CitiFX Pro News - Glossary

CitiFX Pro Glossary of Terms
06.10.2011

Account: A unique number that is used to identify the trading account.

Account Overview: Shows an overview of one or more accounts. The overview displays cash availability, base currency, P+L, margin utilisation and other trading metrics.

Account Statement: Provides a high level overview of each accounts balance and associated transactions.

Account Summary:  Displays trading activity for a specific account. If you have more than one account, the Account Summary will also show an aggregate value for each account combined.

Account Value: Shows the current value of the account. The sum of which combines Cash Balance, Transactions not booked and Unrealised Value of positions.

Accumulation Distribution: A momentum indicator that attempts to place a scoring on currency price movements based upon the daily volume traded. Price movements that occur on high volume days are weighted more heavily in comparison to low volumes.  Accumulation Distribution works on the assumption that the more volume that accompanies a price move, the more significant it tends to be.

Activity Log: Displays a list of all your activities on the CitiFX Pro platform. The Activity Log displays trade details, requested prices, orders, system messages etc.

Accumulation Distribution Oscillator (ADO): Calculated by subtracting a 10-day exponential moving average (EMA) from a 3-day EMA of the Accumulation Distribution Indicator.

Adaptive Moving Average Kaufmann (KAMA): An indicator that compares the level of volatility with price direction. KAMA is used to address the issue of trading on slow or fast moving averages.

ADX: The Average Directional Indicator (ADX) shows whether an instrument is trending or not. The higher the ADX, the stronger the underlying trend.  ADX is displayed as a single line which ranges from 0 – 100. Readings of 40 or above indicator a strong trend.

Alexanders Filter ALF:  A technical analysis indicator that measures the rate of rise or fall in an instruments price in terms of a percentage price rise or fall over a set period. Sell signals are interpreted by a sufficiently fast rate of decrease while buy signals are indicated by a fast rate of increase.

Analysis:  An analysis looks at the historic price data of an instrument to try and determine and pre-empt future movements.

Appreciation: Increase in the value of an instrument.

AROON Oscillator (ARO):  The AEO is a trend indicator that uses aspects of the Aroon indicator (Aroon Up and Aroon Down) to determine the strength of a current trend and the likelihood that this trend will continue. ARO is calculated by subtracting Aroon down from Aroon Up. Scores above 0 indicate that a trend is present, while readings below 0, indicate that there is a downward trend.

AROON Up/Down Indicator (AR): The AR indicator measures whether an instrument is a downward or upward trend. It also defines the strength of the trend.

Ask Price:  The ask price is the price at which you can buy an instrument. Compare the ask price with the bid price, to calculate the spread.

Auto-Execution: Auto-execution allows instruments to be bought/sold without manual confirmation.

Available for margin trading: This is the total amount of money available for trading which is calculated by subtracting Used for margin requirements from Account Value.

Average True Range (ATR):  The Average True Range (ATR) is an indicator that measures volatility. The indicator does not provide an indication of price trend, simply the degree of price volatility. High values warn of market tops and bottoms, whereas low values indicate ranging markets.

Bar: A graphic depiction of an instruments movement. A bar usually contains, low, high and closing prices over a set period of time.

Bar HLC Technical Study: A chart that displays the lowest, highest, and closing prices for each chart period.

Bar OHLC Technical Study: A chart that displays, opening, closing, highest and lowest prices for each chart period.

Base Currency: Base currency is the currency that the trader buys or sells. For example, in GBPEUR, the base currency is GBP. I.E 1 unit of GBP is worth a variable amount of EUR. When you buy GBP, you pay with EUR, and when you sell GBP you receive EUR.

Bear: A bear is a trader who believes the price of an instrument is going to fall. A bearish market is where prices are falling, and a bear market is when an instruments price has fallen by 20% or more over a medium/long period of time.

Bid Price: The bid price is the price a trader sells an instrument at.

Bollinger Bands:  Bollinger Bands are a technical analysis tool that can be used to measure the high points or low points of the instruments price relative to previous trades.

Breach: When the price of an instrument exceeds a specified level.

Bull: Opposite to Bear. A bull trader believes the price of an instrument is going to rise. A bullish market is one, where instrument prices are rising, and a bull market is where the price has risen by 20% or more over a sustained period of time.

Buy Offer: A limit order to purchase at the current Ask Price.

Candlestick Technical Study: A combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. The body of a candlestick illustrates the difference between the closing and open price. It’s colour displays whether the market closed up or down. The wicks points out the extreme high and low prices for the currency that day.

Cash Balance: The monetary value of the cash funds currently available in your account.

Close a Position: Closing a position is to carry an opposite trade. For example, if you buy 50,000 GBPEUR, you would have to sell 50,000 GBPEUR to close the position.

Close Rate: This is the same as the Trade Rate and is the price at which a position is closed.

Commission: Any ticket fees or fixed commissions that apply to trades. Commission varies depending on the trade size.

Commodity Channel Index (CCI): The Commodity Channel Index (CCI) measures the instruments price in relation to its moving average. This can be used to signal when a trend is weakening or to highlight when the market is overbought or oversold.

Contingent Order: An order type that is the same as related trade orders. There are a number of contingent orders; One Cancels the Other (O.C.O) – this is an order where the execution of one order cancels out the other. If Done (Slave) order is where the slave order is only activated if the primary order is carried out. 3-way contingent orders are also available where 2 orders are placed, a primary is executed.

Conversion Rate: Profit/losses and transfers are converted into the Base currency of the account based on the days prevailing exchange rate.

Coppock Indicator (CPI): The Coppock Indicator signals the beginning of a bull market when it turns upwards above 0. The indicator should be applied to monthly charts of broad market indices. CPI is displayed as a single line plotted on a vertical range (-100 – 100).

Cost to Close: This is the cost that you would incur when closing a position including trading fees and commission.

Counter Currency: Counter currency is the currency that a trader will pay with or receive when buying/selling an instrument. For example, in GBPEUR, the variable currency is EUR, i.e 1 unit of GBP is worth a variable amount of EUR. When you buy GBP, you pay with EUR, and when you sell GBP you receive EUR.

Day Order (DO): This is an order that is only valid until the end of the day. If the order isn’t placed before this time period, it is cancelled. The end of the day in FX is defined as 22:00 GMT.

Depreciation: This is the decline in the value of an instrument.

Derivative: A derivative is a financial instrument that is derived from another financial instrument that is also known as an ‘underlying’ security.

DMI: The Directional Movement Index shows the strength of a trend. The indicator is plotted as three lines on a scale of 0 to 100. This scale is a measure of market trend. The two lines of DMI show the amount of positive and negative movement. The positive line is called D+ and the negative D-. The direction of these lines and the use of crossovers can show the changes in the current market.  The third line is the ADX  - which is the average of the difference between D+ and D-. The higher the ADX, the higher the trend intensity, readings above 40 indicate a strong trend, whereas readings below 20 show a weak trend.
Donchian Channel: The Donchian Channel (DC) is a volatility indicator that calculates the recent price range using the low and high prices. The DC is displayed as a low and high band – instrument prices tend to stay within the bands. However, if an instrument moves towards the upper band this signals increased probability that the price will decrease down to the moving average. A move towards the lower band often signals that the price may head up. The gap between the two bands also shows market volatility. Tight gaps show stability in the markets; where as loose bands indicate volatility.
Doubled Smoothed Stochastics Blau (DS1): A momentum indicator that compares an instruments closing prices to the low and high prices over a period of time. Like other momentum indicators, the currency market needs to be trending up or down to get the most accurate signals.

Dual Simple Moving Average: The Dual Simple Moving Average, also known as the “Crossover” is a combination of two Moving Averages (MA). Typically speaking, the shorter MA is used for signal generation, whereas the longer MA determines the trend. If the longer MA lies above the shorter MA, it’s a sell signal, while the opposite is a buy signal.

Envelopes (ENV):  Envelopes determine the upper and lower margins of an instruments price range. It consists of two moving averages, one that moves downward and another one that moves upward. Envelopes can indicate trends – if an instruments prices surges above the upper envelope, this suggests strength, where as a drop below the lower envelope shows weakness.

Exchange:  A market where, commodities, futures, options and securities are traded.

Exchange Rate:  The Exchange Rate is the value of one currency for the purpose of conversion to another. For example, 1 GBP might be worth 0.87 EUR or 1.57 USD.

Exposure:  The proportion of a share portfolio at risk in a certain area.

Exposure Coverage: Exposure Coverage can be calculated as the percentage of the current exposure covered by funds available for margin.

Fibonacci Technical Study: Fibonacci Fans and Bands are derived from the Fibonacci number series and indicate areas of support and resistance.

Firewall: A firewall is a device or series of devices that are designed to protect networks from unauthorised access.

Forest: A Forest chart takes the instruments current close price as the base-line and plots each data point in relation to it.

Forward Outright: Is an order to trade a FX instrument on a fixed date at a fixed price. This type of order is often used to hedge exposure risks when dealing with foreign markets.

Forward-forward Contract: This is an order to buy or sell a FX instrument on a fixed date at a fixed price and then place an opposite trade at a later date at a fixed price.

Gann Fan: The Gann Fan tool is used to mark a chart with common rise and run ratios. The trend lines that are drawn can then be used to indicate support and resistance levels.

Gann Mesh: The Gann Mesh technical analysis tool uses geometric angles to relate time and price movements. These angles are most often used as indicators of support and resistance for an FX instrument.

Gann Zero Lines: Gann Zero Lines indicate futures resistance and support zones.

Gearing: Also known as financial leverage, Gearing allows traders and investors to hold a position of greater value than their available equity. When gearing an investment, you only need to deposit a percentage of the current value of the FX instrument.

Good Till Cancelled (GTC): An order that is valid until it’s either executed as the market conditions have met the required criteria or the order is manually cancelled.

Good Till Date (GTD): An order that is live until a specified date. If the market conditions don’t meet the criteria and the order isn’t executed by that date, then it will be cancelled.

Half Turn: Commission that is charged per trade which covers both the buy and sell. The alternative is round-turn commission that includes both closing and opening positions.

Hedge: A tool that is used to offset exposure to investment losses.

IBAN: Acronym for International Bank Account Number. An IBAN contains geographical, bank branch and account number and is used for automatic cross-border payments. An IBAN can be obtained from your local bank.

Ichimoku Kinko Hyo (IKH): The IKH is a technical indicator that is used to determine momentum along with areas of support and resistance. The indicator is displayed as 5 lines called the kijun-sen. Tankan-sen, senkou span, senkou span and chickou spa

If Done Indicator: A two part order that contains a primary order that is executed as soon as market conditions meet the right criteria and a secondary order that will only be activated if the first order is executed.

Instrument: A financial instrument is a tradable asset that has a monetary value.

Instrument Currency: The currency the instrument is traded in.

Interbank: Short-term lending and borrowing between banks.

Interest: A charge that is placed upon borrowings and is usually shown as a percentage per year.

Join Bid:  A Join Bid is a limit order to purchase at the current Bid Price.

Join Offer: Opposite to a Join Bid, a Join Offer is a limit order to sell at the current Ask price.

Kairi Indicator (KRI): The KRI charts the percentage difference between the simple moving average and the current closing price.

Kairi STMA (KST): Charts the closing price divided by the moving average of the closing price, and then multiplied by 100.

Keltner Channel (KCH): The KCH are volatility-based envelopes set above and below an exponential moving average.

Leverage: Leverage allows a trader to hold a position of greater value than their starting equity. Leveraging means that the original deposit only needs to be a fraction off the current value of the FX instrument.

Limit Order: Once the Ask price reaches the price level specified, the trade is then executed. Limit orders to sell are placed above the current market price and are carried out when the Bid price reaches a specified level. Limit Orders are a great way to enter and take profit at a predefined level.

Liquidity: Liquidity is the ease in which you can turn investments into cash. A liquid market is one where there are equal numbers of buyers and sellers that both can fulfil orders.

Long: To go ‘long’ is to buy an instrument. To go ‘short’ is to sell.

MACD (Moving Averages Convergence/ Divergence): MACD shows the difference between two exponential moving averages of closing prices. The difference is plotted over time, along with a moving average of difference. The divergence of the two is then shown as a bar graph. MACD highlights changes in instrument prices and can be used to find trends.

Majority Rule Indicator: A high-level indicator that calculates the percentage of days with rising prices in a chosen period. It can be used to confirm trends; it can also highlight overbought and oversold markets. Oversold markets show very low percentages, whereas overbought markets have high numbers.

Margin:  Margin is the equity required to invest in an instrument, it is shown as a percentage of the current value of the instrument. Margin, also known as leverage or gearing, means that traders only need to invest a small fraction of the instruments true value.

Margin Call: A margin call is a warning that you have exceeded your operating margin limits. In order to eliminate your positions being automatically closed, you should either reduce open position or add additional funds.

Margin Utilisation: The amount of margin you are utilising.

Market Order: An order to sell or buy an instrument as soon as possible at the price available on the market.

Mid Price: Mid-price is the midway point between the bid and the ask price.

Mike Base: The Mike Base indicator is part of a series of ‘Mike’ indicators and serves as the foundation for the other 3. Mike Base calculates the typical price of an instrument by finding out the average of the high, low and close price.

Modified Exponential Moving Average: The difference between the Modified Exponential Moving Average (MEME) and an exponential moving average is that MEME calculates the smoothing factor differently.

Module: A component of the CitiFX Pro platform.

Momentum (MOM): Shows the change of an FX instruments price over a defined period. Momentum is charted as a single line that have a value between 0 and 200.

Money Flow Index (MFI):  A momentum indicator that measures the amount of cash flowing into and out of an instrument by looking at price and volume numbers.

Moving Average (MA): Shows the average value of a security’s price over a defined period. Moving average can be used to measure momentum as well indicate possible areas of support and resistance.

Moving Average Exponential (MAE):  The Moving Average Exponential (MAE) adds extra weight to current prices than to past prices. This gives the MAE the advantage that it’s quicker to respond to price movements than a moving average.

Net Exposure:  The value of your current positions, this value is also converted into the base currency of your account.

Non-margin position:  A non-margin position is used as collateral for margin-requirements.

Not Available as margin collateral:  Only a certain percentage of your FX positions can be used as margin collateral. The ‘not available as margin collateral’ figure is the amount that is above the threshold.

Offer Price: The offer price is the price at which you can buy an instrument.

On Balance Offer (OBV):  A technical analysis that detects momentum.  OBV is calculated based on volume to price change. OBV indicates when an instrument is being bought in volume by a large number of buyers or sold by many sellers. An upward slopping OBV indicates an uptrend, while a downward sloping line shows the opposite.

One Cancels Other:  An order type that consists of two orders. If one is executed the other related order is automatically cancelled.

Open Position:  A position that has yet to be offset with a buy or sell. For example, if you have bought 50,000 EURGBP, the position is open until you sell 50,000 EURGBP.

Option: The right to buy or sell an instrument at a specified time at a pre-determined value.

Order: An order is to buy or sell an instrument.

Order duration: The time period in which an order remains valid.

Oscillator: Tracks the relationship between two moving averages and can be used as an oscillator and/or a trend indicator.

Over The Counter: A trade between two parties that bypasses an exchange.

Parabolic Stop and Reversal: Parabolic SAR is displayed as points on a chart; these points indicate potential reversal in price movement.

Pip (Percentage in point): A pip is the smallest increment by which a FX instruments value can change.

Pivot (PIV):  Displays resistance and support levels based on the previous period’s price movements.

Point and Figure (PFC): Helps traders to identify trend lines and determine levels of support and resistance by filtering out non-significant price movements. Point and Figure charts consist of columns of ‘X’s  which represent rising prices and ‘O’s which represent falling prices.

Portfolio: A portfolio is a range of different financial instruments owned by an individual or organisation. Portfolios can be made up of a number of different instruments from FX to commodities and equities.

POSC: The Price Oscillator (POSC) displays the difference of two moving averages and can be used as a trend indicator to determine when to buy or sell.

Position: A position is an investment in an instrument. When you buy EURGBP, you open a EURGBP position. When you sell EURGBP, you close the position.

Price Channel (PCH): An indicator that forms a channel based on the lowest low and the highest high for an instruments price over a period of time. The two trend lines that are plotted can be used to indicate buy and sell signals. If an instruments price reaches the lower band, this signifies that the instrument is more likely to move up (buy). Similarly, if an instrument reaches the upper band, the price is more likely to to pull back down (sell).

Profit Taking: Closing an open position to take profits.
 
Proxy: A device that sits between a computer and the internet.

Range Action Verification Index (RAVI):  Indicator that can be used to determine whether an FX instrument is trending. The higher the RAVI value, the stronger the trend. Likewise, a falling RAVI indicates the end of a trend or a decrease in strength.
 
Rate of Change (ROC): A technical indicator that shows the percentage difference between the current instrument price and its price ‘n’ periods ago. ROC is displayed as a single line that has a value between -200 and 200.

Rate of Strength Levy (RSL): Compare the instruments current performance with its past. If an FX instrument has an RSL greater than 1, it indicates that the price strength is greater at present than in the past. If RSL is less than1, then it means that the instruments price strength is weaker than in the past.

Related Order: An order that has two parts. There are several related order types. ‘If Done’ orders are orders whereby the secondary order only become active if the primary order is executed. ‘One Cancels the Other’ (O.C.O) is an order type that consists of two orders. If one is executed the other related order is automatically cancelled.

Relative Momentum Index (RMI):  The RMI is similar to the Relative Strength Index but is improved by eliminating the oscillations between defined oversold and overbought levels through the introduction of momentum. The RMI can be used to evaluate both ranging markets as well as trending ones. RMI is displayed as a single line that has a value between 0 and 100.  Oversold levels are below 30 and overbought is above 70.

Relative Strength Index (RSI): A momentum indicator that compares an instruments recent gains to recent losses in order to determine whether its being overbought or oversold.

Resistance: A price level where an instruments rising price is expected to stall and begin to drop down.

Round Turn: Commission that includes both the closing and the opening of a position. A half-turn commission is the alternative, which is commission charged per trade.

Secondary Currency:  The currency that a trader receives or pays with when opening and closing a position.

Secondary Order: An order that is not activated unless the Primary order is executed.

Sell Bid: An order to sell at the current Bid price.

Short Selling: To short a currency is to buy the price currency of a FX pair. For example, shorting EURGBP, would be to buy GBP by selling EUR. Shorting a currency takes advantage of a receding market.

Slave Order: Also known as an If Done order. A Slave Order takes the form of two orders, whereby the secondary order is only activated if the primary order is placed.

Speculative: Buying and selling in the hope of making profit without any due diligence.

Spot Market: A market in which an instrument is traded for immediate delivery. The alternative is a futures market in which delivery is due at a later date.

Spread: The difference between the Ask price and the Bid price.

Standard Deviation (STD): Measures volatility within a market by calculating the difference between the instruments actual price and the average price. Volatile markets will have high levels of dispersion.

Stochastic Oscillator:  A momentum indicator that compares the closing price to the high and low prices over an n period. Stochastics are used to show oversold and overbought conditions. There are a number of variation including Stochastic Fast (FKS) and Stochastic Slow (PKS).

Stocks:  Also known as equities or shares. A Stock is an instrument that represents part ownership of a company.

Stop if Bid Order: If the price specified in the order is Bid on the market, the order is fulfilled at the price offered. A Stop if Bid order is commonly used to buy an FX instrument in a rising market.

Stop if Offered Order: An order that is practised in falling markets. A Stop if Offered order is an order to close a trade when the offer prices touch or breach a specified level.

Stop Order: Order to buy or sell an instrument once the price reaches the desired price.

Stop-loss Order: An order to execute and close a position to control risk and limit losses.

Summary: An overview of your trading status that includes things such as equity levels, net positions, P+L and account values. The summary also displays available margin.

Support: The price level at which an instruments price is expected to slow down and turn upward as investors begin to buy.

Swap: An order to buy an instrument as well as sell at a fixed price at a later date.

Symbol: A unique set of letters that are assigned to an instrument. For example, British Pound – Euro is displayed as GBPEUR.

Trailing Stop Order: A trailing stop order is a stop order that has an activation price that is variable based on the price of the instrument. As the market falls  (short positions) or rises (long positions), the stop price falls or rises proportionately as defined by the trader. This type of order helps to control risk and minimise loss without losing out on profits from trending market conditions.

Transactions not Booked: Trades that have not yet been booked.

Triple Exponential (TRIX): A momentum oscillator that displays the rate or change of a TRIX smoothed moving average of the instruments closing price. The benefit of TRIX is that it filters our insignificant price movements.

Ultimate Oscillator (UOS): A technical indicator that uses the weighted average of three different time periods (short, intermediate and long).

Unrealised margin P+L: Unrealised profit or loss on margin based positions.

Unrealised value of positions: The value of non-margin positions that are; open, unrealised margin profit+loss and the cost to close.

Value Date: The date at which funds for a trade transaction will take place.

Variable Currency: The currency a trader receives or pays with when trading.

Volume (VOL):  Number of contracts or shares traded.

Weighted Close (WTC): An indicator that measures an average price change for an instrument while place emphasis on the closing price by giving twice as much weight as the daily high and low price.

Weighted Moving Average (WMA): Helps to smooth the price curve for better trend identification by placing greater importance on recent prices than older days’ prices.

Williams (WPR): An indicator that measures oversold and overbought market conditions by comparing the high-low range with the closing price of an instrument over an n period of time. WPR is plotted on a chart using negative numbers with a scale ranging from 0 to -100. Overbought levels are between 0 and – 20, whereas oversold conditions are between -80 and -100.

Download Glossary PDF