GLOSSARY

Fibonacci Retracements

In technical analysis, Fibonacci retracements provide support and resistance levels on an asset’s price chart. Fibonacci retracements are not just simple high and low points, they conform to the ratios discovered by the 13th century mathematician which they take their name from. When drawing Fibonacci retracements, you can expect to see lines on your chart conforming to the Fibonacci levels of 23.6%, 38.2%, 50%, 61.8% and 100%. When going from low to high, each line represents a possible support level. When going from high to low, each line represents a possible resistance level. As with all technical indicators, these levels can be self-fulfilling, particularly if enough traders on the same market are observing them.

Floating Profit and Loss

Floating profit and loss is the money you have either gained or lost, depending on the current price action of your open trades. It is referred to as floating because profits or losses have yet to be locked-in as the trade in question is still active.

Foreign Exchange

The foreign exchange market is a global, decentralized market for the trading of currencies between governments, banks, corporations, funds of various kinds and individual traders. Also referred to as forex, or FX, it is the largest, most liquid market in existence, with a daily turnover in excess of $5 trillion. This market trades 24 hours per day, 5 days a week, with each 24 hour trading day being divided into 3 sessions, the Asian, European and North American.

Free Margin

Free margin refers to the funds that you currently have available to post as margin. It does not include any funds that are currently being used to guarantee your existing positions. An easy way to think of free margin is that it is your current equity minus your margin.

FOMC (Federal Open Market Committee)

The Federal open market committee is the policy making group of the US Federal Reserve. The group’s mandate includes voting on whether interest rates are to be increased or reduced. Whenever an FOMC member gives a public address, you can expect traders to hang on their every word for any indication of future policy changes. Consequently, FOMC meetings and addresses are considered high impact indicators, particularly for USD traders.

Fundamental Analysis

Fundamental analysis is a school of market analysis that takes as its basic assumption that an asset is always either overvalued or undervalued. According to fundamental analysis, assets are always moving towards their fair value by constantly taking into account and pricing-in everything that is going on globally. Fundamental analysts focus primarily on external factors, staying abreast of current affairs and geopolitical news as well as the economic reports and forecasts that affect the markets they trade.

Futures

The futures market allows buyers and sellers to speculate on the future value of an asset by agreeing upon a set future price for the asset in question, to be exchanged between them at predetermined later date. This allows a seller of, say, copper, to lock in the price that will be earned for it, thus hedging against the risk of it falling in value in the interim. In a similar way, it allows a prospective buyer of copper to settle on a stable price that will not change by the time the delivery of copper is required. While futures contracts presuppose that some exchange will take place upon expiration, futures are also traded as CFDs (contracts for difference).

cTrader

cTrader is a foreign exchange trading platform developed by Spotware Systems and released in 2011. The platform allows users to trade currencies over an Electronic Communication Network (ECN) which aggregates currency prices from a number of liquidity providers, ensuring that traders always receive the most competitive bid and ask prices.

Front Running

Front running is an illegal practice of brokers entering into an equity trade with foreknowledge of events that are likely to affect the market in order to gain an economic advantage. For instance, a broker who purchases a security with a personal account just before executing a large order on behalf of a client is regarded as front running because the smaller order will likely benefit from a price increase caused by the execution of the second larger order.

Forward

Forwards are private agreements in which a buyer and a seller settle on a price for a given asset but defer delivery until an agreed-upon later date. This may be days, weeks, months or even years later. When the contract matures the buyer is obliged to buy and the seller is obliged to sell at the price secured, irrespective of the present market conditions. Forwards are often used by farmers to guarantee that they will receive a set price for their crops before they are harvested, thus hedging against uncertainty of the future market price.