Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Forex Glossary

Forex Definitions: The Industry’s Most Important Terms Explained

The forex industry is made up of so many definitions that it's easy to forget a few along the way. Do you know your Loonie from your Loti? Can you tell your Shooting Star from your Evening Star? Take the time to get to grips with forex jargon because understanding forex vocabulary is an important step in a trader’s journey.

Since no forex education can be complete without a glossary of basic forex terms, we've compiled one which explains key words and phrases in the simplest way possible. This way, you'll never be lost or confused with forex terminology!

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See Expert Advisor.

See European Central Bank.

A broker who uses Electronic Communications Networks (ECNs) to provide its clients with direct access to liquidity providers.
Monthly survey of consumers’ confidence that indicates the trend of the European economy. A positive reading is good for the Euro.  Released by the European Commission.
EMH holds that all traders have access to news and information at the same time. As a result, the charts ‘price in' all news and information. Prices fluctuate around intrinsic values and any overbought or oversold movements do not last long enough so one can benefit from them. The EMH assumes that the best strategy is to buy and hold.
Egyptian Pound.  The currency of Egypt. It is subdivided into 100 piastres and 1000 millimes.
Technical Analysis theory developed by Ralph Nelson Elliott.  Financial Markets follow a form of 5 waves. Three impulse waves (1, 3 and 5) in the direction of the trend and two corrective waves (2 and 4) in the opposite direction. One complete cycle is made up of 8 waves.

See Exponential Moving Average.

Monthly survey of manufacturers in New York State. Participants are asked to report changes on a variety of economic indicators- from the previous month and six months ahead. A reading above zero is good for the currency where a reading below zero is negative.

Released by the Federal Reserve Bank of New York.
Monthly report of current month’s employment numbers compared to the previous month. An increase of employed people is good for the currency where a decrease is negative.
Quarterly report that shows the percentage change of the compensation costs (salaries) for the government and private sector. Released by the Bureau of Labor and Statistics.

A Japanese candlestick pattern signaling a bearish reversal.

It forms at the top of an uptrend or near a resistance area.

It consists of two candlesticks.

A long black candlestick is formed at the top of an upntrend, preceded by a small white candlestick.  The body of the small white candlestick is completely engulfed by the body of the long black candlestick.

A Japanese candlestick pattern signaling a bullish reversal.

It forms at the bottom of a downtrend or near a support area.

It consists of two candlesticks.

A long white candlestick is formed at the end of a downtrend, preceded by a small black candlestick.  The body of the small black candlestick is completely engulfed by the body of the long white candlestick.
It’s a Technical Analysis indicator formed by two simple moving averages.  One of them is shifted upward and the other one downward by a fixed percentage.  The percentage is analogous to market volatility.  The two shifted moving averages define the upper and lower bands of the envelope. Buy signals are generated when prices reach the lower band whereas sell signals are generated when prices reach the upper band.

It’s a technical tool to draw a channel (uptrend or downtrend).

The distance between the two parallel lines (basic trendline and return line) is equal.
It’s a price charting technique developed by Richard W. Arms Jr. It shows the relationship between price and volume. The top of the diagram shows the high price for the period. Similarly, the bottom of the diagram shows the low price for the period.  The width of the diagram reflects the volume for the same period.
Nakfa. The currency of Eritrea. It is subdivided into 100 cents.
Ethiopian Birr. The currency of Ethiopia. It is subdivided into 100 santims.
Euro. The currency of the eurozone. It is subdivided into 100 cents.

See EUR.

The ECB was established in 1998, located in Frankfurt (Germany), to manage the euro, keep prices stable and conduct EU economic & monetary policy. Its main aim is to keep prices stable, thereby supporting economic growth and job creation.
The European Union member states that adopted euro as their currency.

A Japanese candlestick pattern signaling a bearish reversal.

A long white candlestick forms in the direction of the prevailing trend, signifying that the upward movement is still in force. The next session gaps above, forming a small candle, in this case a Doji that acts as an obstacle to further rise.  A long black candle drives the market lower, well into the long white candle’s body and more specifically, below its mid-point -Indicating a bearish reversal.

A Japanese candlestick pattern signaling a bearish reversal.

A long white candlestick forms in the direction of the prevailing trend, signifying that the upward movement is still in force. Next session gaps above, forming a small candle that acts as an obstacle to further rise.  A long black candle drives the market lower, well into the long white candle’s body and more specifically, below its mid-point-Indicating a bearish reversal.

A type of Order execution available on MT5. Orders placed on the MT5 are sent to an exchange (i.e. liquidity provider) to be executed at current market offers.

The rate at which one currency can be exchanged for another.
When a trade is carried out and completed.
They appear at the end of a trend (either uptrend or downtrend) after the identification of the breakaway and measuring (or runaway) gaps. It signals that the prevailing trend may be coming to an end.

It’s an annualized report that measures sales and prices of existing single-family homes in the US overall, and gives breakdowns for the West, Midwest, South, and Northeast regions of the country.

Released monthly by the National Association of Realtors.
It’s an automated set of detailed programming instructions on how to open, modify and close trading positions without human intervention.

EMA takes into account all available prices in its calculation and assigns more weight to the most recent prices.

EMA = (Price current – EMA previous) * multiplier + EMA previous

Where multiplier = 2/Periods + 1

This refers to the amount invested in a security and exposed to market risk.
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