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Forex Terms

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A
Ask Price Buy price. The price a buyer is willing to pay for a product.
Asian Session 07:00 – 16:00 HKT
Arbitrage Buy and sell a financial product at the same time in different markets in order to take small advantage of price differentials betweens markets.

B
Bid Price Sell price. The price a seller is willing to accept for a product.
Bull Market A upward price trend or 'uptrend' over time.
Bear Market A downward price trend or 'downtrend' over time.
Base Currency The first currency in a currency pair. It shows how much the base currency is worth as measured against the second currency, also known as quote currency.

C
Central Bank A government bank that is responsible for the establishment and maintenance of the nation’s fiscal and monetary policy, as well as for controlling interest rates and money supply.
Commodity Currencies Currencies from countries where mainly rely on exporting natural resources for income, often specifically referring to Canada, New Zealand, Australia and Russia.
Cross Currency Pair A pair of currencies that does not include the U.S. dollar.
Crown Currencies Refers to Loonie (Canadian Dollar), Aussie (Australian Dollar), Sterling (British Pound) and Kiwi (New Zealand Dollar) – countries of the Commonwealth.
Currency Any form of money issued by a government or central bank and used as legal tender and a medium of exchange.
Currency Pair It is a price quote of the exchange rate of two different currencies for trading in the market.
CPI Acronym for Consumer Price Index, a measure of inflation.
Carry Trade A trading strategy that captures the difference in the interest rates earned from buying a currency that pays a relatively high interest rate and selling another currency that pays a lower interest rate.

D
Double Bottom Chart pattern that occurs when the underlying investment moves in a similar pattern to the letter "W".
Double Top Chart pattern that occurs when the underlying investment moves in a similar pattern to the letter "M".

E
Exchange A centralized market like the New York Stock Exchange.
EET Eastern European Time.
EST/EDT The time zone of New York City, which stands for United States Eastern Standard Time/Eastern Daylight time.
European Session 15:00 – 00:00 HKT

F
Fiat Currency Government issued money which is not backed by gold or silver.
Fundamentals The study of basic underlying economic factors which apply to the state of business.
Foreign Exchange/FOREX/FX Buying of one currency and selling of another at the same time.
FOMC Federal Open Market Committee, the policy-making committee of the US Federal Reserve.

G
Gap/Gapping The market moves so fast that the opening prices skip several levels from previous closing price with no trades being made. This situation often follows economic data or news announcements.
GDP The total value of all finished goods and service, that are bought by final user, produced within a country during a specific period and it can be calculated by using expenditures, production or incomes.

H
Hedge An offsetting transaction designed to protect from or minimize the impact of unfavorable movements in the assets’ value.

I
Inflation The decrease of purchasing power of a given currency over time.

L
Liquidity How easy it is to sell or buy a specific product.
Limit order A limit order is an order to buy or sell a product at a specific price better than the market price.
Leverage The same as margin, this is the percentage or fractional increase you can trade from the amount of funds available in your account. With this, traders can trade notional values far higher than the funds available.

M
Margin Margin is the amount of money that a trader needs to put forward in order to open a trade.
Margin Call The amount of money that a trader put is not enough to maintain open positions, trader is required to deposit funds.
Moving Average A calculation that takes the arithmetic mean of a given set of prices over the specific number of days in the past.
Market Value The price at which a product is traded.

N
New York Session 21:00 – 06:00 (Next day) HKT

O
OTC Over-The-Counter. A decentralized market which traded via a broker-dealer network.

P
Pips The smallest unit of price for any foreign currency, pips refer to digits added to or subtracted from the fourth decimal place, i.e. 0.0001.

Q
Quote An indicative market price, for information purposes only in normal situation.
Quote Currency The second currency in a currency pair.

R
Resistance The upper level which prevent the price from rising further.
Rollover Rollover is the interest paid or earned for holding an open position overnight. It is calculated based on the interest rate differential between the two currencies.
Rate The price of one currency expressed in another, usaully used for dealing purposes.

S
Spot price The market price of a product determined by the latest trades on over-the-counter market.
Spread The difference between the buy price and the sell price of a product.
Support The lower level which prevent the price from declining further.
Settlement Date The date on which a contract is scheduled for delivery and payment. Spot settlement in the bullion market is two days after the transaction is struck.
Stop order A limit order is an order to buy or sell a product at a specific price worse than the market price.
Server time Time zone which the server is using.
Slippage The difference between order price and executied price, typically becaused of changing market conditions.
Swap A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.

T
Trailing stop A trailing stop is created by setting up a stop order that ‘trails’ your position by a specific number of points. This is useful for ensuring that you lock in profits if the market moves in your favour.
Technical analysis The process by which charts of past price patterns are studied for clues as to the direction of future price movements.

U
US Dollar Index The value of the US dollar relative to a basket of world currencies, which include the Euro (EUR), Japanese yen (JPY), Canadian dollar (CAD), British pound (GBP), Swedish krona (SEK), and Swiss franc (CHF).

Y
Yield A measure of the annual return on an investment expressed as a percentage.

^ Rakuten Securities was ranked as the world’s fourth largest retail forex broker by volume in Q3 2020 from Finance Magnates.
Ŧ Only available for clients who hold a Rakuten FX account.
¤ Fixed spreads are offered in Rakuten FX account during at least 95% of the time of the monthly core-time trading period (8am to 2am HKT of every trading day). However it is not guaranteed and it shall not apply to the extreme markets circumstances, include but not limit to low liquidity, high volatility, news events and public holidays. During extreme markets circumstances, spreads may widen beyond the offered spreads. Please always refer to the trading platforms for the most updated spreads.
ɞ Order execution rate is calculated based on the AS Streaming and Streaming trading orders in 10k or less order size with lower than 1 pip slippage setting in which were executed during the period between Jan 1 to Nov 1, 2017.
ʊ MARKETSPEED FX platform is the winner of “Online Forex Trading Platform” by Good Design Award in 2012.

To safeguard your trading account(s), you are highly recommended to set a strong password and change it regularly.

When executing customers’ trades, Rakuten Securities HK can be compensated in several ways, which include, but are not limited to: charging fixed lot-based commissions at the open and close of a trade, adding a markup to the spreads, acting as a counterparty in the transactions. As a result, Rakuten Securities HK’s interests may be in conflict with yours.

Rakuten Securities Hong Kong Limited (“Rakuten Securities HK” SFC CE Number: AIM232) is a wholly owned subsidiary of Rakuten Securities, Inc. (*) Rakuten Securities, Inc., one of the major online brokers in Japan, founded in 1999, is a subsidiary of Rakuten Group, Inc. (TOKYO: 4755).
The risk of loss in leveraged foreign exchange trading can be substantial. You may not be suitable as you may sustain losses in excess of your initial margin funds. Leverage can work against you. Placing contingent orders, such as “stop-loss” or “stop-limit” orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives. Do not speculate with capital that you cannot afford to lose. If you decide to trade products offered by Rakuten Securities HK, you must read and understand the information and disclosure provided by Rakuten Securities HK. Rakuten Securities HK may provide general commentary which is not intended as investment advice and must not be construed as such. Seek advice from a separate financial advisor. Rakuten Securities HK and Rakuten Group assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Read and understand the Terms and Conditions on Rakuten Securities HK’s website prior to taking further action.
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(*)Company Registration ID (in Japan): Kanto Local Finance Bureau (Financial Instruments Firms) No.195

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