Getting Started in Currency Trading, + Companion Website: Winning in Today's Market, 4th Edition

Glossary

algorithmic trading Trading by means of an automated computer program. Sometimes called program trading.

application program interface (API) Computer code or routines for integrating trading programs to a broker-dealer’s trading platform, most commonly used to allow a proprietary trading program to read and process a broker-dealer’s data feed.

appreciation A currency is said to appreciate when it strengthens in price in response to market demand.

arbitrage The purchase or sale of an instrument and simultaneous taking of an equal and opposite position in a related market so as to take advantage of small price differentials between markets.

ask price 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. 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 U.S. Dollar for 1.4532 Swiss Francs.

at best An instruction given to a dealer to buy or sell at the best rate that can be obtained.

at or better An order to deal at a specific rate or better.

balance of trade The value of a country’s exports minus its imports.

ballooning pip spreads The practice by market makers of increasing pip spreads during fast or illiquid markets. Spreads often balloon just before a news announcement or economic indicator is released.

bar chart A type of chart that consists of four significant ...