GoldTech Media Services OU Estonia Roosikrantsi 2K255, 10119 Tallinn Harju Maakond, Estonia Tornimae 5, 10145 Tallinn, Estonia

Glossary

Royal Capital Pro explains to you the most important Forex terminology, as well as the trading glossary. This includes terms commonly used in stock markets in general.

Broker

A company which acts as a mediator between sellers and buyers in return for specified commission. In the foreign exchange market, most of these companies only benefit from the differences between the selling and buying prices.

Andrew's Pitchfork

A technical tool drawn between three successive crests or troughs to estimate the levels of support and resistance that the price is expected to rebound from.

Electronic communication network

It is a type of broker companies which uses electronic networking to connect the buyers and the sellers and to manage transactions directly, without the presence of a third party between the traders and the market.

Doji

It is a financial candlestick chart whose opening price is equal to or a little higher or lower than its closing price. It comes at the end of a direction to show the probability of its rebound. It expresses the confusion between sellers and buyers.

Spot Exchange Rate

It is the price at which an immediate transaction is completed at the foreign exchange market.

Swissy

It is a general term for the Swiss Franc.

Ask price

It is the price at which the investor buys. It also represents the price which is used by the executor to sell.

Bid

It is the price which the investor uses to sell. It also represents the price which the executor uses to buy.

Opening price

The opening price is the price at which a security first trades upon the opening of an exchange on a given trading day

Closing price

The price of a security at the end of a business day in a financial market.

Currency pair

A currency pair includes the two currencies involved in a single transaction. The first currency of the currency pair is called the "base currency" and the second currency is called the "quote currency". Each currency pair has an exchange rate which represents what should be paid of the quote currency to get one unit of the base currency

Bar chart

A chart with rectangles (each representing a category) placed next to each other, in which the length of each rectangle represents the amount of data in each category.

Candlesticks

It is oldest graphical representation for price movement, which expresses the exchange activity using candle-like shapes. Each candle represents the exchange activity in a specific period indicating the closing, opening and highest price.

Point and figure chart

It is a chart representing the price movement regardless of the time factor. It consists of a number of columns represented by the letter (X) and the letter (O), where (X) represents the upward direction and (O) represents the downward direction.

Trend line

It’s a line drawn over pivot highs or under pivot lows to demonstrate the prevailing direction of price.

Up Trend line

It represents the rising trend and is drawn below the price as it connects between ascending troughs (two troughs or more)

Down trend line

It is a line representing the declining trend. It is drawn above the price and connects between two declining crests (two crests or more).

Speed Resistance Lines

It is a tool for technical analysis consisting of three trend lines used to determine support and resistance areas.

Currency options

The options contract is a contract that gives the holder the right (without obligation) to buy or sell a specific currency at a specific rate during a specific period in return of paying a deposit to the option provider.

Bollinger Bands

It is an indicator invented by John Bollinger. It consists of a moving average surrounded by two lines below and above, which are calculated using standard deviation. This indicator is used to measure the degree of variation (volatility) of the given prices and areas of selling and buying saturation.

Greenback

It is a general term for the US Dollar. The name refers to distinctive green color of the Dollar.

Gopher

It is a general term for US dollar/Japanese yen pair (USD/JPY)

Take Profit -T/P

A take profit is the amount of money you intend to make in a trade. In your order, you specify a price at which you will close your trade.

Gravestone Doji

It is a type of Doji candlesticks whose upper shadow is very long. Its opening price equals to its closing price and it appears at the end of the rising trend to indicate the probability of its rebound.

Arbitrage

A trading system that benefits from the price difference for the same share, commodity or currency, by trading it at different places. This type of trade became more difficult due to the technological development in the recent years.

Volatility

It is a statistical measure of the extent of variation of price in a specified period. The degree of volatility increases as the speed and extent of price movement increases either upwards or downwards and vice versa.

Devaluation

It is the process of decreasing the par value of the currency with reference to the prices of gold and foreign currencies.

Purchasing Power Parity –PPP

An economic theory that is used to estimate the required currency transaction so that the exchange rate is equal to the purchasing power of its currency.

Bank of England (BOE)

It is the central bank of the United Kingdom (Britain). It issues currency and oversees the nation’s monetary policy.

Bank of Japan (BOJ)

It is the central bank of Japan. It issues currency and oversees the nation’s monetary policy.

Bank of Canada (BOC)

It is the central bank of Canada. It issues currency and oversees the nation’s monetary policy.

Forex

Foreign exchange market, which is the market to exchange foreign currencies to benefit from the up and down price movement

Over The Counter – OTC

It is the markets which have no central specified place for exchange, where exchange is done through electronic communication networks using computers and mobile phones.

Bretton Woods Agreement

It is an agreement developed after the Second World War in 1944 at Bretton Woods, United States of America. Its goal was to achieve stability in the global economy. The exchange rate of the US dollar was fixed at a value equivalent to 35 ounces of gold, then the exchange rate for other currencies was fixed at a value compared to US dollar … read more

Fixed Exchange Rate –pegging

It is a system for exchange rates where the currency exchange rate is fixed in comparison to another currency, a group of currencies or gold.

Floating Exchange Rates

It is a system for exchange rate, where the exchange rate is determined based on the extent of supply and demand in the foreign exchange market.

Speculation

It is the process of trading at the stock markets at high risk trying to expect the market trend to achieve large and quick profit.

Central Bank

It is an independent agency officially authorized by the government to develop and manage the monetary policy, to issue currencies and to keep the stability of the monetary and banking system of the country.

Currency

Any method conventionally accepted for exchange in a country. This includes paper money and coinage.

US Dollar (USD)

It is the official currency for the United States of America

Euro (EUR)

The official currency of the countries of the European Union

Japanese Yen (JPY)

The official currency of Japan

Great Britain Pound (GBP)

The official currency of the United Kingdom (Britain)

Swiss Franc (CHF)

The official currency of Switzerland

Australian Dollar (AUD)

The official currency of Australia

Canadian Dollar (CAD)

The official currency of Canada

New Zealand Dollar (NZD)

The official Currency of New Zealand

Swedish Krona

The official currency of Sweden

Majors

These are the major pairs. The US Dollar is on one side of it with another major currency on the other side

Minors

These are the pairs which include US Dollar on side coupled to a less commonly traded currency

Crosses

These are the currency pairs which do not include US Dollar.

Counter Currency

It is the second currency of a currency pair. The exchange rate of a pair represents what should be paid of the counter currency to get one unit of the base currency.

British Pound / US Dollar (GBP/USD)

It is one of the majors. Its exchange rate refers to what should be paid of US Dollar to buy one unit of British Pound.

Euro / US Dollar (EUR/USD)

It is one of the majors. Its exchange rate refers to what should be paid of US Dollar to buy one unit of Euro.

US Dollar / Japanese Yen (USD/JPY)

It is one of the majors. Its exchange rate refers to what should be paid of Japanese Yen to buy one unit of US Dollar.

US Dollar / Swiss Franc (USD/CHF)

It is one of the majors. Its exchange rate refers to what should be paid of Swiss Franc to get one unit of US Dollar.

Australian Dollar / US Dollar (AUD/USD)

It is one of the minors. Its exchange rate refers to what should be paid of US Dollar to get one unit of Australian Dollar.

New Zealand Dollar / US Dollar (NZD/USD)

It is one of the minors. Its exchange rate refers to what should be paid of US Dollar to get one unit of New Zealand Dollar.

US Dollar / Canadian Dollar (USD/CAD)

It is one of the minors. It refers to what should be paid of the Canadian Dollar to get one unit of the US Dollar.

Aussie

A general term for Australian Dollar

Long buying

It is the process of buying currency pair by buying the base currency and selling the counter currency.

Short Selling

The process of selling currency pair by selling the base currency and buying the counter currency

Bulls

It is a term which refers to buyers. This is due to an ancient American habit of organizing competitions between bulls and bears.

Bears

It is a term which refers to seller. This name is due to an ancient American tradition of organizing competitions between bulls and bears.

Standard Lot

It is a contract whose value represents 100,000 unit of the base currency.

Mini Lot

It is a miniature contract at the exchange market whose value represents 10,000 unit of the base currency

Micro Lot

It is a contract whose value represents 1000 unit of the base currency

Leverage

It is an option provided by broker companies at the exchange market to trade with a value several higher than their capital in the aim of gaining high profits. Using the financial leverage includes high risk.

Used Margin

It is the amount reserved by the broker out of the client account to execute a deal according to the value of the contract and the amount of financial leverage.

Usable Margin

It is the amount available at the investor account which can be used to start new deals.

Risk management

It is a process of evaluating and determining the degree of vulnerability, followed by developing methods and techniques to control the risk and avoiding its occurrence.

Speculator

These are people who speculate or trade at high risk to gain high profit in a short period of time

Scalping

A way of trading in which the trader initiates a deal for buying or selling a currency pair and keeping it for a very short period to gain some profit. Traders who use scalping rely on making a large number of deals to gain some profit from each one.

Market order

It is the prompt transaction using current market price

Expert Advisor

It is a program that makes and executes investment decisions automatically based on a trading strategy or plan.

Trading Systems

These are systems that use a group of technical analysis tools to determine buying and selling signals, to determine targets points and stop loss.

Buy Limit

It is an order to buy at a price lower than the current market price.

Devaluation

It is the process of lowering the par value for a currency relevant to price of gold and other currencies.

Stop loss

It is an order done by the investor to limit the loss by defining a certain price to exit a deal and to get confined to the current loss.

Commodity Futures Trading Commission

It is a federal agency established by the US congress in 1974 to manage trading in the future contracts and to protect contributing parties from the deception and manipulation that may take place.

Margin Call

It is a process that the broker uses when the loss is equivalent to the investor's balance. The broker ends all remaining deals and all that's left in the balance is considered as used margin.

Flag model

It is a continuous model that resembles a flag in its structure. It is formed rapidly at a narrow range during the movement of the price.

Head and Shoulders model

It is a reflective model that appears at the end of the rising trend. It consists of three crests where the middle crest is higher than the other two and is called the head. The first and third crests are called shoulders and they appear at the same level or close to each other. Sometimes, this model may appear as …. Read more

Rounding Tops model

A reflective model that appears at the end of the rising trend and resembles in its structure an inverted (U) letter. It is considered a long-term model as it takes long time to be formed. It refers to the inversion of the rising trend on the long term.

Rounding Bottoms model

It is a reflective model that appears at the end of a declining trend and resembles in its structure a (U) letter. It is considered a long term model, as it takes long time to be formed and refers to the reversal of the declining trend at the long term.

Rectangle model

It is a continuous model that resembles a rectangle in its structure. It is formed when the prices move transversally between the support and resistance levels parallel to each other, forming crests and troughs at the same or similar levels. The model is beneficial when it is exceeded by entering with the exceeding trend.

Pennant model

It is a continuous model that resembles in its structure the rectangular flag. It is similar to the equilateral triangle that forms rapidly in a narrow price range and represents an area of mild adjustment that precede getting the price back to its previous trend.

Pivot point

It is a technical indicator that calculates a pivot at which the price is expected to rebound ,using an equation that includes the upper and lower price limit as well as the closing price.

Shooting Star model

It is a candlestick reflecting the rising trend, whose upper shadow is at least two times larger than the candlestick body. Its lower shadow is very small.

Hanging man model

It is a reflective model of Japanese candlestick model that reflects the rising trend whose lower shadow is at least two times the candlestick body. The upper shadow is very small or does not exist.

Evening star model

It is a reflective model of the Japanese candlestick model consisting of three candlesticks that appears at the end of a rising trend. It consists of large rising candlestick followed by a small candlestick then a large declining one. The last one may get closed in the first one or can exceed it.

Morning star model

It is a reflective model for the rising trend consisting of three candlesticks. The first one is a large rising candlestick followed by a small sized candlestick then a large declining one that may or may not exceed the first one.

Elliot Wave Theory

It is one of the technical analysis theories. It was developed by Ralf Nelson. It states that prices move in five waves in the main trend and have three adjustment waves in the opposite trend.

Gold Standard

It is a monetary system that determine the value of the currency as an equivalent value of gold, allowing money holders to exchange it for its value of gold at any time. This system was prevalent before the First World War.

Trading Platform

It is a program provided by broker companies and used to execute buying and selling orders

Interest Rates

It is the cost of borrowing money. In other words, it is the value the borrower pays to the lender in return to leaving his money for a specified period.

Group of Eight -G-8

It is a group that includes the leading industrial countries in the world which are: United States of America, Japan, Britain, France, Germany, Italy, Canada and Russia.

Group of seven -G7

It is a group of the seven leading industrial countries in the world which are: United States of America, Germany, Japan, France, Britain, Canada and Italy.

Balance of payment -BOP

It is a measurement for the size of financial transactions and money movements that occur between a country and another one. The trade balance is positive when the money moving into the country is more than that moving out and it is negative when the case is reversed.

Unemployment Rate

It is an indicator for the total number of unemployed people looking for jobs in the country.

Consumer Price Index –CPI

It is a monthly indicator that measure the change in the average prices for a group of goods and services used by individuals. It is considered one of the most important indicators of inflation.

Consumer Confidence Index –CCI

It is an indicator issued monthly by the conference board. It represents the results of the questionnaire filled by more than 5000 families to measure the degree of optimism concerning the current economy status and their expectations for the future.

Retail sales

It is a monthly indicator issued by the Census Bureau of the US department of commerce. It measures the monetary value for the total retail sales by consumers during the previous month.

Oscillators' indicators

They are indicators that are confined by upper and lower limits. They are used mainly to find areas of selling and buying saturation.

MACD indicator

It is an abbreviation for (Moving Average Convergence / Divergence) which is calculated by subtracting the value of simple average of 21 closing, and 26 simple average closing.

Parabolic SAR indicator

A technical indicator used to expect the extent of continuation or reflection of the current trend.

Relative Strength indicator

It is one of the indicators used to determine the market momentum. This indicator compares the strength of rise and the decline trend for a specific period of time. This converts the result to numbers that range between 0 and 100.

Stochastic indicator

It is one of the momentum indicators. It explains the current closing status in reference to the upper and lower limits for the price during a specified period.

Average Directional Index (ADX)

It is an indicator used for technical analysis of the directional strength regardless the direction was upward or downward. Its upper limit represents the resistance level while the lower limit represents the support level.

Fibonacci Retracement Ratios

It is a financial tool that depends on Fibonacci ratios. It is used to predict areas of reflection and to complete adjustment of the previous trend. Thus it represents the levels of support and resistance expected for price to reflect. It is used for ratios 23.6%, 38.2%, 50.0%, 61.8% and 78.6%.

Fibonacci Fan

It is a technical tool that depends on Fibonacci by drawing three diagonal lines representing ratios 38.2%, 50.0% and 61.8% to predict levels of support and resistance.

Wolfe Wave

It is a model that consists of five waves that show the strength of supply and demand and extent of balance between them. It is used to predict the objectives of price movement and its schedule.

Lonnie

It is a general term for Canadian Dollar.

Federal Open Market Committee –FOMC

It is a committee at the US Federal Reserve. It consists of 12 members from the Federal Reserve banks. The head of the New York reserve council is the only permanent member in this committee. The remaining members change periodically. This committee sets the objectives of the monetary direction.

Kiwi

It is a general term for New Zealand Dollar

Cable

It is a general term for the currency pair (Australian Pound / Dollar)

Spreads

It is the difference between buying and selling prices

Base Currency

It is the first currency in the currency pair. It is expressed by a specific amount of another currency called the Corresponding Currency.

Money Supply:

It is the total offered amount of money in the country's economy in a specific period of time.

Reserve Currency:

A currency held by a central bank on a permanent basis as a store of international liquidity, these are normally Dollar, Deutschemark, and Sterling.

Forex Future:

They are contracts that state the buying or selling processes of a certain amount of a given currency at a predetermined price within the due timeframe.

Currency forward:

It is a future contract in which the price is set in order to carry out the buying or selling deal within the due date.

Currency swap:

It is a bilateral contract stating the exchange of a certain amount of currency with the agreement to reverse this process after a specified period of time. Therefore, the currency swap contract contains two subcontracts: one immediate and the other future.

Durable Goods Orders:

They are economic indicators released monthly by the US Bureau of Labor Statistics. They measuree the amount of the new orders set by the local manufacturers for delivering the durable goods to the factories in the short term.

Initial Jobless Claims Report:

It is a weekly report issued by the Ministry of Manpower. It measures the change in the number of the applicants for the unemployment benefits during the previous week, which is a good indicator of the performance of the US labor market.

Market Makers:

They include the brokerage firms, banks or institutions that provide liquidity to their customers and facilitate trading operations through the representation of the other party to implement the process of trading in the stock market or currency or futures contracts.

Mutual Funds:

They are managed by companies that offer its shares to investors and then invest their money in various financial markets to achieve profitable returns.

International Monetary Fund –IMF:

It is an international organization of 146 countries around the world. Its main purpose is to help the Member States resolve the problems related to the deficit of payments' balance and to facilitate the international trade and monetary cooperation among states. This Fund was established by the Brighton-Douz agreement in 1944.

Investment Management Companies:

They are companies that manage the assets of investors in financial markets to achieve profitable returns.

Sell Limit:

It is a selling order offered for sale for a higher price than the current market price.

Buy Stop:

It is a buying order offered for a higher price than the current market price.

Sell Stop:

It is a buying order offered for sale for a lower price than the current market price.

Trailing Stop:

It is used to keep the profits by moving a certain amount of the loss stopping automatically whenever the market witnesses a profit of the investor.

Pip:

Minimum fluctuation or smallest increment of price movement through which profits and losses can be realized.

Hedge:

It is a deal or a set of deals that negatively correlates with the primary deal in order to reduce risk.

Federal Reserve System_ FED:

It is the central banking system for the financial system and monetary policy of the United States.

European Central Bank_ ECB:

It is the central bank for the euro, which administers monetary policy of the Eurozone

Monetary Policy:

It is the policy used by the government or the central bank to influence the money supply and interest rates in order to control inflation and support the currency's stability.

Fundamental Analysis:

It is the study of the factors which affect supply and demand and lead to price changes. Fundamental analysis aims to examine various economic indicators, monetary policies and all of the economic and political factors that cause supply and demand.

Inflation:

The rise in the general level of goods' prices and services and the decline in the purchasing value of the money. Inflation results from an increase of either the demand for goods and services over supply or the cost of production, which leads to higher prices.

Deflation:

It is a general decline in the prices of goods and services due to the lack available currency, the reduction in government spending and the decrease in the consumer and investment spending. Deflation causes many negative economic effects such as high unemployment rate and corporation bankruptcy, etc.

Hyperinflation:

It is the rapid and constant rise in the prices of goods and services, which leads to the currency rapidly losing its monetary value.

Carry Trade:

It is the process of borrowing money at low interest rates from a particular country and investing these funds at high interest rates in another country in order to benefit from the interest rate differences.

Revaluation:

It includes changing the currency exchange rate and it often aims to increase the exchange rate. It happens only when the country follows the fixed exchange rates.

Federal Debt:

It is the average of the increase in the government expenses over the tax revenue. This difference is compensated by borrowing from members of the public through the issuance of government debt securities.

Monetary Base:

It is the sum of exchangeable financial assets including the notes and coins that exist as a monetary reserve at the central bank.

Monetary Reserve:

It is the total government stocks of gold and other precious metal coins that are used to support the national currency and to settle the international transactions and commitments.

Intraday:

They are the short-term deals that are opened and closed during the same individual trading day.

Economic Indicators:

They are statistical data showing the general trend in the economy. They divide into leading indicators which predicts the economic performance, synchronous indications that change with the economic activity simultaneously and following indications that change after the actual change happens.

Gross Domestic Product –GDP:

It is the monetary value of the total goods and services produced in the country during a certain period of time (usually a year). It is the main measuring tool of the size of the economy and its performance.

Balance of Trade –BOT:

It is the difference between the monetary value of exports and imports. If the difference is positive, it is called Trade Surplus. If the difference is negative, it is called Trade Deficit.

Leading economic Indicators:

They are the economic indicators whose results change from improvements to retreat or vice versa before the actual changes happen in the economic performance. These indicators are used to predict the future economic performance.

Technical Analysis:

It is the study of price change using charts in order to predict the direction of future market change based on a key principle. The key principle states that all the events that occur and affect the market movement are illustrated in the charts.

Chart:

It is an illustration of price change in a specific period of time.

Support:

It is the level that is expected to have purchase requests. Its price is expected to jump after an earlier falling movement.

Resistance:

It is the level that is expected to have selling offer. Its price is expected to fall after an earlier jumping movement.

Breakout:

It happens when the price exceeds the levels support and resistance as well as trend without recoiling from it.

Trend:

It is the general trend of price movement. It should be noted that the trending market movement is considered one of the three key principles underlying the technical analysis.

Up Trend:

It describes the general market state when it moves upward: that each top is higher than the previous one and each bottom is higher than the previous one.

Down trend:

It describes the general market state when it moves downward: that each top is lower than the previous one and each bottom is lower than the previous one.

Price Channel:

It is a parallel line if the trend line that painted on the peaks in the case of the upward trend and on the bottoms in the case of the downward trend. The channel's limits represent the support and resistance levels.

Peak –Top:

It is the maximum limit of the price. It is the level from which the price recoils falling after a previous jumping movement.

Trough –Bottom:

It is the minimum limit of the price. It is the level from which the price recoils jumping after a previous falling movement.

High:

It is s the highest price that the price movement reaches in a certain period of time.

Low:

It is s the lowest price that the price movement reaches in a certain period of time.

Line Chart:

It is to a chart that connects prices in a specified period of time. The line chart can illustrate any point in price movement, whether it was the open or the close prices or the maximum or the minimum price, but it is mainly used in the illustrating the close prices.

Chart Patterns:

They are models and patterns which are formed during the price movement. It gives technical indications including either the continuing the previous price movements or reversing them.

Reversal Patterns:

They are technical models that indicate the reflection of the previous trend such as the head and shoulders and the double and triple peaks and bottoms.

Continuation Patterns:

They are technical models that carry on the previous trend. They include triangles, flags, pickets and others.

Ascending Triangle:

It is as a continuing upward model that consists of two trend lines. The first is horizontal, to match between two or more peaks in a horizontal plane, whereas the second matches between two or more upward bottoms. This model can be benefited from after the breakout of the peaks' horizontal level.

Descending Triangle:

It is as a continuing downward model that consists of two trend lines. The first is horizontal to match between two or more bottoms in a horizontal plane whereas the second matches between two or more downward peaks. This model can be benefited by selling from after the breakout of the bottoms' horizontal level.

Double Bottom:

It is a reflexive model that appears at the end of the downward trend. It consists of two bottoms in one horizontal plane or nearby planes separated by a clear peak. This model can be benefited from by buying after the breakout of this peak.

Double Top:

It is the reflexive model that appears at the end of the upward trend. It consists of two peaks in one horizontal plane or nearby planes separated by a clear bottom. This model can be benefited from by selling after the breakout of this bottom.

Triple Bottom:

It is a reflective model that comes at the end of the downward trend. It consists of three bottoms in one horizontal plane or nearby planes separated by two clear peaks. This model can be benefited from by buying after the breakout of the level of the peaks.

Triple Top:

It is a reflective model that comes at the end of the upward trend. It consists of three peaks in one horizontal plane or nearby planes separated by two clear bottoms. This model can be benefited from by selling after the breakout of the level of the bottoms.

Symmetrical Triangle:

It is a continuing pattern that looks like a triangle in its composition. It consists of two trends: the first matches between two or more downward peaks, and the second matches between two or more upward bottoms. This model can be benefited from by selling after the breakout of one of the previous trends to constitute the model.

Wedge:

It is a model that may come either as continuation or reversal. It is drawn by two lines that match between nearby tops and bottoms t moving in the same direction, which is similar to the composition of the triangle but it is diagonal upward or downward.

Technical Indicators:

They are indicators which are calculated by mathematical equations relying mainly on price movement. They are used in monitoring price movements and attempting to predict future movement accordingly.

Moving Average:

It is a measurement tool of the price average movement in a certain period of time. It is used to determine the trending and to work as moving support and moving levels.

SMA:

The Simple Moving Average consists of the price average in a specific time period. It can be calculated on the basis of the opening price (Open) or closing (Close) or the maximum limit (High) or the minimum limit (Low).

EMA:

It is a kind of moving averages. It looks like SMA, but it gives greater relative weight to the recent price data.

Overbought:

It is a phenomenon that occurs on the frequency indicators. It indicates that prices have jumped too much that the cursor reaches the maximum limit and that it is likely for price to start falling.

Liquidity:

It is the ability to convert a given asset to money without causing drastic change in the asset's price.

Oversold:

It is a phenomenon that occurs on the frequency indicators. It indicates that prices have fallen too much that the cursor reaches the minimum limit and that it is likely for price to start moving upward.

Major currencies:

They are the currencies with the highest trading volumes in the foreign exchange market. They are represented by the US dollar, the pound sterling, the euro, the Japanese yen and the Swiss franc.

Supply:

It is the total available quantity of commodities or services for buying at a certain period of time. Supply and demand constitute the main factors affecting the price.

Demand:

It is the willingness of buyers to acquire a particular good or service at a certain price at a certain time. Supply and demand constitute the main factors affecting the price.

Market Orders:

They are Buy and Sell orders that are executed immediately by the broker and at the best possible price as soon as the investor demands carrying out the deal.

Buy Stop Order:

It is a pending Buy order put to carry out the buying process after the market jumps to a predetermined level.

Sell Stop Order:

It is a pending Sell order put to carry out the buying process after the market falls to a predetermined level.

Buy limit order:

It is a pending Buy order put to carry out the buying process after the market falls to a predetermined level.

Divergence:

It is difference between the movements of the price and the indicator. It has two types: positive and negative. The positive one occurs when the indicator moves upward while the price falls, and the negative one happens when the indicator moves downward while the price jumps.

Sell limit:

It is a pending Buy order put to carry out the buying process after the market falls to a predetermined level.

First IN First Out –FIFO:

It means that the deals which are first opened should be closed before the recent deals on the same pair.

One Cancels The Other:

It is an order that divides into two suborders, one of which is cancelled once the other is activated. It is used to take profit and Stop-Loss orders so as to cancel the Stop-Loss order in case that Take Profit order is activated and vice versa.

Reflection:

It is the change in price movement from jumping to falling and vice versa.

Correction:

It is a term used to describe the movement negatively correlates with the main trend for a period of time without reversing the trend. This is because the price remove in the previous trend after the correction is finished.

Fibonacci Extension:

They are levels based on Fibonacci ratios. They are used to determine the support and resistance levels after the price finishes correction and completes its previous trend. The ratios used are: 161.8%, 261.8%, 423.6%.

Hammer:

It is a reflective candle model. It consists of a single candle whose lower shadow equals twice or more as much as the size of the candle. It, also, has a tiny or non-existent upper shadow that comes at the end of the downward trend to indicate its reversibility.

Inverted Hammer:

It is a reflective candle model. It consists of a single candle whose upper shadow equals twice or more as much as the size of the candle. It, also, has a tiny or non-existent lower shadow that comes at the end of the downward trend to indicate its reversibility.

Bearish Engulfing:

It is a reflective candle model. It consists of two candles: one is going upward and the other is going downward. The latter closes more than the former opens, so the model comes at the end of the upward trend to indicate its reversibility.

Bullish Engulfing:

It is a reflective candle model. It consists of two candles: one is going downward and the other is going upward. The latter closes more than the former opens, so the model comes at the end of the downward trend to indicate its reversibility.

Impulse Wave:

This term is used in the Elliot Wave Theory and it describes the directional price movement. The driving waves are the first, the third and the fifth, each of which contains five driving waves.

Sideways –Range:

It is the price movement horizontally not vertically, so the price has tops and bottoms in a horizontal nearby plane, and it happens when supply equals demand in the market.