GLOSSARY

Cable

The Cable is the nickname that traders use to refer to the GBPUSD exchange rate. The name is taken from the cables that were laid between Great Britain and the United States in the mid 1800s, enabling GBPUSD exchange rates to be kept in sync between the two nations via telegraph.

Candlestick Chart

Candlestick charts are by far the most popular chart type employed by traders the world over. They go back to 19th century Japanese traders, who used them to plot the fluctuating price of rice. Each candlestick represents the price action that has taken place in a given period of time, and includes that period’s open, close, high and low prices. Candlesticks comprise a body (the rectangular part) and a wick (the lines extending above and below the body). The top and bottom of each rectangle represent the opening and closing prices, while the wicks above and below the body represent the highs and lows reached within the given period.

Carry Trade

Carry trades take advantage of interest rate differences between currencies. Typically, a carry trade will involve selling a currency with a low interest rate on margin and using the proceeds to purchase a different currency with a higher interest rate.

CFD (Contract for Difference)

A contract for difference is a type of financial instrument that allows traders to speculate on an asset without having to purchase it outright. Instead, CFD contracts allow you to trade the difference between the price when the trade was made and when it is finally closed. The derivative nature of CFDs allows for trades to be made on all sorts of underlying assets.

Chart Pattern

Chart patterns are formations of candles used in technical analysis to provide buy and sell signals. Technical analysts have managed to formalise a large number of such chart patterns and individual candlestick shapes, each representing a variety of underlying market conditions.

Closing Order

A closing order is an instruction for an open position to be closed when the price reaches a predefined level. A closing order will remain active until the conditions you have defined are met, in which case it will be filled and your trade will be closed.

CPI (Consumer Price Index)

The Consumer Price Index is an economic indicator that is usually released on a monthly basis. It tracks the changing value of goods and services purchased by consumers within a country. Inflation is closely related to the value of a country’s currency as central banks can raise interest rates to counterbalance rising inflation. CPI is considered an important indicator by traders, as rising consumer prices are one of the most accurate indicators of inflation within a country. When a nation’s CPI data comes in lower than expected, it is considered a good sign for the national currency.

Cryptocurrencies

Cryptocurrencies are a relatively new species of digital currency, allowing for the transfer of tokens between parties across the internet without any intermediaries. They generally consist of a public ledger of transactions, with all nodes on the network agreeing upon its state through the use of some kind of consensus algorithm. Bitcoin was the first truly decentralised cryptocurrency and has been in existence since 2008. To date there are over 700 different cryptocurrencies in existence, also referred to as Altcoins.

Commission

Commission is a fee charged by a brokerage, usually on a per transaction basis.

Commodity

Commodities generally come in two varieties, hard and soft. Hard commodities are those that are extracted from the ground, such as precious metals and crude oil. Soft commodities are those that are grown and harvested, such as coffee, sugar and wheat. For commodities to be tradable over an exchange, they must be certified as being of a standardized quality and quantity. In this way they can be considered as interchangeable with any other commodity of the same kind coming from another producer.