Trading Glossary

This is a glossary of trading terms.
You can look up terms and understand the meaning of the terms.

TRADING GLOSSARY

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Ask Rate

The price at which a trader accepts to buy a security.

Bid Rate

The price at which a trader is prepared to sell a security.

Base Currency

In a currency pair, the first currency in the pair is called the base currency. For example, in the USD/JPY pair, USD is the base currency.

Cross Rate

FX Margin The exchange rate of a currency combination that is considered non-standard in transactions. For example, GBP / JPY trades are cross currencies because they are composed of two major currency transactions, GBP / USD and USD / JPY.

Central Bank

The Federal Reserve Board (FRB) of the United States, the European Central Bank (ECB) of Europe, the Bank of Japan (BOJ) of Japan, the Bank of Korea (BOK) of Korea, And so on.

Chartist

A person who analyzes trends with charts and graphs and predicts future trends. In particular, we refer to traders who make technical analysis the main basis for trading.

Day Trading

A trade opened and closed within one day.

Dealer

A person who is dedicated to trading or who is a trading partner. These are different from brokers who act as brokers as the subject of the transaction.

Economic Indicators

It is an indicator of the economic trends announced by governments and central banks in each country. Well-known indicators include unemployment and GDP (Gross Domestic Product), inflation, and retail sales.

Forex, Foreign Exchange

Selling other currencies at the same time to buy certain currencies.

Foreign Exchange Risk

This is the risk that occurs when the exchange rate moves against the expectations.

Fundamental Analysis

The impact economic and political events have on prices in financial markets (interest rate announcements, unemployment rate, etc.)

Initial Margin

This is the guarantee required to enter the position as a guarantee for future transactions.

Liquidity

The volume available in the market for a specific currency pair.

Leverage

Leverage is offered by brokers to maximize traders' buying power by giving them the ability to deposit a small amount of funds and trade larger volumes. Leverage is expressed in ratio form, so if it is 1:100 for example, a trader's buying power is magnified 100 times.

Loss Cut

To prevent unexpected loss due to sudden fluctuation of currency, it means to automatically expire the outstanding position by the system if the value of the deposit asset is less than the margin margin.

Liquidation

It means that the current position is extinguished through reverse trading.

Margin

This refers to the amount of money needed in your account to maintain an open position.

Margin Call

This is a notification which alerts you that you need to deposit more money in your trading account so there can be sufficient margin to keep existing positions open.

Mark-to-Market

The value an open position would be if it were closed at the current market rate.

OTC, Over the Counter

The traditional way of trading forex was ‘over the counter’, meaning traders made forex transactions over the telephone or on electronic devices.

Pip

Pip stands for Percentage in Point and it is the smallest price change that can be seen in an exchange rate. In most cases currency pairs are priced to four decimal points and the smallest change can be seen in the last decimal.

Rollover

In forex, the rollover rate is the interest rate that traders pay or earn when they hold (rollover) a position open overnight.

Short Position

A position where you can earn money if prices fall.

Swap Point

FX margin This is the amount due to the interest rate difference between the currencies when rolling over your position in the next trading day. This will change from time to time depending on market conditions.

Slippage

This is when a trader executes an order at a price which is very different to the price they expected the trade to be executed at. This usually happens during periods of high volatility, when traders use market orders and stop loss orders.

Settlement

It refers to the settlement of the holding position through reverse trading and the settlement of the transaction relationship by paying the settlement profit or loss and swap points.

Technical Analysis

Traders use technical analysis to forecast prices by examining market/historical data through the use of charts and trading indicators.

Value Date

It means the day when payment is received when trading financial instruments. In the case of FX margin trading, funds are paid two business days after the normal trading day.