GLOSSARY

Economic Calendar

Economic calendars are used by traders to keep on top of all the economic data due to be released in the days and weeks ahead. The release of economic reports is usually a regular, pre-scheduled affair, so traders use economic calendars to know exactly what data are due to be released, from which countries and when. This is important as the data in question could affect the open positions of a trader or provide new opportunities.

Economic Indicator

An economic indicator is any report on the performance of an economy or a specific sector of an economy. Economic indicators are periodically released by central banks and are used by traders as a gauge of a country’s economic health and future prospects.

ECN (Electronic Communication Network)

In FX trading, an electronic communication network is a network of price feeds from different liquidity providers, allowing traders to access the best bid and ask prices aggregated from the liquidity available to the network. Primarily used by institutional traders and individuals trading large accounts, ECN trading is particularly useful for those who regularly trade large volumes, as it allows for orders to be executed at the best available prices through the different available liquidity tiers.

Entry Order

An entry order is an instruction for a position to be opened on your behalf when the price reaches a level that has been predefined by you. An entry order will remain active until the conditions you have defined are met, in which case it will be filled and your position will be opened.

Equity

Your equity is your account balance, plus or minus any unrealised profits or losses from any open positions you are currently holding. The word also refers to the stock issued by publicly listed companies.

Expert Advisors (EAs)

Expert Advisors are algorithmic trading strategies developed specifically for the MT4 trading platform. They allow you to trade automatically by turning your trading strategies into sets of instructions that are recognised by the platform. EAs have been instrumental in making the word of algorithmic trading available to retail traders. Today there is a very active development community and market for EAs, as well as a variety of tools for their creation.

Exponential Moving Average (EMA)

Exponential moving averages trace an asset’s average price over a pre-set number of periods while placing greater weight on the most recent data when compared to simple moving averages (SMA). As a result, EMAs react faster to changes in price than SMAs do. Two of the most popular EMAs in technical analysis are the 12-period and 26-period moving averages.

European Session

The European session is the second trading session of each trading day. Europe trades between 7am and 4pm GMT. These hours change when daylight savings time is observed.