dollars for $1 American dollar.

Parabolic is a characteristic of the market that moves in significant ranges in both upward and downward direction, making it look like a geometrical parabola.

Pip is a short version of point in percentage, and it is used to measure the change in the currency’s value. 1 pip is standardized to equal $0.0001 in the United States dollar equivalent. The word pip is used to describe a trading strategy, indicate the change rate in the currency’s value, measure the profit or losses from a particular trade or combination of trades. There are plenty of fast-paced strategies that focus on collecting profit within small pip ranges, for example a 10 pip strategy, which is a complex variety of day-trading and should be attempted primarily by professionals.

Portfolio is a reflection of the variety of assets that interest an individual trader or a company. Professional Forex traders suggest to diversify your portfolio by either considering to trade several currency pairs or even expanding your horizons to other assets such as commodities. By diversifying a portfolio traders manage to reduce the risk associated with trading by simply not “putting all eggs in one basket”.

Profit is the ultimate goal of every Forex trader and it is calculated as a difference between the amount that has been initially invested and the result account balance at a certain point of trading. Profit is usually used to describe an addition to the funda, however sometimes traders refer to a setback as a negative profit.

Pullback on the foreign exchange market is the price value’s tendency to go in the opposite direction for a short period of time before continuing the overall trend.

Quantitative easing is a technique used by central banks to boost up the economy by purchasing a large amount of a certain currency and therefore magnifying the liquidity of the asset. It can also be referred to as large scale asset purchasing and is exclusively performed central banks.

Quote or quotation is a term that points out to an indication of the price, usually for strictly informational purposes.

Rally is the upward movement of the price which follows an extended period of going down. Although it is characterized as an upward movement, the rallies can occur in both bullish and bearish markets and will not necessarily affect the dominant direction.

Range is a corridor of a price movement defined by the highest and lowest values. The price is defined as moving within range, when it does not break out from the corridor’s limits and this way guarantees a certain level of predictability.

Real money is a way to refer to large scale traders that enter the market with predominantly long positions, such as wealth management companies, insurance companies and pension funds. Their interest in an asset can serve as an indicator of long-term improvement of the said asset’s value.

Resistance is a price limit that is believed to be the maximum possible value. As the price hits resistance it is most likely to retire and start going down. In the scenario where the price surpasses the resistance level, a new one is established. Resistant levels can be mathematically calculated using the technical analysis tools.

Retail sales is an economic indicator that reflects the consumer’s behavior and is widely used to measure the economical conditions in the country. The logic behind it is very simple - the more a nation buys, the stronger is their economy and therefore, the more values is their currency.

Revaluation is the opposite of devaluation and defines a market condition when a specific currency is allowed to strengthen and grow in value. Only the government is capable of affecting the value of their currency in such a way.

Risk is an inevitable part of foreign exchange trading since the market conditions tend to get volatile. Taking a big risk during trading is associated with proportionally large rewards as well as equally large losses. Adopting a set of risk management techniques will allow the trader to worry less and improve the level of concentration and success.

Rollover in Forex trading is a way of extending the trade by closing it at the current day’s price and at the same time reopening it at the upcoming day’s value. This is done automatically in most cases if the trader did not close a position without a standard two day period after it has been opened.

Settlement in currency trading is a process of summing up the transaction and recording it into the books with all the necessary details. The words settlement can be use in regards to both physical exchange and the virtual one.

Short covering is a procedure taken by currency traders who were selling during the downward price movement, characterized by the same traders buying the sold assets back.

Short position occurs when the base currency in the pair is being sold. The short positions are associated with investment type that is benefitting from the reduction in the price. On of the ways to profit from a short position is to sell the currency at the current price and buy it back when the price falls even lower, this way collecting the price difference as the gain.

Short squeeze is a reference to a market scenario in which most of the traders are selling and then an outside factor (for example, a news release) forces them to immediately start buying, by which the sharp escalation in price value is caused.

Sidelines are the traders who choose to abstain from trading due to a variety of reasons. These traders can also be referred to as sitting on hands.

Slippage is a common name of a difference between the price that was offered and the price that was actually received. This occurs usually when the market conditions change rapidly and unpredictably.

Spot market is a way to call market where the trades happen “on the spot” - immediately and at the current price, in turn referred to as spot price. Spot trades normally get settled within two working days.

Spread in Forex is the difference between the ask and bid prices of the currency in question. This is the most basic way of currency brokers to make money and can also be referred to as a type of commission. The spreads can be either fixed or variable, with fixed ones tending to be slightly cheaper for the traders.

Stop entry order is used to both buy above the current value or sell below it. Stop entry can serve useful when the trader has a high certainty that the market will go in the specific direction and has a goal entry point in mind.

Stop loss is a key risk management tool, used to minimize losses by either selling at a certain point below the current value or buying at a certain price above it. It is important to understand that the stop loss will not necessarily happen at the exact requested price, however it will get triggered by it and the execution will take place at the next available point.

Stop order is an exit tool which will automatically purchase or sell an asset as soon as it reaches pre-established value. Stop orders are ineffective in the scenario where the market has fully gone out of the predetermined range, in which case the order will be filled at the next available price.

Support level is the opposite from the level of resistance as it draws a line below the current value and usually determines a point at which the price will bounce up, shall it drop that low. Similar to resistance, in case the support gets surpassed a new trend is starting and new level of support need to be calculated.

Swap on Forex is an interest amount that you can be either earning or paying due to holding a position open overnight. The technical process behind a swap is a literal simultaneous sale and then a purchase of the same currency at the updated value.

Technical analysis is one of the market analysis approaches, that also happens to be the most common one. Unlike the highly subjective fundamental analysis, technical analysis can be considered purely mathematical and therefore, relatively subjective. The main idea behind technical analysis is that the price value itself holds enough data on why it reached where it did and where is it most likely to head next, based on the study of previous market data. In technical analysis the main instrument is the chart - a collection of price value data over a specified time period. In addition to that an analyst can choose from a wide variety of technical indicators to extract specific data from the chart and build their predictions accordingly.

Trading strategy is a system of rules a trader chooses to follow in order to achieve a specific result. The main benefit of what is a Forex trading strategy is consistency. By pre-determining the ways to act in every specific situation, a trader disciplines themselves and automatically avoids being subjected to the risks of emotional trading. And as for the new traders, finding a suitable trading strategy can be vital as it will allow them to know exactly what to do when they lack knowledge of choosing the right action path on their own.

Trailing stop is a smarter type of the risk managing instrument, being an order that will move alongside with the market if it is moving at the preferred by the tarder direction and will automatically close the tarde once that direction is changed.

Trend is a price direction that occured due to a specific factor or sometimes on its own due to the high volume. Traders can profit from both going with the flow and against the trend depending on their preferred trading style. Trends are typically temporary and do not necessarily dictate the overall market condition.

Ugly market is the market in which the conditions tend to change rapidly, unpredictably and often against the expectations of the majority.

Unemployment rate is an important economic indicator due to it reflecting the financial well-being of the nation that controls the currency. As a general rule, the higher the unemployment rate the weaker is the economy and therefore - the currency.

Value date is a pre-established day at which the parties agree to settle a transaction on the agreed upon conditions. Can also be referred to as maturity date as an indication of the trade being ready (mature enough) to get processed.

Volatility is the second of the two main characteristics of Forex market liquidity. Although volatility is a description of conditions where the certain asset’s value moves up and down at a rapid pace, which can be sort of intimidating, it is also the main reason why currency trading is profitable.

Wedge is one of the chart pattern variations described by a graph formation that along with forms something similar to a pie wedge - the price moves within a range with the top and bottom limits of the range getting more and more narrow. Wedges can be both upward and downward and usually serve as a tool for predicting reversals.

Whipsaw is the market that moves rapidly in each direction, just like the instrument it was named after. This is an indication of a highly volatile and aggressive market condition, suitable mostly for swing traders.

XAU is the code for Gold index. Although most currency traders do not get involved in the commodity trading, Gold (XAU) and Silver (XAG) have a significant amount of influence on specific currencies, and that is why going one extra step as a part of your analysis to find out the situation with precious metal prices can play a great role in currency trader’s success.

YOY is an abbreviation that, similarly to MOM, translates into year over year and serves as an acronym for describing market data of the ongoing year compared to the data from the previous one.

Zero sum game often serves as a description of amateur Forex trading, where the amount of winners and losers adds up to a balance of zero, meaning that people who profit on Forex benefit from the ones who don’t. The trader’s main job is to remain on the profiting side for the most part and always have a plan for whatever is coming up next.
 

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