The forex industry is made up of countless definitions and it’s easy to forget a few along the way. But because no forex education can be complete without a glossary of forex terms, we’ve compiled one which aims at explaining key definitions in the simplest way possible.
Forex Glossary
The Industry's Most Important Terms Explained
- Account balance keyboard_arrow_down
- The account balance reflects the capital on your account excluding the profit/losses from your current open positions.
- Account Equity keyboard_arrow_down
- The equity reflects your balance + your floating profit /loss of your open positions.
- Appreciation keyboard_arrow_down
- A currency is said to ‘appreciate’ when it strengthens in price in response to market demand.
- Arbitrage keyboard_arrow_down
- The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market, in order to take advantage of small price differentials between markets.
- Ask (Offer) Price keyboard_arrow_down
- The price at which the market is prepared to sell a specific Currency in a Foreign Exchange Contract or Cross Currency Contract. At this price, the trader can buy the base currency. In the quotation, it is shown on the right side of the quotation. For example, in the quote USD/CHF 1.4527/32, the ask price is 1.4532; meaning you can buy one US dollar for 1.4532 Swiss francs.
- At Best keyboard_arrow_down
- An instruction given to a dealer to buy or sell at the best rate that can be obtained.
- At or Better keyboard_arrow_down
- An order to deal at a specific rate or better.