Liquidity - financial simplicity of contract, aka cash
Trading volume - the quantity traded
Bid/ask spread - the difference between the proposed buying price and the actual selling price
OTC - over the counter
Exchange rate - the difference between currency values; for instance, a EUR worth 1.2763 USD
Hedge funds - large mutual fund companies that have power over huge amounts of money and are able to influence the value of a currency through speculation
Central bank - the national bank of a nation, which usually exerts control over the value of that currency
Currency Pair - All currencies must be sold in pairs. You need two currencies to make up an exchange rate.
Base Currency- This is the first currency in a pair
Counter Currency (aka terms currency) - This is the second currency used in a pair.
Bullish (Trading Trend) - When price moves consistently in one direction in the FOREX, a trend occurs.
When the direction is higher
Bearish (Trading Trend) - When the direction of the price is moving lower
Trend Reversal - the direction of market prices is changing
Leverage - the ratio between the funds you deposit (Security) in your account to the actual value of the FOREX contract
Fundamental analysis - Analysts that rely on both political and economic factors and indicators to assist determine trades and forecast the market movements
Technical analysis - Analysts that rely on charts, hard cold data and analysis of historical price activity to assist determine trades and forecast the market movements
Pips - the smallest rise of a change in price (1/10,000 of the value)
Sterling- Another term for British currency, the GBP
