Glossary Of Terms

On this page, you will find short descriptions and meaning on some of the most commonly used terms when trading in Forex. We hope this will help give you a better understanding and you can always refer back to this glossary for terminology that you don't understand.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

C

Cable - This is a slang that day traders use to describe the Sterling (British Pounds) / US Dollar exchange rate.

Call Rate - The overnight interest rate of the inter-bank.

Candlestick Chart - A chart that was first created by japanese rice traders and has become popular in the western countries in the last couple of years. It allows the trader to see graphically the opening and closing value of the deal during a specific peiod of time.

Carry - The expense or cost associated with kepping a Forex position over night.

Carry Trade - Refers to the buying of a currency when the interest rate is high. while selling a currency in which the interest rate is low.

Cash Market - The market for buying and selling of physical currencies and financial intruments.

Central Bank - A bank setup and managed by the national government which regulates the way financial institutions behave inside the border, as well as carrying out monetary policy.

Chartist - A person who use charts, graphs and past data to predict the price movement of a currency.

Cleared Funds - Money that is free to use after the transaction has been settled with the bank or other financial institutions.

Clearing - The process of finalizing a trade.

Closing a position - The process of buying or selling a forex trade base on the price of the position.

Collateral - An asset that is used to secure a loan or a trad in Forex.

Commission - A fee broker charge for trading on your behalf.

CPI (Consummer Price Index) - The measure of inflation based on the changing prices of specified set of goods.

Convertible Currency - A currency which can legally and freely exchange with another currency.

Counter Party - The party or bank with whom a foreign deal is conducted. The term is also used in currency and interest swaps market, to refer to a participant in a swap exchange.

Cross Rate - The currency exchange rate between 2 countries where neither includes the US dollars.

Currency - Money issued by the government and central bank used as a unit of or basis of trade within a country.

Currency Pair - The two compared currencies in forex. For example, the USD/AUD is a currency pair where USD is the base currency.