Forex Glossary
ADX (Average Directional Index)
A standard technical indicator that measures the strength of currency trends.
Ask Price
The ask price is the price at which traders can buy the base currency.
Aussie
Slang for the AUD/USD currency pair.
Base Currency
The base currency is the first currency named in any currency pair. The value is determined against another currency’s value.
Bear
When the market is pessimistic with lowering prices.
Bid Price
The bid price is the price at which traders can sell the base currency.
Broker
The middleman which you can go to in order to trade currencies.
Bull
When the market is optimistic with rising prices.
Cable
Also known as Pounds Sterling. Slang for the GPB/USD currency pair.
Commission
The commissions you need to pay the broker for operation handling.
Counter Currency
The counter currency is the second currency in any currency pair. For example, in the following currency pair AUS/USD, USD is the counter currency.
Currency Pair
The two currencies that are being bought and sold as a pair by the trader.
Day Trading
The technique of making all buying and selling transactions within one day.
Flat (Square)
When you are in a neutral state as all of your positions are closed.
Forex
Forex stands for Foreign Exchange. Read more about Forex on our About Forex Page.
Kiwi
Slang for the NZD/USD currency pair.
Leverage
Leverage is where you can get a loan from your broker which then enables you to trade with a small amount of capital. It can increase your potential profit being made, but it can also increase your risk.
Long Position
Going long means opening a position in which the trader buys currency in hopes that this currency’s value will increase (buy low, sell high).
Loonie
Slang for the USD/CAD currency pair.
Margin
The minimal cash deposit that you have to put in, in order to do a transaction.
Pip
The pip is the smallest price increment in the last digit of the currency rate. It is usually the fourth digit after the decimal point.
Price Trend
Where there is constant movement of currency prices in a certain direction. Traders try to spot trends in order to increase their potential of making a good money return.
Rate
Rate or quote is the price of one currency against another.
Realized Profit/Loss
Your gain or loss for already closed positions.
Short Position
To go short means to open a position in which the Forex trader sells currency in hopes that this currency’s value will decrease (sell high, buy low).
Spread
The spread is the difference between the bid price of a currency and the ask price of a currency.
Swissy
Slang for the USD/CHF currency pair.
