Forex Glossary

A Japanese candlestick pattern signaling a reversal. It consists of three candles. In a downtrend, a long black candle is followed by a Doji that gaps lower. A third candle, with a long white body gaps above the Doji’s high.

The lowest point a trader’s balance reaches below the Initial Deposit.

History of performed trades on a specific account on the MT4 platform.

A technical Indicator developed by Mark Chaikin.  When the close price is above the mid-point of the daily range, then a positive number is returned implying buying pressure (accumulation).  Similarly, when the close price is below the mid-point of the range, then a negative number is returned implying a selling pressure (distribution). The daily volume is multiplied by the above number to determine the weight of the price in the calculation of the indicator.

Calculation: [ (close – low) – (high – close) x volume] / (high – low)

In Elliott Wave Theory, there are waves that move in the direction of the trend of one larger degree.

 A technical Indicator developed by Perry Kaufman to account for market volatility.

Estimated change of US employed people, excluding the farming and the government sector. Released by Automatic Data Processing, Inc. about two days before the official NFP report.

A Japanese candlestick bullish reversal pattern. Also known as Three White Soldiers.  It consists of three long white candles with short or non-existent shadows. Each open is below the previous close.  Each close is above the previous close.

Advance Directional Movement Index. It’s a technical indicator designed by Welles Wilder to determine the presence of price trend. A reading above 25 indicates the presence of a trend.  Buy/Sell signals are provided by the crossing of +DI and -DI.

UAE Dirham. The currency of the United Arab Emirates. It is subdivided into 100 fils.

An Affiliate is a member of the corresponding FXTM Partners' program, who directs online traffic to FXTM and benefits from the trading of his referrals in accordance with the Hybrid Affiliate commission plan.

See AFN.

Afghani.  The currency of Afghanistan.  It is subdivided into 100 pul.

When a bank or financial body is exposed to forex contracts from a single customer.

Step by step programming instructions on how to carry out trading orders in electronic financial markets.   Discipline and emotion- free trades are the advantages of this type of trading.

Lek. The currency of Albania. It is subdivided into 100 qindarka.

A technical Indicator designed by Dr. Bill Williams. It consists of 3 moving average lines: The Alligator’s Jaw (blue line) is a 13-period Smoothed Moving Average shifted into the future, by 8 bars.  The Alligator’s Teeth (red line) is an 8-period Smoothed Moving Average shifted into the future by 5 bars.  The Alligator’s Lips (green line) is a 5-period Smoothed Moving Average shifted into the future by 3 bars.

Armenian Dram. The currency of Armenia. It is subdivided into 100 luma.

A technical analysis tool developed by Dr. Alan Andrews.  It is drawn by selecting 3 major consecutive tops and bottoms. The result is a line study of 3 parallel lines acting just like support and resistance.

Netherlands Antillean Guilder.  The currency of Curaçao and Sint Maarten (Dutch part). It is subdivided into 100 cents.

Kwanza. The currency of Angola.  It is subdivided into 100 centimos.

The simultaneous buying and selling of a financial instrument in different markets to take advantage of different pricing.

See ARS.

See AMD.

A feature of trading platforms that allow the testing of expert advisors on historical data. The results help traders and developers to assess the performance of their strategies.

See BSD.

See BHD.

See THB.

The amount of money in the account, excluding credit and the floating profit of currently open orders.

See PAB.

Convertible Mark. The currency of Bosnia and Herzegovina. It is subdivided into 100 fenings (or phenigs).

See. BDT.

Average outstanding loans provided to Japanese residents and businesses by domestic banks. Released monthly by the Bank of Japan.

A Bank of Central Banks, based in Basel Switzerland. It facilitates collaboration among its members and serves Central Banks in their pursuit for global monetary and financial stability.

The rate at which a country's central bank lends money to its domestic banks.

The major US Banks are examined under a number of conditions such as global recession and high unemployment, to assess whether they will be able to lend to households and businesses under three scenarios: severely adverse, adverse, and baseline. Released by the Federal Reserve.

The western technique for price charting, comprising of a vertical line representing the price range of a certain period. The highest point represents the high price and the lowest point on the vertical line represents the low price. A tick to the left represents the opening price whereas a tick to the right represents the closing price.

The current bar’s closing price is lower than that of the previous bar.

The current bar’s closing price is higher than that of the previous bar.

See BBD.

Unit of volume used contract sizes for Brent, Crude Oil and other petroleum products. One barrel is equal to 42 US gallons.

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

The interest rate that a Central Bank will charge for lending to commercial banks.

One percent of one percent. Usually used for changes in Interest Rates where references are less than one percent. 1bp = 0.0001.

Previous month’s approved mortgages by the members of the British Bankers’ Association. Released monthly.

Barbados Dollar. The currency of Barbados. It is subdivided into 100 cents.

Taka. The currency of Bangladesh. It is subdivided into 100 poisha.

A trader whose outlook on the market or a specific financial instrument is negative. A trader who expects prices to fall.

The close of the candlestick is lower than the open price, revealing negative sentiment.

When the prices of certain financial instruments, or markets are declining.

A short-lived breakout below a bottom triggering a sell entry. After the false breakout, prices switch direction.

The belief that the market or specific financial instrument will fall.

Certain price formations that signal the end of an uptrend and the beginning of a downtrend.

The negative outlook towards a financial instrument or market.

A technical analysis oscillator developed by Alexander Elder. It is the difference between the lowest price of a period and 13-period exponential moving average. A buy signal is triggered when the Bears Power index is below zero and rising while a trend indicator (i.e. moving average) is pointing upwards.

A subfield of finance that attempts to explain traders’/investors’ decision making in the financial markets. It combines theories of Psychology and Finance. It is in contrast to Efficient Market Hypothesis.

See BYN.

See BZD.

A Japanese candlestick pattern signaling a bullish reversal. It forms at the end of a decline or near a support area. The candle has a long white body and very small or non-existent lower shadow, that is, Shaven Bottom. It reveals the determination of the bulls to push prices higher.

A Japanese candlestick pattern signaling a bearish reversal. It forms at the top of an uptrend or near a resistance area. The candle has a long white body and very small or non-existent upper shadow, that is, Shaven Top. It reveals the determination of the bears to push prices lower.

See BMD.

Bulgarian Lev. The currency of Bulgaria. It is subdivided into 100 stotinki.

Bahraini Dinar. The currency of Bahrain. It is subdivided into 1000 fils.

The price at which a trader is prepared to sell a financial instrument.

Burundi Franc. The currency of Burundi.

See Bank of International Settlements.

A decentralized digital currency used for peer-to-peer transactions. It was introduced in 2009 by a programmer using the name Satoshi Nakamoto. The number of bitcoins in circulation will not exceed 21 million.

Bermudian Dollar. The currency of Bermuda. It is subdivided into 100 cents.

Brunei Dollar. The currency of Brunei Darussalam. It is subdivided into 100 cents (or sen).

It is the nickname used for the currency pair of GBPUSD. It is also used to refer to the British pound itself. Communication between Europe and North America was conducted through a transatlantic cable in the Atlantic Ocean.

See CVE.

Canadian Dollar. The currency of Canada. It is subdivided into 100 cents.

Monthly economic report, based on a survey of about 400 purchasing managers in China. A reading above 50 indicates expansion of the manufacturing sector and the economy in general, whereas a reading below 50 indicates contraction.

Released by Markit.

It gives a trader the right to buy a financial instrument at a specific price, before the expiration date.

It is a calculation method that yields 4 resistance and support levels. It is used in pivot point level calculations. It makes use of the High, Low and Close price of the previous day.
R4 = Close + (High – Low) * 1.1 / 2
R3 = Close + (High – Low) * 1.1 / 4
R2 = Close + (High – Low) * 1.1 / 6
R1 = Close + (High – Low) * 1.1 / 12
PP = (High + Low + Close) /3
S1 = Close - (High – Low) * 1.1 / 12
S2= Close - (High – Low) * 1.1 / 6
S3 = Close - (High – Low) * 1.1 / 4
S4 = Close - (High – Low) * 1.1 / 2

See CAD.

A price charting method that originated in Japan in the 18th century. Merchants devised a system to predict future prices based on traders’ emotions. It makes use of all available prices; open, high, low and close. It consists of a rectangle (the body) which is white if the close is higher than the open, or black if the open is higher than the close price. A vertical line runs through the body representing the high at the top and the low price at the bottom.

A monthly report that shows the percentage of a country’s resources used by manufacturers, mines and utilities. A high reading is positive for the country’s currency whereas a low reading is negative. Released by the Federal Reserve.

Money used to acquire, improve or upgrade physical assets such as buildings, infrastructure, and equipment.

The appreciation in the value of capital assets.

The result of selling a capital asset at a lower price than the purchased price.

It is a tradeable certificate or permit (financial instrument) that allows the holder to emit 1 ton of CO2.

When an investor borrows at low interest rates so they can buy assets that are likely to produce higher interest rates.

A charge for the storage of physical commodities.

The amount of money going into and out of a business.

A market where delivery takes place immediately (almost) after the trade of financial instruments.

The market interest rate on overnight loans in Australia. Released monthly (except January) by the Reserve Bank of Australia.

The method of settling financial instruments by cash rather than physical delivery.

See KYD.

A monthly survey that reflects prevailing consumer attitudes, buying intentions and economic activity for the months ahead. Released by the Conference Board Inc. in the US.

See Chicago Board Options Exchange.

See Chicago Board of Trade.

See Commodity Channel Index.

See Certificate of Deposit.

Congolese Franc. The currency of the Democratic Republic of Congo. It is subdivided into 100 centimes.

A moving average type where more weight is assigned to the middle of the period (time span). Used in cycle analysis.

A state’s financial institution that oversees the monetary policy, commercial banking system, manages state’s currency so as to be attractive for international trade, manages inflation and interest rates.

A Central Bank buys or sells its currency in the foreign exchange market in order to raise or lower the value of its currency in respect to another currency. It does so with the primary goal of establishing a more competitive international trading environment.

A low-risk savings certificate with a fixed interest rate and maturity date.

See XOF.

See XAF.

See Contract for Difference.

See XPF.

See Commodities Futures Trading Commission.

A technical analysis oscillator developed by Marc Chaikin. It’s the difference between a 3-period EMA and a 10-period EMA of the Accumulation/Distribution Indicator. It generates buy/sell signals when crossing above/below the zero line.

A technical analysis tool, similar to the concept of a trendline. At times prices fluctuate between two parallel lines, the basic trendline and the channel or return line. Channels may be used to trigger buy/sell signals and calculate price targets. Once a breakout from the channel takes place, the price is expected to move a distance equal to the width of the channel.

A Graphical representation of price using a candlestick, bar or line chart.

An MT4 chart setting that when enabled, shifts the chart from the left window border to the shift label (a grey triangle in the upper part of the window) of the chart.

A technical analyst whose primary working tool is the price chart.

Swiss Franc. The currency of Switzerland and Liechtenstein. It is subdivided into 100 Rappen.

It is a futures and options exchange. Part of the CME Group.

The world’s largest options exchange.

One of the largest options and futures exchanges in the world.

The Chicago Purchasing Managers’ Index is a monthly survey where purchasing managers (in Illinois, Indiana and Michigan) are asked to rate employment, production, new orders, prices, supplier deliveries and inventories. A reading above 50 is bullish for the US Dollar while a reading below 50 is bearish. Released monthly by ISM-Chicago Inc.

See CLP.

A sideways market.

A monthly report that measures unemployment in the United Kingdom. Released by the United Kingdom's Office of National Statistics (ONS).

Funds in an account that are available for withdrawal or investment.

It is the process of reconciling purchases and sales of various financial instruments.

Part of the MT4 Trading Platform that allows traders to receive live incoming prices, open and manage orders, perform technical analysis, write, backtest and optimize trading robots, and develop indicators and scripts.

When a position is closed, the transaction has been completed – whether the position was long or short, or whether it was profitable or incurred losses.

Otherwise known as closing price, this is the final rate that a security is traded at on a specific day, candle or timeframe.

The final price at the end of a period (i.e. timeframe).

Chilean Peso. The currency of Chile. It is subdivided into 100 centavos.

See Chicago Mercantile Exchange.

One of the largest exchanges in the world. It is comprised of four exchanges - CME, CBOT, NYMEX and COMEX.

Chinese Yuan Renminbi. The currency of the People’s Republic of China. It is divided into 10 jiao and 100 fen.

An asset offered by the borrower to the lender to secure the loan.

A graph that illustrates the intraday movements of a financial instrument.

See GMD.

See DKK.

A Japanese candlestick pattern signaling a bearish reversal. It forms at the top of an uptrend or near a resistance area.

During the course of an upward movement, a long black candlestick closes below the midpoint of the previous long white candle. The black candle opens above the previous high.

Part of the MT4 Client Terminal interface. It displays information about a selected bar/candlestick. By simply placing the arrow on the desired bar/candle, the window will display the OHLC prices, the open time and date, volume and the corresponding values of any attached indicators/oscillators.

Deutscher Aktien Index (German Stock Index) is an index of 30 large German company shares.

A trade opened and closed within one day.

Failure to fulfil debt obligations.

It is the decrease of the average price of a representative number of goods and services. It is the opposite of inflation.

A Japanese candlestick pattern signaling a bearish reversal.

It forms during an established uptrend. It consists of three white candles each closing higher than the previous one. The last candlestick is a Doji or spinning top that gaps above the previous candlestick.

See Double Exponential Moving Average.

A technical oscillator developed by Tom DeMark to determine overbought and oversold conditions for the currency pair under study. A reading above 0.7 is considered overbought and a bearish reversal may be imminent. A reading below 0.3 is considered oversold and a bullish reversal may be in the making.

Calculation:

If High(i) > High(i-1) then DeMax(i) = High(i) – High(i-1) else DeMax(i) = 0

If Low(i) < Low(i-1) then DeMin(i) = Low(i) – Low(i-1) else DeMin = 0

DeMarker(i) = SMA(DeMax, N)/(SMA(DeMax, N)+SMA(DeMin, N))

A trading account which is funded with virtual money, giving the trader a chance to explore the markets and test the trading platform they're using before investing real money in a live trading account.

See MKD.

The reduction in a currency’s value.

When real GDP declines more than 10% or a recession that lasts 2 years or more.

The number of open buy and sell orders placed for a financial instrument at varying prices.

It is mostly a continuation pattern. It constitutes a pause in the market after which a decisive breakout will resume in the direction of the prevailing trend –i.e. a downtrend. It requires 4 data points, 2 highs and 2 lows. The lower side of the triangle connecting the lows is horizontal, while the upper side connecting the highs is sloping downwards. A breakout of the triangle has minimum measuring implications - equal to the height of the pattern.

A technical analysis oscillator developed to remove trend from price action, by using a centered moving average. Detrending makes it easier to identify time cycles. High prices above the zero line, correspond to cycle crests, where lows below the zero line correspond to cycle troughs.

The exchange rate of a currency pair expressed in terms of the foreign currency for 1 unit of domestic currency. The base currency represents the domestic currency whereas the quote represents the foreign currency. For example, USDEUR = 0.90120.

+DI (plus Directional Indicator) is paired with -DI (minus Directional Indicator) to generate buy/sell signals in the context of the Average Directional Movement Index (ADX). A crossing of +DI above -DI generates a buy signal. A crossing of +DI below -DI generates a sell signal.

Trading based on the trader’s experience and intuition, to decide whether to take a trade or not, under the current market conditions.

Usually at the end of a trend, prices move in the direction of the prevailing trend where the oscillator moves in the opposite direction.

Djibouti Franc. The currency of Djibouti. It is subdivided into 100 centimes.

See Dow Jones Industrial Average.

See DJF.

Danish Krone. The currency of Denmark, Greenland and the Faroe Islands. It is subdivided onto 100 øre.

See Expert Advisor.

See European Central Bank.

See EGP.

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.

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 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.

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

A monthly survey showing orders for immediate or future delivery, placed with manufacturers. It provides an indication of future business trends. Released by the Census Bureau.

A reversal pattern. During the course of an uptrend as defined by successively higher tops and higher bottoms, the last top fails to exceed the previous top and prices fall below the last bottom. This is a failure swing to go short. On the other hand, in the course of a downtrend, as defined by successively lower tops and lower bottoms, the last bottom fails to move lower than the previous bottom and prices rise above the last top. This is a failure swing to go long.

The current price at which an asset could be sold on the open market.

See FKP.

A Japanese candlestick continuation pattern. During a downtrend, a long black body is followed by three small candlesticks, formed between the previous candle’s range - triggering a pause in the market. The resumption of the downtrend is signaled by the presence of the fifth candle which is a long black body.

See Federal Reserve.

Report submitted semiannually to Congress containing discussions of "the conduct of monetary policy and economic developments and prospects for the future”, along with testimony from the Federal Reserve Board Chair.

See FOMC.

It is the central bank of the United States. It was established in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. The Federal Reserves’ responsibilities:

• Monetary Policy
• Bank and financial institution regulation and supervision
• Financial System stability and containment of the financial markets systemic risks
• Financial services to the U.S. government, U.S. financial institutions and foreign official institutions.

See Federal Reserve.

The Fed’s publication about current economic conditions and prospects across the 12 Federal Reserve Districts: Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

Released eight times per year by the Federal Reserve.

See FOMC Statement.

It is a technical analysis tool that is drawn between two major points - top and bottom. The arcs are drawn centered on the second point intersecting the line connecting the two major points at 38.2%, 50% and 61.8%. The theory holds that prices are expected to find support and resistance at the arcs.

A technical Analysis tool used to draw a channel with diagonal Fibonacci retracements. In an uptrend, draw the channel (or return) line by connecting at least two tops. Consequently, draw the basic up trendline through the widest swing (bottom), parallel to the channel line. In a downtrend, draw the channel line by connecting at least two bottoms. Consequently, draw the basic down trendline trough the widest swing (top), parallel to the channel line. Fibonacci retracements equal to 61.8%, 100%, 161.8% and 261.8% of the channel width, are drawn as potential retracement levels. During an uptrend, prices will find support at the diagonal Fibonacci retracements, once they break out below the channel. On the other hand, in the course of a downtrend, prices will find resistance at the diagonal Fibonacci levels, once they break out above the channel.

It is a technical analysis tool that is drawn between three points on the price chart. The first point signifies the beginning of wave 1, the second point the end of wave 1 and the third wave the end of wave 2. The tool, displays three lines at 61.8%, 100% and 161.8% the length of wave 1(i.e. the distance between the first and the second point). These lengths (i.e. expansions) are drawn starting from the end of wave 2 (i.e. third point). The theory holds that at these levels, (i.e. expansions) significant changes may be expected, for example, the end wave 3.

It is a technical analysis tool that is drawn between two major points - top and bottom. In an uptrend, it is drawn from bottom to top, displaying three lines at 38.2%, 50% and 61.8% (i.e. the vertical distance from top to bottom). The lines serve as potential support levels. In a downtrend it is drawn from top to bottom, displaying three lines at 0.382, 0.50 and 0.618 (i.e. the vertical distance from bottom to top). The lines serve as potential resistance levels.

They are attributed to Leonardo Fibonacci, an Italian Mathematician. Each number in the sequence is composed by the sum of the two previous numbers. The sequence is: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233 etc.

It is a technical analysis tool attached from bottom to top in a rising market and from top to bottom in a declining market. The horizontal lines show the Fibonacci Retracement levels (ratios): 0.236, 0.382 and 0.618. The levels serve as potential support and resistance. The ratios are derived by dividing any number in the sequence by:

• the next one, 55/89=0.618
• the number two places to the right, 55/144=0.382
• the number three places to the right, 55/233= 0.236

It is a technical Analysis tool that is comprised of vertical lines spaced at Fibonacci intervals: 1, 2, 3, 5, 8, 13, 21, 34, 55, etc. The tool is placed on two points on the price chart to define the time interval unit. The theory holds that significant price changes are expected at the vertical lines, that is, time intervals.

See FJD.

The completion of an order.

When an investor has a very specific price they want to carry out a transaction at, they place a Fill or Kill order – this means that if the order is not filled at the desired price, it is terminated, or killed.

In the MT5 order window, a trader may set the order’s Fill Policy:

• Fill or Kill
• Immediate or Cancel
• Return

The price at which an order has been completed.

Applying Oscillator overbought and oversold levels in candlesticks analysis, premature patterns are ignored (i.e. filtered out) hence increasing the success probability of the candlestick patterns.

A monthly report that measures the average change in price of a basket of consumer goods and services in Eurozone, compared to the same period the previous year. A high reading implies inflation and is positive for the euro whereas a low reading is negative for the euro. Released by Eurostat.

Annualized change of the Gross Domestic Product (GDP), the economic output of a country.

It measures:

• personal consumption
• business investment
• Government spending
• net exports

It reveals whether an economy is expanding or contracting.

An economic indicator gauging economic health, based on year-to-date private and public investments Released monthly (except February) by the National Burau of Statistics (China).

Fiji Dollar. The currency of Fiji. It is subdivided into 100 cents.

Falkland Islands Pound. The currency of the Falkland Islands(Malvinas). It is subdivided into 100 pence.

A group of 20 countries represented at the highest level by heads of state/government and at the ministerial level by ministers of finance and central banks governors.

They meet to discuss global and economic issues.

The group consists of the following countries: Argentina, Australia, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, United Kingdom, United States of America, The European Union (represented by the European Council).

A technical analysis tool developed by W. D. Gann.  To draw an ascending Gann Line, attach the tool at a major bottom and drag the mouse to a higher bottom.

The resultant ascending trendline is drawn at an angle of 45 degrees.

To draw a descending Gann Line, attach the tool at a major top and drag the mouse to a lower top.

The resultant descending trendline is drawn at an angle of 45 degrees.

On the Gann Line, there are three control points. By moving the first and the last points the slope and the length of the line may change. By moving the middle point, the line may be moved without changing its slope and length.

According to Gann’s theory, prices:

• above the ascending 45 degrees line indicates a strong upwards movement. 
• below the ascending line implies a possible change in trend direction.
• below the descending 45 degrees line indicate a strong downwards movement.
• above the descending line implies a possible change in trend direction.
• on the 45 degrees line shows a market in balance i.e. one unit of price corresponds to one unit of time.

It’s a technical analysis oscillator developed by Bill Williams.  It consists of two histograms, above and below zero. The histogram above the zero line shoes the difference between the teeth (red line) and the jaw (blue line) of the Alligator. The histogram below the zero line show the difference between the lips (green line) and the teeth (red line) of the Alligator. A histogram bar is colored green when the value is greater than the previous bar’s value and in red color when the value is less than the previous bar’s value.

The Gator Oscillator  helps to understand what the  Alligator does:

1. Sleeps - Both bars are red
2. Eats – Both bars are green
3. Awakes –  After sleeping, one bar is green and one bar is red
4. Fills out – After eating, one of the bars is red

Pound Sterling. The currency of United Kingdom of Great Britain and Northern Ireland, Guernsey, Isle of Man, Jersey. It is subdivided into 100 pence.

See GYD.

See GIP.

Before the continuation patterns of flags and pennants are formed, a steep and rapid price movement -a pole, is always present. After a pause in the market that takes the form of a flag or a pennant, a breakout occurs out of the pattern in the same direction as the pole. The measuring implication is equal to the length of the pole, hence half-mast.

The Halifax House Price Index measures the change in the house prices throughout the UK. It is released monthly as an annualized change. The change is calculated as an average for the latest three months compared with the same period, a year earlier.

It is released by the Halifax Bank of Scotland.

A Japanese candlestick pattern signaling a bullish reversal. The presence of a hammer at the end of a downtrend or decline, alerts for a possible bullish reversal. Traders enter the market with short positions, pushing prices even lower in the direction of the prevailing trend, to form the lower shadow. Eventually, the downward move is proven short-lived, as bulls take over the control and manage to close the session at the upper area of the candle. This forms the real body, whose length is 2-3 times shorter than the lower shadow.

See HSI.

The presence of a Hanging Man at the end of an uptrend or upward move, alerts for a possible bearish reversal. Traders enter the market with short positions, pushing prices lower against the direction of the prevailing trend, to form a long lower shadow. Eventually, the bulls take over the control and manage to pull the session higher at the upper area of the candle. This forms a small real body, whose length is 2-3 times shorter than the lower shadow.

A Japanese candlestick pattern signaling a bearish reversal. A small candlestick body of either color follows a candlestick of a long white body. The color of the small candlestick is not important. The bullish move is running out of steam as shown by the presence of the small candle which signals uncertainty, as it is contained by the previous long body. The weakness of the market to push prices higher and the presence of the pattern at the end of an upward move, signals possible bearish implications.

A Japanese candlestick pattern signaling a bullish reversal. A small candlestick body of either color follows a candlestick of a long black body. The color of the small candlestick is not important. The bearish decline is running out of steam as shown by the presence of the small candle which signals uncertainty, as it is contained by the previous long body. The weakness of the market to push prices lower and the presence of the pattern at the end of a decline, signals possible bullish implications.

A Japanese candlestick pattern signaling a bearish reversal. Just like Harami, a small candlestick body- (Doji in this case) follows a candlestick of a long white body. The bullish move is running out of steam as shown by the presence of the Doji, which signals uncertainty as it is contained by the previous long body. The weakness of the bullish market to push prices higher and the presence of the pattern at the end of an upward move, signals possible bearish implications.

A Japanese candlestick pattern signaling a bullish reversal. Just like Harami, a small candlestick body- (Doji in this case) follows a candlestick of a long black body. The bearish decline is running out of steam as shown by the presence of the Doji, which signals uncertainty as it is contained by the previous long body. The weakness of the bearish market to push prices lower and the presence of the pattern at the end of a decline, signals possible bullish implications.

In Time Cycles, the principle of Harmonicity states that two neighboring cycles are related by a small whole number- usually the number 2. For example, if a 20-day cycle exists then the shorter cycle will be a 10-day cycle where the longer one will be a 40-day cycle.

It refers to the tone of language that policy makers use when referring to inflation. For example, a hawkish statement implies that drastic measures may be taken to raise interest rates.

A Technical Analysis price pattern signaling a bearish reversal. It consists of three tops and two bottoms. The highest top is known as the Head where the top to the left is known as the Left Shoulder and the top to the right is known as the Right Shoulder. The line connecting the two bottoms is known as the neckline. A prerequisite of any reversal is the existence of a trend, an uptrend in this case. In the course of an uptrend, as defined by consecutive higher tops and higher bottoms, the presence of a lower top warns for a potential reversal. A decisive break of the neckline signals the end of the prevailing uptrend and the beginning of a downtrend. If volume is available, then heavy volume should accompany the breakout below the neckline.

Investors use hedging to protect themselves by reducing the risk that may be caused by adverse market movements. Hedging means making two opposing investments, minimizing the losses which could be incurred by price fluctuations.

Investment funds that invest in a wide range of assets to reduce risk.

It is a price charting technique that filters out noise.

It uses modified open, high, low and close prices:

• haClose = (Open + High + Low + Close) / 4
• haOpen = (Previous haOpen + Previous haClose) /2
• haHigh = Max(High, haOpen, haClose)
• haLow = Min(Low, haOpen, haClose)

Heiken Ashi makes trend identification, retracements and reversals easier:

• Uptrend is identified as a series of white bodies.
• Strong Uptrend is defined as a series of long white bodies with and no lower shadows.
• Downtrend is identified as a series of black bodies.
• Strong Downtrend is defined as a series of long black bodies and no upper shadows.
• Weak trends are defined by the presence of smaller bodies.
• Retracement is defined by the presence of smaller bodies and the presence of upper and/or lower shadows.
• Reversal is defined by the presence of a Doji or color change.

See ISK.

A technical indicator rather than a complete system that is used to identify with “one look” at the chart, the direction of the market, entries (buy and sell) and support and resistance levels. It consists of 5 lines:

• Tenkan-sen : (Highest High + Lowest Low)/2 for the last 9 periods
• Kijun-sen     : (Highest High + Lowest Low)/2 for the last 26 periods
  • When Tenkan-sen and Kijun-sen are combined together they provide buy/sell signals
  • When Tenka-sen crosses above (from below) Kijun-sen, a buy signal is generated
  • When Tenkan-sen crosses below (from above) Kijun-sen, a sell signal is generated
  • A buy signal above the Kumo is considered a strong buy signal
  • A buy signal below the Kumo is considered a weak buy signal (take profit opportunity)
  • A buy signal in the Kumo is considered a normal buy signal
  • A sell signal below the Kumo is considered a strong sell signal
  • A sell signal above the Kumo is considered a weak sell signal (take profit opportunity)
  • A sell signal in the Kumo is considered a normal sell signal
• Senkou Span A : (Tenkan-sen + Kijun-sen)/2 plotted 26 periods ahead
• Senkou Span B : (Highest High + Lowest Low)/2 for the past 52 periods, plotted 26 periods ahead
  • When Senkou Span A and Senkou Span B are combined together they form the Kumo that acts as support and resistance
  • Prices above the Kumo find support at the Kumo
  • Prices below the Kumo find resistance at the Kumo
  • A thick Kumo implies high volatility and strong support/resistance
  • A thin Kumo implies low volatility
  • Prices above the Kumo identify an uptrend
  • Prices below the Kumo identify a downtrend
  • A very thin Kumo implies a reversal may be imminent
• Chikou Span : Current closing price plotted 26 periods behind
  • A buy signal is generated when Chikou Span crosses above the close price 26 periods back from the current price
  • A sell signal is generated when Chikou Span crosses below the close price 26 periods back from the current price
  • Uptrend is confirmed when Chikou Span crosses above the Kumo
  • Downtrend is confirmed when Chikou Span crosses below the Kumo

A Japanese candlestick pattern signaling a bearish reversal. While the market is in an uptrend or near a resistance area, the presence of a long black body signals an alert for traders. The second candle is a long black candle that opens at or near the first candles’ close. Both the second and third candles close lower than the previous candle’s close.

Rupiah. The currency of Indonesia. It is subdivided into 100 sen.

New Israeli Sheqel. The currency of Israel. It is subdivided into 100 agora.

See International Monetary Fund.

In Elliott Wave Theory, these waves move in the direction of the wave of one larger degree. For example, in a complete cycle (8 waves), impulse waves 1, 2 and 3 move in the direction of the wave of one larger degree. Also, the corrective waves a and c move in the direction of the wave of one larger degree.

A Japanese Candlestick pattern signaling bearish continuation. In the course of a downtrend a small white candle opens below the low of the prior long black body and closes just above the prior close.

A Japanese Candlestick pattern signaling bullish continuation. In the course of an uptrend a small black candle opens above the high of the prior long white body and closes just below the prior close.

See INR.

Technical tools based on inductive statistics and mathematical formulas, which use price data, volume and open interest in order to identify future price trends.

Foreign Exchange Rate quoted for 1 unit of the foreign currency. Foreign currency represents the base currency where the domestic currency corresponds to the quote currency. For example if in Europe, the exchange rate between the euro and the dollar would be USDEUR.

A sustained increase in the price of goods and services that reduces the purchasing power of money.

Indian Rupee. The currency of India. It is subdivided into 100 paise.

In bar charting, an inside day is defined as a bar with lower high and higher low compared to the previous bar. It suggests a pause in the market.

The interest rate charged on short-term loans between banks.

The cost of borrowing money, usually expressed as a percentage and calculated on an annualised basis.

A technical analysis methodology that examines the correlations between four major asset classes: stocks, bonds, commodities, and currencies. For example, Stock Market and Treasury Bonds are positively correlated. Whereas Interest Rates are negatively correlated to both markets. Commodities and Bonds usually move in opposite directions. The US Dollar and Gold are also negatively correlated.

See JMD.

This is the theory that if the stock market ends higher in January, the rest of the year will also end higher. Conversely, if January ends on a low note, stock prices will be lower for the end of the year. According to Yale Hirsch: “As January goes, so goes the rest of the year.”

A charting method that has gained a lot of popularity recently, because the charts are more visually appealing than bar charts that reflect the same information. They are also generally easier to read and interpret. The chart makes it easier to see the relationship between the open and close and the high and low of price movements. They also give a more accurate depiction of market sentiment.

There are two types of Candlestick; the first Candle has a white or hollow body which indicates that the market is moving upwards, as there is more buying than selling interest. As the Close price is higher than the Open price, the white candlestick depicts the positive sentiment in the market and the fact that bulls are in control. The longer the body is, the stronger the buying interest.

A filled (black) body which indicates that the market is moving downwards indicates that there is more selling than buying interest. As the Close price is lower than the Open price, the black candlestick depicts the negative sentiment in the market and the fact that bears are in control. The longer the body is, the stronger the selling interest.

The lines above and below the body of the candlestick are called “Shadows” or “Wicks”. The upper shadow reveals the price levels above the body that have been tested but eventually rejected. Similarly, the lower shadow reveals the price levels below the body that have been tested but eventually rejected.

Jamaican Dollar. The currency of Jamaica. It is subdivided into 100 cents.

Jordanian Dinar. The currency of Jordan. It is subdivided into 10 dirham, 100 qirsh or 1000 fulus.

Number of job openings that need to be filled within 30 days. These include full-time, part-time, permanent, short-term and seasonal openings. Released monthly by the Bureau of Labour Statistics.

See Kondratieff-Cycle.

A price charting technique independent of time.  It is plotted as a series of connected vertical lines.  The thickness and direction of the lines, reflect the price action:

• An uptrend is displayed as series of thick vertical lines
• A downtrend is displayed as series of thin vertical lines

A buy signal is generated when price moves above the most recent high whereas a sell signal is in place when it moves below the last low.

See KES.

Riel.  The currency of Cambodia.  It is subdivided into 10 kak or 100 sen.

A Japanese candlestick pattern signaling a bearish reversal. During the course of an uptrend, a long black candle gaps below the previous white Marubozu and then declines lower closing at the low of the session, demonstrating strong bearish power.

See PGK.

See LAK.

It shows the hourly costs of maintaining employees.

The percentage of population (eligible to work) that is either looking for a job or already has a job.

See LAK.

A Japanese candlestick pattern signaling bullish reversal.  During the course of a downward move, three long black candles- each opening and closing lower than the previous one, re-establishes the decline. Even though the fourth candle gaps below the previous body, it attempts to extend into the previous candle’s body, as shown by the relatively long upper shadow, but eventually retreats making a new low. It then forms a small black body. The last candle is a long white body that opens above the previous body- signaling a reversal.

A Japanese candlestick pattern signaling bearish reversal.  During the course of an upward move, three long white candles- each opening and closing higher than the previous one, re-establishes the rally. Even though the fourth candle gaps above the previous body, it attempts to extend into the previous candle’s body, as shown by the relatively long lower shadow, but eventually retreats making a new high. It then forms a small white body. The last candle is a long black body that opens below the previous body- signaling a reversal.

See LBP.

See All.

See HNL.

See LRD.

See LYD.

The Moving Average Convergence/Divergence is a momentum oscillator developed by Gerald Appel.  It is the difference between a 12 period and a 26 period Exponential Moving Average plotted usually as a histogram above (difference is positive) or below (difference is negative) the zero line. A 9 period Simple Moving Average of MACD is known as the Signal Line. 

MACD follows the general rules of oscillator analysis:

• Confirmation of the trend is in place when MACD crosses the zero line.
• Early Buy signals (or reversal warning) are triggered when MACD crosses above the Signal Line when below the zero line.
• Early Sell signals (or reversal warning) are triggered when MACD crosses below the Signal Line when above the zero line.
• Overbought/Oversold signals are triggered when the 12 period EMA pulls away from the 26 period EMA.
• MACD is unbounded and as such, there no overbought and oversold lines.
• Divergence follows the rules for positive and negative divergence.

Moroccan Dirham. The currency of Morocco. It is subdivided into 100 santimat.

See MGA.

See MWK.

See MYR.

See Depth of Market.

A technical indicator developed by Dr. Bill Williams to evaluate the efficiency of the price movement. An efficient market is defined as a market when all traders (long-term and short-term) are actively trading.  The indicator combines price and volume:

MFI = (High – Low) * Volume

There are 4 combinations:

• MFI Up and Volume Up (Green): Follow the direction of the market.  The market is accelerating as more traders enter the market in the established direction.
• MFI Down and Volume Down (Brown): Both MFI and Volume fade, resulting in no interest to advance further.
• MFI Up and Volume Down (Blue):  Price movement without volume confirmation.  It is a fake move.
• MFI Down and Volume Up (Pink): The most important signal.  The increased volume signifies the increased number of participants entering the market.  The squat as Bill Williams named it, implies a reversal or continuation of the prevailing trend.

See Market Rate.

A technical analysis tool developed by J. Peter Steilmayer to allow traders to get information about the activity in the futures pit. It displays price distribution and reveals who is in control of the market:

• Short-term traders
• Long-term traders

A technical indicator developed by Donald Dorsey.  It measures the difference between High and Low prices in order to identify reversals. Trading signals are triggered when a “reversal bulge” is identified.  That is, a reading above 27.0 and then a decline of the indicator below 26.5.

A buy signal occurs during a downtrend and a “reversal bulge” in place.

A sell signal occurs during an uptrend and a “reversal bulge” in place.

A Japanese candlestick pattern signaling a bearish reversal.  At the end of an uptrend, a long white candlestick and a smaller white candle that follows, share the same closing price. Even though the second candle opens lower than the previous close, it doesn’t manage to move lower and eventually it closes at the same price as the previous session.  This is indicative of a possible top. Since the market failed to record a new high, a resistance may have been formed and a possible reversal may be in place.

A Japanese candlestick pattern signaling a bullish reversal.  At the end of a decline, a long black candlestick and a smaller black candle that follows, share the same closing price. Even though the second candle opens higher than the previous close, it doesn’t manage to follow through and eventually it closes at the same price as the previous session.  This is indicative of a possible bottom. Since the market failed to record a new low, a support may have been formed and a possible reversal may be in place.

See MUR.

A market breadth indicator.  It was developed by Sherman and Marian McClellan.  It is the difference of a 19-period EMA and a 39-period EMA of advancing minus declining issues in the New York Stock Exchange.

A reading above 100 implies extreme overbought conditions whereas a reading below -100 signals extreme oversold conditions.   A buy signal is triggered when the oscillator falls in the area between -70 and -100 and then turns up.  Similarly, a sell signal is generated when the oscillator rallies in the area between 70 and 100 and then turns down.

The midpoint of a period’s price activity.  It is calculated as:

(High + Low) / 2

A Japanese candlestick pattern signaling a bullish reversal.  During the course of the uptrend, the presence of a long white candlestick confirms the strength of the prevailing direction of the market. While the sentiment is clearly positive, the next session gaps even higher, creating an open window.  Eventually the session closes lower but at the same level as the previous session’s close.

A Japanese candlestick pattern signaling a bullish reversal.  During the course of the downtrend, the presence of a long black candlestick confirms the strength of the prevailing direction of the market. While the sentiment is clearly negative, the next session gaps even lower, creating an open window.  Eventually the session closes much higher but at the same level as the previous session’s close.

See MXN.

See NGN.

See NAD.

See NFA.

See NPR.

See ANG.

See NYSE.

See NZD.

*Designated by the CFTC as a registered futures association, NFA strives every day to safeguard the integrity of the derivatives markets, protect investors and ensure Members meet their regulatory responsibilities.

High impact, monthly report presenting the change of US employed people, excluding the farming and the government sector. Released, usually, the first Friday of the month by the Bureau of Labor Statistics.

See BTN.

See On Balance Volume.

It is a Volume Indicator developed by Joseph Granville.  Each day’s volume is assigned a plus or a minus sign, depending on whether the current day’s closing price is higher or lower than the previous day’s closing price.  The result is added to a running cumulative total.

If Closing Price _current > Closing Price _previous then add Volume

If Closing Price _current < Closing Price _previous then subtract Volume

If Closing Price _current = Closing Price _previous then no change

The On Balance Volume should be in the same direction as the prevailing trend.  Divergence is a signal that the prevailing trend is weakening and an impending reversal may be imminent.

In the course of a downtrend, a small white candle opens below the low of the prior long black body and closes at the aforesaid low.

In the course of an uptrend, a small black candle opens above the high of the prior long white body and closes at the aforesaid high.

Organization of Petroleum Exporting Countries. OPEC’s mission is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry. The twelve-member states are: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

The total number of outstanding (long or short) contracts at the end of the trading day.  Open Interest applies to futures and options markets.

Buyer                       Sell                 Comment              Open Interest

New Long                New Short    New Position                   ↑

New Long                Old Short      Not new Position            − −

Old Long                  New Short    Not new Position            − −    

Old Long                  Old Short      Old Position                     ↓

A financial derivative where the buyer has the right to buy/sell an asset by the expiration date. More specifically, Call Options are contracts that give the owner the right (not the obligation) to buy an asset in the future (before or at the expiration date) at an agreed price. Investors buy Call Options when they believe that the value of the underlying asset will increase above the strike price. Similarly, Put Options are contracts that give the owner the right (not the obligation) to sell an asset in the future (before or at the expiration date) at an agreed price. Investors buy Put Options when they believe that the value of the underlying asset will decrease below the strike price.

Here are some examples of different types of Options:

• Call
• Put
• American Style
• European Style
• Exchange Treaded Options
• Over the Counter Options
• Option Type by Expiration
• Option Type by Underlying Security
• Employee Stock Option
• Cash Settled Options
• Exotic Options

Balboa. The currency of Panama. It is subdivided into 100 centésimos.

See PKR.

See XPD.

Parabolic Stop and Reverse is a technical indicator developed by Welles Wilder. It is based on the premise that a strong trend will continue to increase in strength and hence it will follow a parabolic arc. During an uptrend a SAR point starts far from the price and as the price accelerates upwards the SAR points (below the price in an uptrend and above the price during a downtrend) close the gap. When the SAR point reaches the price the long position is closed and a short is opened. It is a system that is always in the market either as long or short. The points (SAR) serve as trailing stop loss and trailing take profit. It works well during trending markets but it produces many false signals during sideways markets.

See MOP.

See TOP.

See Personal Consumption Expenditures.

Sol. The currency of Peru. It is subdivided into 100 centimos.

Orders to buy or sell a financial instrument in the future when certain conditions are met. They consist of limit orders and stop orders.

Buy Limit Order: A predefined price to buy in the future. This is lower than the current market price.

Sell Limit Order: A predefined price to sell in the future. This is higher than the current market price.

Buy Stop Order: A predefined price to buy in the future. This is higher than the current market price.

Sell Stop Order: A predefined price to sell in the future. The price is lower than the current market price.

A Continuation price pattern composed of a small symmetrical triangle, preceded by an almost straight-line move called a flagpole. The breakout of the pennant should be accompanied by heavy volume where available. The measuring implication is equal to the length of the pole. The pennant pattern causes a brief pause in the market that lasts less than 3 weeks.

A monthly report that measures the total expenditure by individuals. A high reading is seen as positive for the US Dollar. Released by the Bureau of Economic Analysis, Department of Commerce.

See Personal Consumption Expenditures.

See CUC.

See UYU.

Kina. The currency of Papua New Guinea. It is subdivided into 100 toea.

See PHP.

Philippine Peso. The currency of the Philippines. It is subdivided into 100 centimos.

During the course of a decline, a long white candlestick exceeds the midpoint of the previous long black candle. The white candle opens below the previous close or low. It is a bullish reversal pattern.

A point in price, or pip for short, is the measure of change in a currency pair in the forex market. The acronym can also stand for a “percentage in point” and “price interest point”. It is a standardized unit and is the smallest unit of measurement by which a currency quote can change. Most currency pairs are measured to five decimal places. For pairs like EURUSD, a pip corresponds to the fourth decimal digit [EURUSD 1.06712]. Yen-based currency pairs like USDJPY are the exception, and are measured to three decimal places and the pip corresponds to the second decimal digit (USDJPY 114.612).

See QAR.

Identifies investment potential by studying unquantifiable factors that affect the market movement, such as traders’ sentiment, Psychology and behavior.  Technical Analysis is a form of Qualitative Analysis, as many concepts and theories such as Elliott Wave Theory, Dow Theory and Cycle Theory study the behavior of the market participants.

See ZAR.

See Exchange Rate.

See ROC.

A market governed by legislative rules and regulations which are in place to protect investors.

See RSI.

A technical indicator based on the premise that during an uptrend, the closing price is usually higher than the open price.  Conversely, during a downtrend, the closing price is usually lower than the open price.  The calculation formula is:

RVI = (Close – Open) / (High – Low)

For further smoothing, a 10-period Simple Moving Average may be applied on the resulting RVI.  Furthermore, a 4-period Signal Line may be constructed by applying a Symmetrical Weighted Moving Average on RVI.

A potential buy signal is triggered when there is a positive divergence between the oscillator and price, especially when RVI is in extreme oversold territory.  Conversely, a potential sell signal is in place when there is a negative divergence and RVI is in extreme overbought territory.

A price level usually defined as a previous top, where selling pressure overcomes buying pressure.  As a result, prices may find it difficult to break above.

See correction.

A financial instrument or asset where the risk of it losing its value is relatively low.

See SHP.

Saudi Riyal. The currency of Saudi Arabia. It is subdivided into 100 halalas.

See SAR.

Solomon Islands Dollar. The currency of the Solomon Islands. It is subdivided into 100 cents.

A trading strategy that benefits from small price movements.

Seychelles Rupee. The currency of the Seychelles. It is subdivided into 100 cents.

Sudanese Pound. The currency of the Sudan. It is subdivided into 100 piasters.

Swedish Krona. The currency of Sweden. It is subdivided into 100 ore.

A pending order to sell at a predefined price higher than the market price in anticipation that the market will eventually decline.

A pending order to sell at a predefined price lower than the market price, in anticipation that the market will continue to decline.

A pending order that combines the Sell Stop and Sell Limit Orders. It allows a trader to specify a price lower than the current price that when reached, a Sell Limit ordered is placed at a higher price level.

Substantial sale of a financial instrument with rapidly declining prices. It is usually characterised by panic amongst traders.

The investors’ expectations about the direction of a financial instrument or market.

Japanese candlestick bearish continuation pattern. During the course of a downtrend, the appearance of a long white candlestick is common, as a correction is part of the prevailing trend. The Next candlestick is a long black body opening at the same price level as the opening of the previous white candlestick but eventually closing lower, signaling the continuation of the downtrend.

Japanese candlestick bullish continuation pattern. During the course of an uptrend, the appearance of a long black candlestick is common, as a correction is part of the prevailing trend. The next candlestick is a long white body opening at the same price level as the opening of the previous black candlestick, signaling the continuation of the uptrend.

See RSD.

The transfer of ownership of a financial instrument to a buyer.

See SCR.

Singapore Dollar. The currency of Singapore. It is subdivided into 100 cents.

The vertical line than extends above and below the body/real body of a Japanese candlestick. It defines the range between the high and the low price for the specific period.

Japanese candlestick bearish pattern. A Shooting Star formed at the end of an uptrend or at a resistance area has bearish reversal implications. Traders enter the market with long positions but eventually the sellers’ pressure overcomes buyers’ pressure and the candlestick closes at the lower area of the Shooting Star. The small body and the long upper shadow reveals the weakness of the bulls, who are unable to maintain the upward move.

The sale of a financial instrument to be bought later at a lower price.

Saint Helena Pound. The currency of Saint Helena, Ascension and Tristan da Cunha. It is subdivided into 100 pence.

Japanese candlestick bearish continuation pattern. During a downtrend, a black candlestick is followed by two white candles that gap down-their high price is lower than the black candle’s low price. The two white candles open at about the same price and have a similar body size.

Japanese candlestick bullish continuation pattern. During an uptrend, a white candlestick gaps above the previous white candle thus creating a rising window. The third white candle opens near the preceding open, creating a bullish continuation pattern.

The 9-period Simple Moving Average of the Moving Average Convergence/Divergence (MACD). It may also refer to a moving average of any other oscillator.

See XAG.

A trend following indicator. It also known as arithmetic moving average. It is calculated by adding the closing (other prices may also be used like open, high low, typical, median etc.) price of a number of candlesticks (equal to the time period of the moving average) and then dividing this number by the total number of prices. The result is known as the average. The oldest price is then dropped (i.e. discarded from the calculation) and the same formula is applied to the next prices. Therefore, it becomes the moving average.

Simple Moving Average = [Price(n) + Price(n-1) + Price(n-2) + … + Price(1)] / n

Where n is the period of the moving average.

See SGD.

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.

Leone. The currency of Sierra Leone. It is subdivided into 100 cents.

A currency that is sensitive to political and economic events and thus fluctuates greatly and is generally unstable.

See PEN.

See SBD.

See BDT.

An order placed to close a position so as to lock profits once it hits a specific price.

An order placed to close a position once it hits a specific price.

See WST.

See TZS.

The study of market action mainly through price charts for the purpose of identifying future price trends in early stages.

Technical analysis applies to all:

1. Timeframes
2. Financial Instruments

Technical Analysis has received some criticism throughout the years:

1. It is based on self-fulfilling prophecy.
2. Prices move at random hence markets are not predictable.

Technical Analysis is based on 3 premises:

1. Market action discounts everything.
2. Markets move in trends.
3. History repeats itself.

See Indicator.

See KZT.

One of the lines of Ichimoku Kinko Hyo. It is a 9-period moving average of the mid-prices; (Highest High + Lowest Low)/2 for the last 9 periods. It provides signals when combined with Kijun-sen.

A trendline that joins only two tops or bottoms.

Baht. The currency of Thailand. It is subdivided into 100 satang.

A Japanese candlestick pattern signaling a bearish reversal. It forms at the end of a rally or near a resistance area. At the top of the uptrend the presence of three consecutive long black candlesticks signifies the end of the upward move and the beginning of a new move in the opposite direction. Each Marubozu opens above the previous close and concludes below it. The lower shadows are very small if present - thus demonstrating the strength of the decline.

A Japanese candlestick pattern signaling a bearish reversal. It forms at the end of an uptrend or near a resistance area. A small candlestick body of either color follows a candlestick of a long white body. The color of the small candlestick is not important. The two candles form a Harami pattern. The bullish rally is running out of steam as shown by the presence of the small candle, which signals uncertainty as it is contained by the previous long body. The weakness of the market to move higher and the presence of the pattern at the end of a rally, signals possible bearish implications. The long black body that follows, extending below the second candle’s close, confirms the bearish reversal.

A Japanese candlestick pattern signaling a bullish reversal. It forms at the end of a downtrend or near a support area. A small candlestick body of either color follows a candlestick of a long black body. The color of the small candlestick is not important. The two candles form a Harami pattern. The bearish decline is running out of steam as shown by the presence of the small candle, which signals uncertainty as it is contained by the previous long body. The weakness of the market to move lower and the presence of the pattern at the end of a decline, signals possible bullish implications. The long white body that follows, extending above the second candle, confirms the bullish reversal.

A Japanese candlestick pattern signaling a bearish continuation. During a downtrend, three consecutive long black candlesticks (i.e. Three Black Crows) signify the strength of the downside momentum. The fourth candlestick, a long white body, opens below the third candle’s open and closes above the first candle’s close in the opposite direction.

A Japanese candlestick pattern signaling a bullish continuation. During an uptrend, three consecutive long white candlesticks (i.e. Three White Soldiers) signify the strength of the upside momentum. The fourth candlestick, a long black body, opens above the third candle’s close and closes below the first candle’s open in the opposite direction.

A Japanese candlestick pattern signaling a bearish reversal. It forms at the end of an uptrend or near a resistance area. Just like an Engulfing Pattern, a long black candlestick is formed at the end of an uptrend preceded by a small white candlestick. The body of the small white candlestick is completely engulfed by the body of the long black candlestick. The bullish pressure of the prevailing upward move, is overcome by the sellers entering the market aggressively at the top of the rise-forming a long black candlestick with bearish implications. The presence of the long black candle at the third session which closes lower than the prior close, confirms the bearish reversal.

A Japanese candlestick pattern signaling a bullish reversal. It forms at the end of a downtrend or near a support area. Just like an Engulfing Pattern, 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. The bearish pressure of the prevailing downward move, is overcome by the buyers entering the market aggressively at the end of the decline-forming a long white candlestick with bullish implications. Additionally, the presence of the long white candle at the third session which closes higher than the second candle, confirms the bullish reversal.

A Japanese candlestick pattern signaling a bullish reversal. It forms at the end of a downtrend or near a support area. While the market is in a downtrend, a long black body with a long lower shadow forms in the same direction. The second candle is a small black candle with a relatively long lower shadow as well but above the previous one. The third candle in the pattern is again a small black candlestick with very small or non-existent shadows. The body of the last candlestick is contained within the range of the previous candle.

A Japanese candlestick pattern signaling a bullish reversal. It forms at the end of a downtrend or near a support area. At the end of the downtrend or decline, the presence of three consecutive long white candlesticks signify the end of the downward move and the beginning of a new move in the opposite direction. Each Marubozu opens below the previous close and concludes above it. The upper shadows are very small if present - thus demonstrating the strength of the ascent.

During trading hours Bid/Ask prices change as new incoming prices are received. A tick represents any single incoming price quote.

There are 4 major categories:

• Long term
• Seasonal
• Primary or Intermediate
• Trading

It is applied to the breaking of trendlines, support and resistance. Sometimes a close is needed above or below the line or 2 closes or 2 days or a Friday close to name just few popular filters.

It is based on the study of the past. To forecast the future, one needs to study previous data.

To determine specific entry/exit points in the market.

Somoni. The currency of Tajikistan. It is subdivided into 100 diram.

Turkmenistan New Manat. The currency of Turkmenistan. It is subdivided into 100 tennesi.

Tunisian Dinar. The currency of Tunisia. It is subdivided into 1000 milim.

Pa’anga. The currency of Tonga. It is subdivided into 100 seniti.

During the course of an uptrend, the recording of a higher high followed by a lower close (lower than the previous close) suggests a reversal. The wide range of the day (bar or candlestick) and the accompanied heavy volume define the strength of the reversal. Also, known as buying climax.

A Japanese candlestick pattern signaling a bullish reversal. It forms at the end of a downtrend or near a support area. In the course of a decline a long black candle reaffirms the negative sentiment in the market. The following three candles are of small real bodies, displaying indecision. The last candlestick is a long white body, signaling a reversal.

In the course of a rally a long white candle reaffirms the positive sentiment in the market. The following three candles are of small real bodies, displaying indecision. The last candlestick is a long black body, signaling a reversal.

The difference between a country’s exports and imports. More exports than imports result in a trade surplus. If there are more imports than exports, it results in a trade deficit.

In Time Cycles, a trading cycle is 4 weeks long. It consists of the alpha (2 weeks) and beta (2 weeks) cycles.

See AED.

Hryvnia. The currency of Ukraine. It is subdivided into 100 kopiyky.

See UGX.

Uganda Shilling. The currency of Uganda.

The percentage of the labour force that during the last month that had no work but made specific efforts to find employment. Released monthly by the Bureau of Labor Statistics.

Japanese Candlestick bullish pattern. A long black candle forms in the direction of the downtrend. The next candle is a hammer that opened higher and tested lower prices levels but eventually rejected as shown by the long lower shadow. The third candle is a small white body formed below the hammer’s body showing signals that the market is not willing to move lower.

Japanese candlestick bullish continuation pattern. In an uptrend, two long white candles with a rising window in between are followed by a long black candle that fills the window (i.e. gap).

Japanese candlestick bearish pattern. During the course of an uptrend a long white body is followed by a shorter black body that gaps higher. A black candle that follows, opens at or above the previous open. It then pushes the market lower, well into the long white candle’s body and more specifically, below the close of the second body but above the close of the first candlestick.

See VUV.

See VPS.

See Elliott Wave Theory.

See Linearly Weighted Moving Average.

See WTI.

CFA Franc BEAC. The currency of Cameroon, The Central African Republic, Chad, The Congo, Equatorial Guinea and Gabon.

See YER.

See JPY.

See ZMW.

See ZWL.