Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% 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. 81% 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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Price action in one of the three market directions: up, down or sideways.

See Elliott Wave Theory.

A continuation price pattern.  It consists of two converging trendlines that intersect at a point called the apex. Wedges usually slant in the opposite direction from the prevailing trend.  Hence, a falling wedge appears during an uptrend whereas a rising wedge appears during a downtrend.

See Linearly Weighted Moving Average.

Sudden price movements in the opposite direction, usually leading to false or bad signals. For example, while the price is rallying upwards suddenly it swings direction and follows a downward path until it bounces up again.  It is a characteristic of volatile markets.
A technical indicator developed by Larry Williams. It is used to identify extreme price movements i.e. overbought and oversold levels. It uses an upside-down scale. Readings from 0 to -20 imply overbought levels whereas readings between 80 and 100 imply oversold levels.  The %R indicator often anticipates reversals as it forms a top and turns down before the underlying financial instrument does and similarly, it forms a bottom and turns up before the price does. To calculate %R, take the difference between the Highest High of the last n periods and the current closing price - this is the dividend.  Furthermore, take the difference between the Highest High of the last n periods and the Lowest Low of the last n periods - this is the divisor. Finally multiply the quotient by -100.

See KRW.

Tala.  The currency of Samoa.  It is subdivided into 100 sense.
West Texas Intermediate: WTI is considered one of the major benchmarks for crude oil pricing globally.  It has a low Sulphur content (sweet) and it has a relatively low density (light).  Hence, it is also known as Texas Light SweetIt is listed in the New York Mercantile Exchange's oil futures.
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