Forex Terms Glossary

Currency Calculator

The FxPro currency converter is a simple forex tool to convert a set amount of one currency to another. It features twenty three different currencies.

Simply enter your amount and select your currency from the drop-down list. All prices are updated in real time by FxPro. Next select the currency that you wish to convert to and click Calculate. The forex currency calculator then gives the value based upon the live market pricing.

ECN/STP

The term electronic communication network (ECN) is used to describe the type of computer software which facilitates trading of financial products. These financial products include stocks and currencies. STP stands for Straight Through Processing - and means FX traders are connected directly with liquidity providers such as banks and other financial institutions. FxPro is an STP broker.

Spot

Spot transactions take place over a two day delivery transaction period with the exception of some currency pairs. Spot transactions differ from futures contracts, which usually have the duration of a three month period. The spot transaction trade is a form of direct exchange between two currencies within the minimum amount of time and does not involve a contract but cash. The interest in spot transactions is not included.

Forward

In forward transaction, money is not exchanged until an agreement upon a future date. A buyer and seller consent on an exchange rate for any date in the future, and the transaction occurs on that date, despite of what the market rates are at that point in time. The duration of the trade can be a single day, a week, months or even years. Usually the date is decided by both parties. Then the forward contract is negotiated and agreed upon by both parties.

Swap

The most common type of forward transaction is the FX swap. In an FX swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not standardized contracts and are not traded through an exchange.

Future

CFD Futures are standardised and often traded on an exchange produced for this use. Futures contracts often included of any interest amounts and their average contract duration is usually three months.

Option

The FX option (foreign exchange option) provides the owner the opportunity to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The foreign exchange option market is considered by many as the largest and most liquid market for any type of options worldwide.

Forex Account

The type of forex trading account an FX trader opens, with a retail forex broker in order to trade. There are various forex accounts but the initial one is often a forex demo account. A forex demo account is used for training purposes with no real losses or profit.

Forex Analysis

Forex analysis involves an examination of changes and trends in the forex market to be used by traders to conclude whether the purchase or sale of a currency pair would be appropriate. It is usually a technical analysis with the employment of charts, forex tools, economic indicators and current affairs.

Forex Broker

A forex broker, retail forex broker, or currency trading broker deals with a fraction of the volume of the overall foreign exchange market. Forex brokers have access to trading platforms through which they trade currencies on a regular basis.

Forex Charts

These are charts which allow an FX trader to view historical currency exchange rates provided by forex charting software. This software can be accessed usually for free when opening a new forex trading account.

Foreign Exchange Market

The FX market in which currencies are traded, it is the largest and most liquid market worldwide. Currency exchange markets are comprised by banks, commercial companies, investment companies, management firms, hedge funds and retail forex brokers. The forex market is the largest financial market worldwide. Forex is constructed by a global network of electronic communication that connects participants.

Forex Market Hours

The hours during which trading takes place and forex market participants are able to buy, sell, exchange and speculate on currencies. The forex market is open 24 hours a day and five days a week. Due to the fact that the market operates in multiple time zones, trading can take place at any time.

Forex Scalping

Scalping can be used in reference to trading in securities, commodities and foreign exchange (forex). It is a legitimate method of arbitrage of small price gaps created by the bid-ask price.

Forex Software

Forex trading software has developed in recent years to include web based applications, downloadable applications and mobile platforms.

Forex Spot Rate

Spot forex is the current exchange rate at which a currency pair can be bought or sold and it differs from the forward rate. The spot rate in forex trading is the rate that is most commonly used by traders when trading with an online retail forex broker.

Forex Strategy

Selecting the most profitable forex strategy can be a tricky business. The best forex strategy should maximise the potential for constant profit in forex but at the same time it should not require you to spend an excess time analysing charts and market trends.

Margin calculator

This forex calculator assists the currency trader to determine the selling price for currency pairs to achieve the desired profit margin. Simply enter the trade size and select the currency pair in the desired account currency.Next enter the leverage required and click on the calculate button which automatically generates the required selling price and gross margin.

MetaTrader 4 Trading Platform

The MT4 is an electronic trading platform widely used by online foreign exchange trader such as FxPro. Metatrader 4 MultiTerminal is designed specifically for managing multiple accounts simultaneously. The Metatrader Client Terminal for PCs is designed for analyzing the current market trends and conducting trade operations on the financial markets.

Pips

Pip is the acronym for a percentage point and often pips are referred to as points in currency trading. In simple terms, a pip is the smallest unit of price for a currency pair and a pip is the last decimal point in exchange rates or currency pairs.

Pip Value

The value of the forex pip can be determined by a simple calculation. For currency pairs in which USD is the base currency, you simply need to divide a pip (usually a pip is 0.0001) by the exchange rate.

Pip Calculator

A pip calculator helps you determine the value per pip in your account currency, so that you better manage your risk per trader. When you go to FxPro Forex tools you can add the numbers and currency pair you are trading with to get the dollar value of each pip.