Glossary

Take profit refers to limit orders that look to sell above the level that was bought or buy back below the level that was sold.

Assuming control of a company by buying its stock.

The process by which charts of past price patterns are studied for clues as to the direction of future price movements.

Traders who base their trading decisions on technical or charts analysis.

US government-issued debt which is repayable in ten years. For example, a US 10-year note.

An illiquid, slippery or choppy market environment. A light-volume market that produces erratic trading conditions.

UK government-issued debt which is repayable in 30 years. For example, a UK 30-year gilt.

The minimum change in price, up or down.

The time remaining until a contract expires.

09:00 – 18:00 (JST).

Simultaneous buying and selling of a currency for delivery the following day.

The Tokyo Overnight Average Rate (TONAR) is the risk-free unsecured interbank overnight interest rate for the Japanese Yen – it’s also known as TONA.

It was created in 2016 in the move to risk-free reference rates. TONAR is the replacement for LIBOR, which is expected to be completely phased out by June 2023. Learn more about the move away from LIBOR.

Measures the difference in value between imported and exported goods and services. Nations with trade surpluses (exports greater than imports), such as Japan, tend to see their currencies appreciate, while countries with trade deficits (imports greater than exports), such as the US, tend to see their currencies weaken.

A trade confirmation is a receipt of an executed order sent to you by your broker. Trade confirmations are sent to verify that the transaction has taken place and you will receive one after every trade you make.

These can be used to assist with tax filings or settle any discrepancies. Confirmations can also be used to check against monthly statements to ensure they correctly reflect the trades made on an account.

Trade confirmations also verify the exact price that the trade has been placed at.

What is required in a trade confirmation?

A trade confirmation must show certain information about a trade. This includes the market traded, the date and time it was placed, the cost, the net value and any additional costs that may have been charged by the broker, such as commission.

Including all of this information helps to verify any specific aspect of the trade. Having the details formally confirmed like this helps to avoid any disputes on price or cost further down the line.

The number of units of product in a contract or lot.

A pair is acting strong and/or moving higher; bids keep entering the market and pushing prices up.

A postponement to trading that is not a suspension from trading.

A market that feels like it wants to move lower, usually associated with an offered market that will not rally despite buying attempts.

A trading model is a rule-based structure created to govern trading activities. Trading models help take some guesswork out of the markets while encouraging investors and traders to set risk parameters.

Models based on proven rules can remove human emotions from decision making. A thoroughly bench-tested statistical model can provide a framework for successful trading.

Some traders backtest their models using historical data and demo accounts to verify how well they work before committing real funds in live markets.

Example of a trading model

An example of a trading model could include trend trading forex pairs based on various criteria and rules that you decide not to breach.

To build the model, you’d decide what style, method and strategy to employ, how much money to risk on each trade and an acceptable level of market risk at any one time. You would also set profit and loss targets.

The trading rules would most likely include which conditions need to be met before you get in or get out of a market. You might use a combination of technical indicators for these entry and exit decisions.

A pair is acting weak and/or moving lower and offers to sell keep coming into the market.

The range between the highest and lowest price of a stock usually expressed with reference to a period of time. For example: 52-week trading range.

A trailing stop allows a trade to continue to gain in value when the market price moves in a favourable direction, but automatically closes the trade if the market price suddenly moves in an unfavourable direction by a specified distance. Placing contingent orders may not necessarily limit your losses.

The cost of buying or selling a financial product.

The date on which a trade occurs.

Price movement that produces a net change in value. An uptrend is identified by higher highs and higher lows. A downtrend is identified by lower highs and lower lows.

The total money value or volume of all executed transactions in a given time period.

When both a bid and offer rate is quoted for a forex transaction.

Symbol for CBOE 10-Year Treasury Yield Index.