Technical Analysis of the Currency Market: Classic Techniques for Profiting from Market Swings and Trader Sentiment

Glossary

account A record of transactions of goods and services owed to one person by another.

ADX. See Average Directional Index.

agent An intermediary or person hired to carry out transactions on behalf of another person.

aggregate demand Total demand in an economy, consisting of government spending, private/consumer purchasing, and business investment.

all or none Refers to requests for a broker to fill an order completely at a predetermined price or not at all. Refers to both buy and sell orders.

anonymous trading Visible bids and offers on the market without the identity of the bidder and seller being revealed. Anonymous trades allow the high-profile investors to execute transactions without the scrutiny of the whole market.

appreciation An increase in the value of a currency in response to market demand.

arbitrage A riskless opportunity to profit, with no uncertainty involved. In the foreign exchange market, arbitrage arises when a profit can be made by locking in differentials in exchange rates of identical currency pairs. For example, a trader who is able to execute equal-amount purchases of GBP/USD and USD/JPY against a sale of GBP/JPY for a profit would be engaging in arbitrage. Arbitrage opportunities in the foreign exchange market are rare.

ascending triangle A bullish continuation pattern that is shaped like a right triangle consisting of two or more equal highs forming a horizontal line at the top.

ask rate The lowest price at which a financial instrument will be ...