What is the abbreviation for Foreign Exchange?
The US dollar is also known by the slang term “greenback”, which refers to the colour of US paper dollars. Traders who trade the US dollar often follow the USDx , which shows the value of the US dollar against a basket of other major currencies. S/R – If you’ve ever read an online Forex market analysis, chances are that you’ve stumbled upon the term “S/R”. This is short for “Support/Resistance”, a major concept of technical analysis. Support levels represent price-levels below the current market price at which bears could have difficulties to break below.
The following image presents one of the definitions of FOREX in English language. You can download the image file in PNG format for offline use or send image of FOREX definition to your friends by email. If by any chance you spot an inappropriate comment while navigating through our website please use this form to let us know, and we’ll take care of it shortly. TL – Another popular tool in technical analysis is the trendline, often shorted as “TL”. Trendlines connect lows during an uptrend to create a rising trendline and highs during a downtrend to create a falling trendline.
Forex (FX): How Trading in the Foreign Exchange Market Works
Making such deals a trader gets a smaller spread, more liquidity and more available information concerning the market events. Foreign exchange market is a kind of science full of particular words. Many of them are shortened on purpose because events happen so fast and there is no time to read or pronounce long sentences. Please know that five of other meanings are listed below. You can click links on the left to see detailed information of each definition, including definitions in English and your local language. The continent of Asia is one of the fastest growing economic territories in the world.
Each country in Asia uses its own currency with the exception of Timor-Leste, which uses the US dollar. Here is a list of Asian countries and the currencies they use. An exchange rate is the value of a nation’s currency in terms of the currency of another nation or economic zone. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
Similarly, resistance levels represent price-levels at which bulls may have difficulties to break above. GDP – The Gross Domestic Product, or GDP, is the broadest market indicator available for a country. This website is using a security service to protect itself from online attacks.
You’ll quickly grasp and fully understand the abbreviations. Don’t worry though if you don’t remember them all at once. Take your time and read through the following article a couple of times. You can email the site owner to let them know you were blocked.
A bullish divergence forms when the market makes a fresh low, while the indicator fails to follow and creates a low higher than the previous low. Bearish divergences form when the price makes a fresh high, while the indicator forms a lower high. RSI – Another popular technical indicator is the RSI – Relative Strength Index.
The action you just performed triggered the security solution. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. Getting online to paydollar from 125 to nearly 100 in the first six months of 1993, one wonders whether the fools have migrated to the foreign exchange market. ISO-standardized currency abbreviations are used for international currencies for quick and clear identification for payment transactions. Here, the first two letters of the currency abbreviation are used to represent the country or currency area and the third letter the currency name.
If imported French cheese suddenly costs more at the grocery, it may well mean that euros have increased in value against the U.S. dollar in forex trading. Here’s a list of the most common abbreviations and acronyms you may stumble upon while trading or reading online analyses. These range from macro-fundamentals and central banks to currencies and technical terms. James Chen, CMT is an expert trader, investment adviser, and global market strategist. CPI – The CPI report is a very important market indicator in Forex.
- TP/SL – The abbreviations TP and SL stand for Take Profit and Stop Loss, respectively.
- When oil is rising, so is the Canadian dollar, and vice-versa.
- Forex futures are derivative contracts in which a buyer and a seller agree to a transaction at a set date and price.
- Of the African currencies, the strongest is currently the Libyan dinar.
There are 180 world currencies recognized by the United Nations, which are used in 195 different countries. Keep reading to learn the abbreviations for every world currency as well as what countries use each currency. What is Relative Strength Index A spot exchange rate is the rate for a foreign exchange transaction for immediate delivery. Those financial institutions and the traders who work for them are still there, alongside the neophytes working from home.
Know what is foreign exchange? Got another good explanation for foreign exchange? Don’t keep it to yourself!
More than 120 countries gathered together to regular international trade. For convenience financial market vocabulary can be divided into 3 categories. Traders are taking a position in a specific currency, with the hope that it will gain in value relative to the other currency. It’s risky business and can be made riskier by the use of leverage to increase the size of bets.
While CPI measures the change in retail prices, PPI reflects changes in prices of intermediary goods in the manufacturing process. Whenever we trade a currency, we have to pair it with another currency which forms a currency pair. BC stands for “base currency”, i.e. the first currency in a pair. CC stands for “counter currency”, i.e. the second currency in a currency pair. If you have just started trading, then you must have started getting acquainted with the basics of trading forex and online forex trading techniques.
It represents the inflation rate in a country that most major central banks follow when adjusting their monetary policy. The CPI shows the increase in prices of goods and services over a specific period of time. Any contracts Nord FX Forex Broker Review of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate.
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ADX – The ADX indicator, or the Average Directional Movement Index, is a trend-following indicator that shows both the current trend and the strength of the trend. The indicator consists of three-line – DI+, DI- and the ADX line. If DI+ is above DI- the trend is up, and if DI- is above DI+ the trend is down.
The central bank of the eurozone and the body responsible for monetary policy in the euro area. NFP – Besides inflation reports, labour market statistics also have a large market-moving effect. NFP stands for “Non-Farm How to trade ETF Payrolls” and is reported together with the average hourly earnings and the unemployment rate on the first Friday each month. A list of professional terms of any sphere is the main instrument for users.
That causes the exchange rate for the euro to fall to 1.10 versus the dollar. Unlike the rest of the foreign exchange market, forex futures are traded on an established exchange, primarily the Chicago Mercantile Exchange. Movement in theshort termis dominated by technical trading, which bases trading decisions on a currency’s direction and speed of movement.
A trader thinks that the European Central Bank will be easing its monetary policy in the coming months as the Eurozone’s economy slows. As a result, the trader bets that the euro will fall against the U.S. dollar and sells short €100,000 at an exchange rate of 1.15. Over the next several weeks the ECB signals that it may indeed ease its monetary policy.
Historically, foreign exchange market participation was for governments, large companies, and hedge funds. In today’s world, trading currencies is as easy as a click of a mouse and accessibility is not an issue. Manyinvestment companies allow individuals to open accounts and trade currencies through their platforms. The Forex market determines the day-to-day value, or the exchange rate, of most of the world’s currencies. If a traveler exchanges dollars for euros at an exchange kiosk or a bank, the number of euros will be based on the current forex rate.
By contrast, the total notional value of U.S. equity markets on Dec. 31, 2021, was approximately $393 billion. Had the euro strengthened versus the dollar, it would have resulted in a loss. Forex futures are derivative contracts in which a buyer and a seller agree to a transaction at a set date and price. Aforward contractis tailor-made to the requirements of the counterparties.
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