Forex Trading Glossary

A

ACCOUNT

Is a real, demo or IB account a trader opened with the broker. Not to be confused with client's Personal Area on the web site.

ACCOUNT MONITORING

Is a tool used to share, view, analyse and compare trading performance of one or several trading accounts. With account monitoring you can learn from other traders, find an asset manager or advertise your trading strategy.

ACTIVE CLIENT

Is an IB-related term: client account which has a cumulative personal funds of 100 or more USD in all his/her trading accounts and has at least 5 valid orders closed within the last 30 days from the current date. Number of active clients defines IB rank and the commission paid per one lot.

ARBITRAGE

Is the trade when purchase and sell of the asset happen simultaneously in order to take an advantage of a price difference between two or more markets. It is a practice that profits by taking advantage over price differences of the same or similar financial instruments, on different market. Arbitrage trading strategy is strictly prohibited by OctaFX customer agreement. In case a client uses arbitrage, the company reserves a right to cancel such orders.

ASIAN SESSION

Is one of the three major trading sessions that opens at 00.00 EET (01.00 EEST) and ends at 10.00 EET (11.00 EEST) when market is operating through financial centers in Japan, China, Australia, New Zealand, and Russia. The most traded currency during Asian Session is Japanese yen.

ASK PRICE

Is the price at which an asset can be bought, also known as the offer price. A buy order is opened by the ask price, while a sell order is closed by it. It represents how much you will get in the quote currency for selling one unit of base currency. For example: when the bid/ask for EUR/USD currency pair are listed as 1.08892/1.08897, 1 Euro costs $1.08897.

ASSET ALLOCATION

Is an investment strategy that implies a distribution of instrument funds among markets in order to achieve diversification or maximization of return.

ASX SPI 200 INDEX (AUS200)

Market index of Australian stocks listed on Australian Securities exchange

AUSSIE

Is an unofficial term for Australian Dollar or AUD/USD pair.

AUTOCHARTIST

Is a leading provider of technical analysis based price predictions which offers a powerful tool scanning the market for trading opportunities 24/5.

AUTOTRADING

Is a trading strategy based on a system or a program (for example, an Expert Advisor) where buy or sell orders are placed automatically under specific market conditions. These conditions can be various and are usually based on price movements and technical indicators. Autotrading often allows to enter and exit positions at much higher rate than manual trading. Expert Advisors are created in MetaEditor in MQL 4 programming language and are used in Metatradrer trading platform.

AAAVE

Aave is one of the leading digital assets by market cap, while USD is the most popular fiat currency. The Aave platform enables people to loan and borrow digital assets. Its digital currency uses the abbreviation AAVE.

ALGORAND

Algorand is one of the leading digital assets by market cap, while USD is the most popular fiat currency. The Algorand platform supports a wide range of decentralised applications. Its digital currency uses the abbreviation ALGO.

AVALANCHE

As a rival to Ethereum, Avalanche digital asset boasts quicker transaction output through a unique framework. Its digital currency uses the abbreviation AVAX.

AXIE INFINITY

Axie Infinity is a blockchain game where users can trade NFTs and battle while using Ethereum based currencies. Its digital currency uses the abbreviation AXS.

B

BACK-TESTING

Is the process of testing an Expert Adviser or a cBot over historical prices to determine how would it perform in the market conditions. To test an EA, launch MT4, click View>Tester or press F2 on your keyboard to open “Tester” window. Select the EA you would like to test, symbol, periodicity and mode. Click “Start” button to begin testing. To backtest a cBot you would need cAlgo. Find the robot in “cBots” tab click “+” button to add an instrument and set the variable parameters. Then Open Backtesting tab and click “Play’ button.

BALANCE

Is the amount of funds on a trading account that includes all closed positions, deposits and withdrawals. It does not include floating profit/loss, however the margin required to support open positions is a part of the balance. When a client has no open positions, balance denotes client’s personal funds.

BANK RATE

Is the rate at which a central bank lends money to its domestic banking system.

BAR CHART

Is a type of OHCL chart on which the top of the bar indicates the highest price over and the bottom represents the low price over the period of time. Opening price is shown on the left side of the bar and closing price is shown on the left.

BASE CURRENCY

Is the first currency in a forex quote, for example in EUR/USD currency pair a base currency is EUR. Base currency is always equal to 1 unit, and the price indicates how much of the second (quote) currency is required to buy or sell it. When for EUR/USD currency pair Bid price is listed as 1.13644, it means that 1 EUR is equal to 1.13644 USD.

BEAR

Is a trader who assumes that the asset price will decline in future and attempts to profit by opening short positions. The opposite of Bull.

BEAR MARKET

Is a period of time, during which the asset price consistently falls. It usually occurs when the economy is in recession or when the inflation is high.

BEARISH CANDLESTICK

Is a candlestick indicating that the currency pair closed lower than it opened at.

BID PRICE

Is the price an asset can be sold at. Sell orders are opened by the bid price and buy orders are closed by it. Bid price represents how much of the quote currency is needed for get one unit of the base currency. Example: when the bid/ask prices for EUR/USD currency pair are listed as 1.08892/1.08897, selling 1 Euro will bring $1.08897 to the seller.

BITCOIN

A digital currency used to make transactions via decentralised blockchain technology. Transactions are supported by ‘miners’ whose computers process transactions and who are rewarded for that in Bitcoins.

BOC

Bank of Canada

BOE

Bank of England

BOJ

Bank of Japan

BONUS

Is the extra amount of funds given by the broker to a client as a promotion, often under certain conditions.

BREAKDOWN

Is a price movement through an identified level of support. Breakdown is normally followed by sharp declines and heavy volume.

BREAKOUT

Is a situation where the price moves through an identified level of support or resistance. It is often followed by increased volatility and heavy volume.

BROKER

Brokers are individuals or firms that act as intermediaries between buyers and sellers. In foreign exchange, brokerage providers individual traders access to a trading platform that allows them to buy and sell currency pairs. Brokers can be compensated through commission or spread. Depending on the execution model applied, brokers can be divided into ECNs, Market Makers, Dealing Desk and Non-dealing Desk.

BRONZE

Is the user status that becomes available when the user's overall balance exceeds 5 USD. This status allows its holders to enjoy 24/7 Customer Support and commission-free deposits and withdrawals. Once achieved, this status cannot be downgraded.

BULL

Is a trader who expects the price to rise and attempts to profit from this upward movement by opening long positions. Bull is considered to be the opposite of Bear.

BULL MARKET

Is a period of time when the market that is on the rise, that is, the price of the asset is growing continuously and is expected to increase further. Economy during such period is usually strong and the level of employment is high.

BULLISH CANDLESTICK

Is a type of candlestick indicating that the currency pair closed higher than it opened.

BINANCE COIN

Binance is one of the most prominent digital currency exchanges globally based on daily trading volume. Binance Coin is an integral part of the successful functioning of many of the Binance sub-projects. Its currency uses the abbreviation BNB.

C

CABLE

is unofficial term used for referring to Great British pound and the GBP/USD currency pair.

CAC 40 INDEX (FRA40)

The most widely used indicator of Paris Market, covering the performance of 40 largest equities listed in France

CANDLESTICK CHART

Is a type of chart that displays high, low, open and close prices for a period of time. The wide part of the candlestick shows whether the closing price was higher or lower than the open price. The former is referred as to Bullish candlestick and the later is called Bearish candlestick.

CBOT

Is the software written in C# programming language designed to automatically execute orders in cTrader when specific market conditions are met. It is created in cAlgo - a code editor provided by Spotware systems.

CENTRAL BANK

Is a bank, which is responsible for managing a country's monetary system. Central bank is involved into the process of currency stabilization, maintaining low inflation and keeping full employment. It also issues currency, acts as the bank of the government, regulates the credit system, as well as controls commercial banks.

CFD

A contract for difference (CFD) is a derivative financial instrument which enables trading in an asset without actually owning the underlying asset. The price of the CFD reflects the price of the underlying asset. The CFD is essentially a contract between a trader and a spread-betting company. When a trade is closed, the two parties exchange the difference in the asset's price from when the trade was initiated.

CHART

Is a graphical representation of prices over a set period of time used for technical analysis. MT4 and MT5 have 4 types of chart available: line chart, bar chart, tick chart and candlestick chart.

CHART PATTERN

Is a distinct formation on a chart that creates a trading signal or indicates the further price movement.

CLOSED POSITION

Is a transaction that leaves the trade with a zero net commitment to the market with respect to a trading instrument.

CLOSING ORDER

is an opposite transaction to opening a position. A trader closes a short position by buying the same instrument, or closes a long position by selling it.

COMMISSION

A commission is a service fee charged by the broker from the client. It can be applied to deposit or withdrawal of funds, opening or closing a position, keeping a position overnight. OctaFX does not charge any fee for deposit or withdrawal. Our trading commission is already included in the spread as a markup on OctaFX MT4 and OctaFX MT5 accounts.

COMMODITIES

Are goods that are traded over an exchange, including hard commodities (gold, silver, platinum, crude oil) and soft commodities (wheat, corn, coffee, sugar).

COPIER

Is a client who copies the trades of other traders (Masters) via OctaFX Copytrading.

COPYTRADING

Is an OctaFX service that allows traders (Copiers) to copy trades from other traders (Masters).

COUNTERPARTY

Is the other organization or party with whom the exchange deal is being transacted. In other words, every buyer must be paired with a seller in order to perform a transaction.

CPI (CONSUMER PRICE INDEX)

Is the statistical measurement of average consumer goods and services prices used to identify periods of inflation and deflation. Large rises in CPI during a short period of time typically denote inflation, while large drops over a short period of time mark periods of deflation.

CROSS RATES

Are the rates between two currencies that are based on the price of each of them against a third currency.

CRYPTOCURRENCY

A new digital currency based on blockchain technology, which provides secure, decentralised and anonymous transactions between clients.

CTRADER

Is a trading platform designed by Spotware Systems specifically for ECN brokers. cTrader allows reverse, double or close all positions in one click and has Level II quotes available.

CURRENCY PAIR

Is the quotation of one currency in terms of the other, for example EUR/USD, NZD/CAD. The first currency is called a base currency and the second currency in the pair is known as a quote currency. When you open a Buy order, you buy the base currency and sell the quote currency. It is opposite for a Sell order - you sell the base currency and buy the quote one.

CUSTOMER SERVICE

Is a department dedicated to respond clients’ inquiries, consult on the company services, handle and resolve issues. It can be provided through various means, including email, live chat, phone and social media.

CARDANO

Agricultural companies utilise the Cardano platform to streamline research and analysis and store information securely. Its digital currency uses the abbreviation ADA.

CHAINLINK

Chainlink is a solution used by different blockchains to gather specific information. Its digital currency uses the abbreviation LINK.

COSMOS

Cosmos has built an environment that simplifies decentralised apps and helps improve communication through networks. Its digital currency uses the abbreviation ATOM.

CALGO

Is a coding application that allows a programmer to create, build, optimize and backtest cBots and custom indicators in C# programming language.

D

DAX INDEX (GER40)

German stock index consisting of the 40 major German companies traded on the Frankfurt Stock Exchange

DAY TRADING

Is the practice of buying and selling a trading instrument within one day in order to profit from relatively small movements in price. Also referred as to intraday trading.

DEALING DESK

Is a broker that acts as a counterparty to its clients’ orders which may create a conflict of interest. Orders placed with a dealing desk broker are internalized instead of being offset with the liquidity providers. Moreover, a Dealing Desk sets bid and ask price, therefore its quotes often do not reflect the market situation accurately. Also referred as to market marker.

DEMO ACCOUNT

Demo account is a trading account that allows a trader to become familiar with a trading platform without making a deposit. Funds are simulated in demo account, therefore you can check our execution, available trading tools and other features or test your trading strategy risk free. OctaFX demo account provides the same conditions as real account. Open the free forex demo account here.

DEPOSIT

A transaction involving a transfer of funds to one’s trading account. Deposited funds are credited to account balance and used to open orders.

DEPOSIT BONUS

A promotion intended to increase trading volume and overall revenue of the client. Bonus funds support account margin and can be withdrawn after completing bonus amount/2 standard lots.

DERIVATIVE

A contract between two or more parties used for speculating purposes. Its price is derived from or depends on the underlying asset (for example, a share or a commodity). Derivatives may be exchange based (e.g. futures and options) or OTC (e.g. CFDs). The former are traded through an organised exchange while the later are traded between two parties.

DIRECT QUOTATION (QUOTE)

A foreign exchange rate quoted in fixed units of foreign currency against variable amounts of the domestic currency.

DOVE

An economic policy advisor that promotes maintenance of low interest rates assuming that inflation will have little to no impact on society. The statement such advisors make are referred as to “dovish”. The antonym for Hawk.

DOW JONES 30 INDEX (US30)

A price weighted stock market index of 30 most significant companies (Microsoft, Disney, Exxon, General Electric, etc) traded on the NYSE; often considered to be the most watched index in the world. Get US30 live charts and quotes.

DRAWDOWN

Is a volume expressed as a percentage below which the equity of your investment as a Copier with a single Master can’t fall below in order to control your loss risk (available in OctaFX Copytrading). It can equal any percentage from 1% to 100%. For example, when it is set to 20%, new trades won’t be copied if your current equity falls below 80% of your current balance. The drawdown percentage is calculated as follows: Equity (Copier) < (100% – Deposit Percentage) × Balance (Copier).

DASH

The decentralised Dash platform is open to the public focusing on affordable payments with digital assets. Its digital currency uses the abbreviation DASH.

DECENTRALAND

The Decentraland platform utilises the Ethereum blockchain to power its virtual reality platform. Its digital currency uses the abbreviation MANA.

DOGECOIN

The Dogecoin digital currency is based on the "Doge" meme. The project is run by a not-for-profit organisation called the Dogecoin Foundation. Its digital currency uses the abbreviation DOGE.

E

EASING

Is a moderate decline in price.

ECN

Stands for Electronic Communication Network; an automated system that matches and executes buy and sell orders by offsetting them with the liquidity providers without dealer intervention. It aggregates prices from multiple liquidity providers and streams the best bid and ask to the trading platform. (To read more about ECN trading model click here.)

ECN BROKER

A brokerage which provides its clients direct access to other participants in the foreign exchange market using electronic communication networks (ECNs). Since an ECN broker receives quotes from several liquidity providers, it is usually able to offer tight spreads. ECN broker does not trade against its clients but rather serves as an intermediary between them and the real market.

ECONOMIC CALENDAR

A calendar used to keep track of market moving events, such as interest rate decisions, non-farm payroll numbers, and changes in gross domestic product (GDP), Consumer Price Index (CPI) and Purchasing Managers' Index (PMI). Scheduled data releases are usually graded by the impact they have on the markets.

ECONOMIC INDICATOR

A government-issued statistic that indicates current economic growth and stability. Common indicators include employment rates, Gross Domestic Product (GDP), inflation, retail sales, etc.

EDI

Electronic Data Interchange.

EFT

Electronic Fund Transfer.

EQUITY

Is the amount of funds on an account that includes balance and floating profit/loss. When there are no open positions on the account, equity is equal to balance. In case of claiming a 50% deposit bonus, until the volume requirements are met, deposit bonus funds are a part of account equity as well.

ETHEREUM

A digital currency created in 2015. It uses a blockchain for transactions based on a smart contracts system. It works using an ‘if:then’ algorithm. The contract is executed only if the condition is met. Ethereum is used for ICO (initial coin offering), which is a means of crowdfunding for new startups.

EUROPEAN SESSION

Is the trading session that operates through financial centers in Paris, Frankfurt, Zurich, and London. The most active currencies in this session are the GBP, EUR, and CHF. European session opens at 9.00 EET (10.00 EEST) and closes at 18.00 EET (19.00 EEST).

EUROSTOXX 50 INDEX (EUSTX50)

Index representing 50 largest and most liquid stocks from 12 Eurozone countries. Get EUSTX50 live charts and quotes.

EXECUTION

Is the way the broker fills client’s order. An order is deemed to be executed as soon as it is accepted by the broker and filled. Depending on its type, a brokerage can apply market execution or instant execution. With instant execution a broker undertakes to fill the order at the price requested by the client. If the requested price is not available anymore, the broker will return request with a requote. Brokers that operate under market execution offset all clients’ order with the liquidity providers to be executed at their end. Orders are always executed at the best available price at the market.

EXOTIC CURRENCY

Is a currency which is not broadly traded.

EXPERT ADVISOR (EA)

Is an algorithmic trading system written for MetaTrader trading platform that executes orders under the market conditions it was set up to observe. Expert Advisors’ developers use MQL programming language and MetaEditor coding application.

F

FALLING WEDGE

Is a bullish chart pattern formed by two descending trend lines indicating whether upward trend is about to reverse or to continue.

FAST MARKET

Is a financial market that is typified by high levels of volatility and heavy trading.

FCA (FSA)

abbreviation for Financial Conduct Authority; is a regulatory body based in the United Kingdom that regulates financial firms providing services to consumers and maintains the integrity of the UK’s financial markets.

FED

The United States Federal Reserve. Federal Deposit Insurance Corporation.

FIBONACCI

Is an indicator based on so called Fibonacci numbers, that is a sequence of numbers where each number is the sum of two preceding numbers. Interpretation of the Fibonacci numbers allows to a trader to identify key levels of support and resistance.

FLOATING SPREAD

Is the difference between Ask and Bid prices that may vary depending on the market situation. It accurately reflects the prices of trading instruments and how quickly they are changing. Floating spread may have range that is lower than typical when the market is quiet and liquidity is high.

FOMC

Federal Open Market Committee that determines money supply targets in the U.S.

FOREX CALCULATOR

Is a tool designed to calculate required margin, pip price, long and short swap for a specific position.

FOREX MARKET

It is the largest and most liquid market in the world, participants of which buy, sell and speculate on currencies. Among these participants are banks, commercial companies, central banks, hedge funds and retail forex brokers. FX market is open 24 hours a day and 5 days a week. It has no central marketplace and involves a global network of computers and brokers with major financial centers in London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.

FOREX TRADING STRATEGY

Is a set of analytical tools based on news events or technical analysis of charts. Strategies can be manual, which involves a trader tracking and interpreting the signals, and automated, which involves the use of software designed to track and interpret the signals. Both manual and automated trading strategies are available for purchase or can be developed by the traders themselves.

FREE MARGIN

Free Margin denotes the funds in the Client’s account, which may be used to open a position and are available for withdrawal. Free Margin is calculated as follows: Free Margin = Equity - Required Margin.Deposit bonus is a part of free margin until the volume requirements are met.

FTSE 100 INDEX (UK100)

The Financial Times stock exchange index; a share index of 100 largest companies listed on London Stock Exchange

FTX TOKEN

The FTX Token platform offers clients the ability to trade derivatives with digital assets. Its digital currency uses the abbreviation FTT.

FUNDAMENTAL ANALYSIS

Is a method of analysis based on examining current economic conditions, government policy and societal factors within a business cycle framework in an attempt to predict future market conditions.

FUTURE CONTRACT (ALSO REFERRED TO AS FUTURES)

Is an agreement to buy or sell particular currency or option at a specified price and time in the future. Some Forex brokers offer futures among other trading instruments.

FX

Is an acronym for Forex, which is an abbreviation for Foreign Exchange Market.

FANTOM

Fantom is an open-sourced platform for smart contracts utilising digital assets. Its digital currency uses the abbreviation FTM.

FILECOIN

The Filecoin platform is a public project with an all-in-one digital currency, storage, and blockchain data recovery. Its digital currency uses the abbreviation FIL.

G

GDP

Is an abbreviation for Gross Domestic Product; the value of all goods and services produced in a country within a specific period of time that indicates the economic health of a country.

GOLD

Is the user status that becomes available when the user's overall balance exceeds 2,500 USD. This status allows its holders to enjoy all the benefits of Bronze and Silver, as well as the ability to make faster withdrawals and deposits, trade with lowers spreads on the Forex extended currencies, complete deposit bonuses under better terms (the number of the lots to trade equals the bonus amount divided by 2.5), and accumulate more prize lots (1.5 prize lots for 1 lot traded). Gold status holders can be downgraded to Silver if their balance goes below 2,000 USD.

GRID TRADING

Is a trading technique employed during normal price volatility in currency markets by placing sell and buy orders at specified regular intervals below and above a predetermined base price.

GTC (GOOD-TILL-CANCELLED)

Is a type of pending order with no period of validity which remains active until cancelled or executed.

GUPPY

The nickname for the GBP/JPY forex pair

H

HAWK (ISH)

Is a policymaker or an advisor that favors high interest rates in order to keep inflation in check; Such policy or statement made by this advisor are called hawkish; hawk is opposite of dove.

HEAD AND SHOULDERS

Is a chart pattern indicating that the current trend is about to reverse.

HEDGE

Is a transaction opened to protect an existing or anticipated order from an unwanted price movement.

HEDGING

Is a trading strategy used to minimize the risk in forex trading. A forex hedge is opening a trade in opposite direction to protect the existing one from an unfavourable move.

I

IB

is a person or a company that refers client to a broker and receives commission for their trading.

IB COMMISSION

Is the revenue an IB receives per lot traded by his or her referral.

IB RANK

Is a certain IB status, that determines the commission per lot traded. It depends on the number of active clients an IB has.

IBEX 35 INDEX (ESP35)

Index of Spanish Continuous Market comprising of the 35 most liquid stocks

INDEX

Value of a particular market or a part of it calculated from the prices of selected stocks. The selection may be based on an industry, country or the exchange they are traded on. As it is a statistical measure, it cannot be traded directly; therefore trading is performed through derivatives.

INDIRECT QUOTE

Is a foreign exchange rate quoted as the foreign currency per 1 unit of domestic currency.

INTERBANK MARKET

Is a decentralized market where banks and other financial institutions conduct transactions. For individual traders, this is the source of price quotes and is where forex brokers offset their positions.

INTERNAL TRANSFER

Funds transfer from one trading account to another within one personal area

INTRADAY TRADE

Is an order opened and closed during the same business day. Also known as day trading.

IOTA

The IOTA platform is a network of nodes that verifies transactions quickly. Its digital currency uses the abbreviation MIOTA.

ISLAMIC ACCOUNT (SWAP FREE)

Is an account specifically designed for traders of Islamic Faith that has no swap applied during a rollover but a fixed fee instead. The fixed fee is not an interest. It primarily depends on whether the order is buy or sell.

INTERNET COMPUTER

The Internet Computer platform hosts a wide array of blockchain-based digital ledgers, decentralised finance, games including virtual reality, and more. Its digital currency uses the abbreviation ICP.

J

JAPANESE CANDLES

Is a type OHLC chart visualized in the form of rectangular shaped "body" with a vertical line on both the top and bottom (the "wicks"). Each candle represents a specific time period and shows whether the closing price was higher or lower than opening price.

K

KIWI

Unofficial name used to refer to New Zealand Dollar or NZD/USD currency pair.

L

LATENCY

Latency is a time interval between the moment an order is placed in the Client Terminal and the moment the trading server responds.

LEVERAGE

Leverage is a virtual credit provided by the broker to a client. Leverage affects your margin requirements, i.e. the higher the ratio is, the lower required margin will be, i.e. with leverage 1:500 your initial margin will be 500 times less than the contract size. For example, the current EUR/USD bid is 1.13501 and you would like to open 0.5 lots Sell order. If your leverage is 1:500 the margin required for such order can be calculated like this: 50 000 EUR (contract size) * 1.13501 (current Bid)/500(your leverage)= 113.50 USD. With 1:200 leverage, the required margin is 283.75 USD. Learn how to start trading and calculate leverage in our educational section here.

LIMIT ORDER

Is an order to open a position at specified price or better. Until the price is reached the order is considered to be pending and does not affect account equity or free margin. For a buy limit order open price should be below the current ask price. Sell limit order price should be above current bid.

LINE CHART

Is a chart type created by connecting the closing price for each interval with a line.

LIQUIDITY

Denotes the number of active traders and the overall volume of trading at any given time. It varies throughout a day as global financial centers open and close. In regards to the orders execution, it is important to keep in mind that liquidity behind each price is limited and may not be sufficient to fill a particular order.

LIQUIDITY PROVIDER

Is company, a bank or a financial institution that quotes both a buy and a sell price in a financial instrument or commodity.

LITECOIN

A digital cryptocurrency which provides secure and fast transactions within the blockchain. The main difference from Bitcoin (and the key benefit of a Litecoin) is its capability of processing much higher volumes in one transaction.

LIVECHAT

Livechat is a service that allows the company to communicate, or chat, in real time with clients on the web site. You can contact us via livechat now.

LONG POSITION

Is a position opened by a buy order and closed by a sell order.

LOONIE

Nickname for Canadian Dollar and USD/CAD pair

LOT

Is a measure of order’s volume. 1 standard lot (1.00) equals 100 000 units of base currency. 1000 Units of Base Currency (0.01) are often referred as to micro lot and 10 000 Units (0.1) are called Mini lot.

LOOPRING

The Loopring platform is public and designed for developers to create decentralised digital asset exchanges. Its digital currency uses the abbreviation LRC.

M

MAJORS

the most commonly traded currencies: EUR, USD, GBP, JPY, CAD, AUD, CHF, NZD. Major currency pairs comprise of US dollar another major currency from the list

MARGIN

Margin denotes the amount of funds required to deposit in the account in order to open a position and to maintain Open Positions, as determined in the Contract Specifications for each Instrument.

MARGIN CALL

Is a point at which additional funds may be required to maintain open positions should the market go against the trader.

MARGIN LEVEL

Is a relation between account's current equity and required margin calculated as equity/required margin*100%.

MARKET DEPTH

also known as Level II quotes. Is the liquidity that is available at different prices levels of a currency pair.

MARKET GAP

Is a market situation when: Current Bid price is higher than the Ask of the previous quote; Current Ask price is lower than the Bid of the previous quote. It may occur during major news releases, on the start of a new trading week and high volatility periods. Also referred as to Price gap.

MARKET MAKER

Is a type of brokerage that acts as the counterparty to the clients’ orders. It holds the other side of clients' trades and receives profit from clients losses. Also referred as to dealing desk broker.

MARKET MOVEMENTS

Is an evaluation of how much the price of an asset has changed that allows to identify how volatile the underlying asset is.

MARKET ORDER

It is an order to buy or sell a currency pair at the best available current price. It does not contain any restrictions on buy/sell price or any specific timeframe.

MARTINGALE

Is a trading strategy based on 18th century gambling system. The main principle is to double the volume each time you lose so that if you win you recover a previous loss and will also gain the first bet amount.

MASTER

Is a trader who allows others to copy his or her trades for a fee via OctaFX Copytrading.

MASTER IB

A Master IB is an IB who refers not only traders but other IBs as well, and earns a commission based on the activity of these IBs.

METAEDITOR

Is a coding application specifically designed by MetaQuotes to develop, edit and compile Expert Advisors in MQL programming language.

METATRADER4

Is a trading platform developed by MetaQuotes Software and released in 2005. The platform provides a variety of tools that allow traders to analyze price, place and manage trades, and employ automated trading techniques.

MICRO LOT

is the equivalent of 1000 units of the base currency expressed in lots (0.01).

MOBILE TRADING

Mobile trading allows traders to access trading platform from their Android devices. One can also trade using MT4 and MT5 applications for iOS and Android.

MOMENTUM

Is an indicator measuring the acceleration of price change.

MOVING AVERAGE

Is a trend-following technical indicator widely used to identify general price direction and to determine support and resistance levels.

METATRADER5

Is a new generation MetaTrader platform, that, unlike its predeccesor, offers more tools for technical and fundamental analysis

N

NASDAQ 100 INDEX (NAS100)

Index covering 100 largest and most liquid companies on NASDAQ stock exchange that includes a broad range of industries. Get NASDAQ 100 INDEX (NAS100) live charts and quotes

NEAR PROTOCOL

NEAR Protocol developed a protocol known as "Flux" that helps developers build markets.

NEGATIVE BALANCE PROTECTION

Negative Balance Protection is an automated adjustment of the account balance to zero in case it became negative after a stop out. Forex accounts are considered to be highly leveraged which may potentially increase risk to lose more than invested. However, with a Broker that offers negative balance protection traders cannot lose more than deposited. OctaFX offers Negative balance protection on all accounts. Learn more here.

NEWS TRADING

A trader implementing this strategy relies on news announcements and economic reports. A news trader tries to predict how a particular event can affect the market, whether a particular trading tools will increase or decrease in price after the news release. It is important to understand that the market tends to be highly volatile and price moves happen within extremely short period of time during major news releases. Learn more here

NFP

Is a statistic reported on the first Friday of the month by the U.S. Bureau of Labor Statistics representing the total number of paid U.S. workers of any business excluding government, private household, nonprofit organizations and farm employees. The statistic is determine the current state of the economy and predict future levels of economic activity.

NIKKEI 225 INDEX (JPN225)

Price-weighted average of 225 Japanese companies traded on Tokyo Stock Exchange. Get JPN225 live charts and quotes

NON DEALING DESK (NDD)

Is a foreign exchange trading that provides access to interbank market. Unlike a market maker, a broker using no dealing desk system automatically offsets positions with interbank. An NDD broker has multiple liquidity providers in order to get the most competitive bid and ask prices.

NORTH AMERICAN SESSION

Is the trading session that opens at 14.00 EET (15.00 EEST) and closes at 23.00 EET (00.00 EEST). It is is dominated by U.S. transactions, with contributive trades coming from Canada, Mexico, and South America.

O

OHLC CHART

Short for “Open High Low Close” chart that shows opening, high, low and closing prices. This type of chart is often used for technical analysis. Candlestick chart and Bar chart are varieties of OHCL chart.

ORDER

Is an instruction from the trader to open, close or modify a position.

OCTAFX PIN

Is a 4-digit code you use to verify the most important actions on the OctaFX site: withdrawals, internal transfers, and gift delivery. We send you OctaFX PIN in a welcome email. You can change it any time—just check OctaFX PIN on the Password Change page.

P

PENDING ORDER

A pending order is executed at a specific predefined conditions including price. Pending order can be executed only if the market price reaches the certain level defined by the trader.

PERSONAL AREA

Personal Area is the SSL protected client's area on the website where he or she can open and manage accounts, make deposits, withdrawals and internal transfers. Login to your Personal Area here.

PIP

Is a standardized unit of change in the price of a trading instrument. Initially, when only 4-digit pricing was available, it was the smallest unit of price change. With the introduction of more accurate 5-digit pricing, 1 pip is still calculated by the 4th digit (0.0001). The smallest unit is now referred as to point (0.00001). In 5-digit pricing 1 pip is equal to 10 points. Example: When the price for EUR/USD currency pair changes from 1.11634 to 1.11645, it means the price has changed in 1.1 pips or 11 points. For USD/JPY currency pair, which has 3-digit pricing, a change from 123.857 to 123.864 means that the price has grown in 0.7 pips or 7 points.

PIP PRICE

Value of each price movement in account currency, that depends on trading tool and order volume

PIP-HUNTING

A quick profit short-term trading strategy such as scalping.

PIVOT POINTS

Is a set of indicators that allows to determine potential turning points, also known as "pivots". They are calculated as the average of the high, low and close from the previous trading session: (high price + low price + close price)/3

PLATINUM

Is the user status that becomes available when the user's overall balance exceeds 10,000 USD. This status allows its holders to enjoy all the benefits of Bronze, Silver, and Gold, as well as to get experts prompts on their trading, be assigned with a personal manager, attend VIP events, complete deposit bonuses under better terms (the number of the lots to trade equals the bonus amount divided by 3), and accumulate more prize lots (2 prize lots for 1 lot traded). Platinum status holders can be downgraded to Gold if their balance goes below 8,000 USD.

PMI

Is an economic indicator denoting economic health of the manufacturing sector that is based on new orders, inventory levels, production, supplier deliveries and the employment environment. Index reading over 50 represents expansion of manufacturing sector, under 50 indicates a contraction and a reading at 50 indicates no change.

POINT

Is the smallest unit used by traders to measure price change in 5-digit pricing (0.00001). In 5-digit pricing 1 point equals 0.1 pips.

PPI

Is a set of indexes that measures monthly change in selling prices received by domestic producers.

PRACTICE ACCOUNT

also known as demo account; a type of trading account that allows to review and test platform features funded with simulated funds.

PRECISION

Is the accuracy of changes in currency pair price. Until recently Forex Brokers offered only 4-digit pricing. Nowadays 5-digit pricing is more common.

PRICE GAP

Is a situation when current Bid price is higher than the Ask price of previous quote or when the current Ask price is lower than the Bid price of the previous quote. Gaps often occur after economic data or news releases and on the start of new trading week. A price gap may be enclosed in a candle and not visible on the chart.

PRICE IMPROVEMENT

Also referred as to positive slippage; denotes execution at a more favourable rate that occurs when there is not enough liquidity behind the required price to fill the order.

PROFIT

Is the revenue gained by a trader measured in pips or in account currency.

PROFIT FACTOR

Is an index of trading skills. It is calculated from the ratio of all your profit from profitable trades to all your losses from unprofitable trades. If this ratio is above 1.6, your trading is effective. If it is below 1.6, you are taking too much risk in your strategy.

PULL BACK

Is a type of price movement denoted by the falling back of price from its peak.

POLKADOT

The Polkadot platform supports users with a foundation for a decentralised web, maintained by users to create solutions with a tiered approach. Its digital currency uses the abbreviation DOT.

POLYGON

MATIC, the tokens of Polygon, is used for payment within the Polygon environment.

Q

QUOTE CURRENCY

Quote currency is the second currency in a currency pair. For example, in EUR/USD currency pair the US dollar is the quote currency and EUR is the base currency. The following major currencies are usually shown as the quote currency: USD, GBP, EUR, JPY, CAD and CHF.

R

REAL ACCOUNT

Is an account that allows to place orders in the real market and requires a deposit to be able to do so, unlike a demo account.

REBATE

Is a return of a certain part of the commission an IB received from client's trading paid on a regular basis.

REBATE CALCULATOR

Is the tool that allows an IB to calculate the amount he or she should pay to his referral as rebate.

REGULATION

As the Forex market is decentralized, there are several governmental and independent supervisory bodies around the world that regulate the market, such as National Futures Association, the Commodity Futures Trading Commission, the Australian Securities and Investments Commission and the Financial Conduct Authority. They set rules and standards for foreign exchange brokers, IBs and signal sellers to ensure fair and ethical business behavior. OctaFX acts in full compliance with international legislation and regulation standards and guarantees funds security and negative balance protection to their clients.

REQUOTE

Is a situation when a Market Maker, unable or unwilling to fill an order at the price requested by the client, sets an execution delay and returns the request with a different quote, often less favourable for the client. Brokers that operate under market execution have no requotes and always fill the order at the best available market rate.

RESERVE CURRENCY

Is a foreign currency held by central banks to pay off international debt obligations, or to influence their domestic exchange rate.

RESISTANCE (LEVEL)

Is the price level where a trading instrument tends to find resistance as it is increasing and is more likely to to stop and reverse.

REVERSAL

Is the change in the direction of price trend.

RIPPLE

A digital currency providing quick and secure transactions. The main difference with this currency is that it is able to transfer not just itself but fiat and other cryptocurrencies as well.

RISING WEDGE

Is a bearish chart pattern formed by two ascending trend lines indicating whether downward trend is about to reverse or to continue.

RISK MANAGEMENT

A number of trading techniques employed to lessen risk exposure

ROLLOVER

In a foreign currency exchange (forex), rollover refers to moving a forex position to the next delivery date. The fee charged for this move can be advantageous to the investor, because the fee is based on the difference in interest rates between the two currencies in the underlying transaction. The fee can be charged for keeping an order overnight (swap) or from Friday to Monday, called Weekend rollover.

RSI

Is a technical indicator intended to measure the strength or weakness of the market based on the closing prices.

S

S&P 500 INDEX (SPX500)

Standard and poor'500 index; an american index based on 500 large companies listed on NYSE and NASDAQ exchanges

SAFE HAVEN

Is a globally traded currency that is expected to retain or increase its value during high volatility periods. It is characterized by long-term stability of its purchasing power and often services as reliable and stable store of value. The following currencies are often recognized as safe haven: USD, EUR, CHF, GBP.

SCALPING

Scalping is a trading strategy based on making large number of short term trades in attempt to make a small profit for each of them. It usually requires high leverage so that small price change would be equal to a respectable profit. Scalping can be automated or manual.

SECURITY OF FUNDS

Referrs to the measures taken by the company to ensure safety of the clients funds, including segregated accounts, SSL-protected personal area, account verification.

SEGREGATED ACCOUNTS

Is a type of bank accounts brokers use to keep clients funds separate from the company's sheets. The measure is indented to keep clients' funds safe and secure.

SENTIMENT

Is the prevailing attitude toward a particular security or larger financial market based on a variety of fundamental and technical factors, including price history, economic reports, seasonal factors, and national and world events.

SHORT POSITION

Is a position opened by a Sell order and closed by a Buy order.

SIGNAL

Signal is a sign for a trader to open buy or sell order. It is usually based on spreadtechnical indicators and often combined with fundamental analysis. OctaFX provides you with the best tool for analyzing the market and profit more - Autochartist trading signals. Learn how you can profit more.

SILVER

Is the user status that becomes available when the user's overall balance exceeds 1,000 USD. Silver status allows its holders to enjoy all the benefits of Bronze, as well as to get trading signals from Autochartist, claim premium gifts in Trade and Win, and accumulate more prize lots (1.25 prize lots for one lot traded). This status holders can be downgraded to Bronze if their balance goes below 800 USD.

SLIPPAGE

Is a slight open or close price movement that occurs due to lack of liquidity at the requested price or market gaps. Depending on the market conditions, the order may be filled at a more favourable rate (positive slippage) or less favorable rate (negative slippage). If a broker has a deep liquidity pool, only few orders will experience slippage. It is more common during high volatility periods, major news releases or when the market is illiquid.

SMART STOP OUT

Is the stop out algorithm applied on cTrader accounts where once the margin level falls below the stop out level all open positions are partially closed, as opposed to the algorithm where the positions are closed in their entirety.

SPIKE

Is a comparatively large upward or downward price movement over a short period of time. This non-market spike may occur due to a transaction that entered the system by mistake or a technical issue. If a client experienced a loss due to an off-market spike, OctaFX either compensates the funds lost or deletes the order.

SPREAD

Is the difference between the lowest ask price and the highest bid price, which is measured in Pips. The bid price is always lower than the ask price. Example: When EUR/USD bid is 1.13583 and ask is 1.13588, spread is equal to 0.5 pips. Currency pairs have different spreads depending mostly on their liquidity. The more liquid a currency pair is, the tighter its spread.

SSL PROTECTION

Is a security technology that establishes an encrypted link between a web server and a browser in order to keep all data passed between the web server and browsers private and integral.

STATUS

Is the user's level in OctaFX's status program that determines the set of benefits the user can enjoy. The higher the users' overall balance, the higher is their user status. Higher status holders have access to more benefits.

STOP LIMIT ORDER

Is a pending order which combines features of stop order and limit order: it becomes a buy limit or sell limit once the price reaches your stop level.

STOP ORDER

Is a pending orders that determines the price the position should be opened at. Buy stop order is entered above the current ask price and sell stop order is entered below the current bid price.

STOP-LOSS ORDER

A Stop-Loss order is intended to limit loss on a position, and is triggered when a certain price is reached. When the price reaches a level predetermined by the trader, an open trade automatically closes. Stop-Loss order allows traders to decide how much they can afford to lose.

STOP-OUT

Is a point at which open positions are closed automatically due to reduction in account margin to the level that can no longer sustain the positions.

SUPERCHARGED

Is the real contest that gives OctaFx client an opportunity to win one of the prizes by skillfully trading with his or her real account.

SUPPORT LEVEL

Is a price level which a trading instrument does not or rarely falls below.

SWAP

Is a payment for holding a position overnight. Swap can be negative or positive.

SWAP-FREE ACCOUNT

Is a type of account designed for traders of Islamic faith that has fixed fee instead of swap. The fee is not an interest and depends on the direction of the order.

SWISSIE

The nickname for Swiss Franc and USD/CHF

SOLANA

The platform is an open-source project that relies on the permissionless essence of blockchain technology to supply decentralised financing solutions. Its digital currency uses the abbreviation SOL.

T

TAKE-PROFIT ORDER

Take profit order is used to close a position when the price moves in a favorable direction. For example, in case you have a Buy order and predict that the price will reach a certain level and won’t go beyond it, you can have the order automatically closed at the set price as soon as your predefined level is reached. Note that both Stop-Loss and Take-Profit are pending orders, and they are at risk of not being filled at the predetermined price.

TECHNICAL ANALYSIS

A method of analyzing the market based on past prices, volume, charts and other tools in order to predict the future trends and price movements.

TECHNICAL INDICATOR

Is a tool used in to analyze charts and price movements.

TICK

Is the minimal upwards or downwards movement in a trading instrument price; tick value is not fixed and fluctuates depending on the market conditions.

TICK CHART

Is a type of chart based on a certain number of transactions per bar, as opposed to time based Candlestick, Bar or Line charts.

TRADE

It is instruction from a trader to a broker to to buy or sell a specified financial instrument.

TRADING INSTRUMENT

An asset one can trade with, i.e. currency pair, index or commodity; also referred as to Trading tool

TRADING PLATFORM

Is the software provided by broker that allows a trader to open, close and manage positions, observe and analyze charts. We offer two trading platforms for our customers: Metatrader 4 and cTrader.

TRADING SESSIONS

A period of time consisting of one business day in a financial market. Depending on the major operating financial centers, market hours can be divided into three trading sessions: the Asian (Tokyo) Session, the European (London) Session and the North American (New York) Session.

TRADING VOLUME

Is the size of an order measured in lots.

TRAILING STOP

Trailing Stop allows to move Stop-Loss level when the price moves in a trader’s favour. It helps to protect profit gained by enabling a trade to remain open as long as the trader continues to profit, and closes the position when the price is moving in unfavourable for the trader direction. Note that Trailing Stop is active as long as your trading platform is running, unlike Stop Loss or Take profit. However, Trailing Stop is more flexible since it allows to re-set the Stop Loss depending on the price change.

TREND

A direction of price movement which characterizes a particular market.

TRIANGLE

Is a chart pattern used to confirm current trend: descending triangle indicates that the price is going to fall while ascending triangle is believed to prove that the price is going up.

THE GRAPH

The Graph platform is like a data ledger for specific networks, indexing various bits of information. Its digital currency uses the abbreviation GRT.

U

UPTICK

It is a transaction executed at a price greater than the previous transaction.

USER STATUS

Is the user's level in OctaFX's status program that determines the set of benefits the user can enjoy. The higher the users' overall balance, the higher is their user status. Higher status holders have access to more benefits.

UNISWAP

The Uniswap platform was built to solve various liquidity issues on specific platforms. Its digital currency uses the abbreviation UNI.

V

VALID ORDER

Is an order which an IB will receive commission for. A valid order should last 180 seconds or more, have at least 30 points (3 pips) difference between open price and close price and should not be closed by means of Partial close or Multiple close by.

VIRTUAL PRIVATE SERVER (VPS)

Is a dedicated server that can be used to run Expert Advisors even if the trader exits the program. It also minimizes a chance of system downtime due to technology or/and connectivity failures.

VOLATILITY

Is the tendency of prices to fluctuate over time. The higher the volatility, the higher the risk involved.

VOLUME

Number of lots traded in a currency pair within a period of time.

VOLUME REQUIREMENT

The cumulative number of lots that should be traded in order to unlock OctaFX deposit bonus. Volume requirement equals bonus amount divided by two lots.

VOLUME-WEIGHTED AVERAGE PRICE (VWAP)

VWAP is the average and best price available. VWAP market depth shows the expected VWAP prices and a list of adjustable volumes. OctaFX provides you with the best tool for analyzing the market and profit more—Autochartist trading signals. Learn how you can profit more.

W

WALLET

Is a central financial repository for OctaFX clients. You can deposit funds to it and parcel them between your trading accounts or Masters, or use it for accumulating profit from trading accounts and Copytrading, to withdraw it all together. Also, Masters get their commission payouts sent to their Wallets.

WEB TRADING

Is a trading platform that provides access to the forex trading via internet browser. It does not require installation and can be used on almost any PC with internet access.

WEEKEND FEE

A fee applied for keeping a position open from Friday to Monday

WITHDRAWAL

A transfer of funds from one's trading account balance to his or her bank or e-currency account. To request a withdrawal click here. And to know more about deposit and withdrawal at OctaFX click here.

X

XAGUSD

A spot commodity based on the price of silver and traded against US dollar. Get XAGUSD live charts and quotes.

XAUUSD

A spot commodity based on price of gold and traded against US dollar. Get XAUUSD live charts and quotes.

XBRUSD

A spot commonidity based on Brent Crude Oil, also referred as to UK Oil; often considered a pricing benchmark for the majority of world's oil production. Get XBRUSD live charts and quotes.

XTIUSD

XTIUSD is a commoditiy based on West Texas Intermediate crude oil; it can be considered US Oil. Get XTIUSD live charts and quotes.

Y

YUPPY

A nickname for the EUR/JPY currency pair.

Z

ZIG ZAG INDICATOR

Is a trend indicator used to to confirm the direction of price movement and eliminate accidental price fluctuations. It allows to predict trend changes and determine the areas of support and resistance.

ZCASH

The decentralised Zcash platform was designed with privacy in mind by confirming transactions without disclosing sensitive data. Its digital currency uses the abbreviation ZEC.