Key terms for Forex Glossary from F-J

Forex is so full of unusual terminology, phrases, acronyms, and jargon that frequently makes trading a bit daunting leaving traders a bit confused. Therefore, before you get into forex trading, you need to become acquainted with basic forex terms so as to make informed trading decisions.

Learning to trade on the MT4 trading platform, MT5 or other platforms is hard. When combined with foreign exchange terminology, being unfamiliar with such trading language can be a significant obstacle to a trader’s journey and trading plan.

Keep on reading for a glossary of the most important terms used in online forex trading, starting from the letter F to the letter J.

Most frequently used forex terms: A glossary

As discussed above, when learning a new language, you need to start with the alphabet. The same happens with forex. Traders need to know the trends and latest terms used in forex so as to have an effective trading experience. Undoubtedly, in order to put your strategies to the test and build a trading plan you need to understand how certain things work. As a result, knowing certain terms leads to knowing the factors affecting and surrounding your strategy.

Let’s take a look at a comprehensive F-J list of the most commonly used forex terms.

外汇

Buying one currency while selling another. The currency or 外汇市场 refers to the global market for such transactions.

Foreign Exchange Market

The market where foreign currencies are traded on a global scale. Participants can purchase, sell, trade, and speculate on currencies. Banks, forex dealers, commercial companies, central banks, investment management firms, hedge funds, retail forex dealers, and individual investors make up the foreign exchange markets.

基本面分析

Fundamental Analysis (FA) is a way of determining the inherent worth of a security by studying associated economic and financial elements, as well as other qualitative and quantitative components that influence the performance of a certain financial instrument.

Floating Exchange Rate - (浮动汇率)

A currency’s price can fluctuate freely because it is affected by an open market, as opposed to being fixed to the value of another currency.

Futures Contract - (期货合约)

A 期货 contract is an agreement to purchase or sell a certain amount of a commodity at a specific price and date in the future. Its fulfilment is mandatory.

Gap - (跳空)

Gaps are price fluctuations that occur when the market goes immediately from one accurately reported price to another considerably different one. They are visually depicted as a nonlinear rise or drop from one point on the chart to another.

Germany 30

Germany 30 is the most important stock index in Germany, consisting of a weighted average of the 30 biggest businesses listed on the Frankfurt Stock Exchange. DAX 30 is another name for the Dow Jones Industrial Average.

Going Long

Going long is establishing a buy CFD position in order to profit from a price rise.

Going Short

Going short is placing a sell CFD position in order to profit from a price drop.

Hammer Candlestick - (锤子线蜡烛图)

Is a candlestick charting price pattern that happens when an asset trades much lower than its initial price, but rises during the candlestick period to close near, but lower than, the opening price.

Hedge - (对冲)

A hedge is an investment made to mitigate the risk of an asset’s price fluctuation. A hedge often comprises taking an offsetting position in a similar security, such as options or futures contracts.

Holder - (持有人)

When trading forex, a holder is someone who buys a currency.

Hard Currency

Hard money refers to currencies issued by politically and economically stable countries. The US dollar and the Euro are two examples.

指数

A statistical aggregation of a certain market. For example, the ASX S&P200 aims to assess the value of the top 200 ASX stocks.

Initial margin

When utilising a margin account, the initial margin is the proportion of the purchase cost of a security that must be repaid by cash or collateral.

Inflation - (通货膨胀)

Inflation is a quantitative measure of the rate at which the prices of goods and services grow in total over a certain period of time. Often represented as a percentage, this signifies that when the overall prices rise, the buying power of each unit of currency falls.

Interest Rates - (利率)

Interest rates are the fees that a borrower pays to a lender for the privilege of retaining a debt. They are commonly understood as an annual percentage of the loan balance.

Japanese Yen

The Japanese currency unit is the Yen. It is the 3rd most traded currency in the FX market, after the USD and the EUR.

Jobber

A trader who targets short-term profits during a trading session and almost never leaves a position overnight.

Advantages of meaningful forex terminology

In-depth knowledge

It may seem simple but having a basic awareness of financial terminology improves your comprehension of financial concerns and underlying principles.

After you grasp a good understanding of financial language, you may apply your knowledge to better comprehend the fundamentals of your trading. For example, understanding the phrase “accrual basis” may help you realise why your profit and loss may appear strong, but your cash flow does not.

Better understanding

A certain knowledge of financial terminology will help you to read the data, understand the context and have more productive conversations with fellow traders.

More confidence

Understanding financial language may help you feel less overwhelmed and more confident.

Make informed decisions

Knowing the most important trading terms allows you to better grasp forex trading and gain a more comprehensive knowledge of how markets work.

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