A pending order is an instruction to buy or sell an instrument when certain preconditions specified by the trader are met. Pending orders fall into two categories, limit orders and stop orders. Essentially, when placing a pending order a trader is informing their broker that they do not want the current market price, but rather that they only want their order executed if the market price reaches a certain level.
Petrodollars are US dollars earned through the sale of oil. Since crude oil is priced in US dollars each transaction involves US dollars changing hands. The term was coined by Ibrahim Oweiss amidst the oil crisis of 1973 as a way of describing the US dollars that OPEC nations were accruing through the sale of their oil.
Purchasing Managers’ Index is a leading economic indicator derived by surveying a large cross-section of private sector purchasing managers in the manufacturing, construction and service sectors. The survey consists of questions regarding business conditions including employment production, prices, new orders, deliveries and inventories. A figure above 50.0 indicates an industry that is expanding, a figure below 50.0 indicates an industry that is contracting.
The term used in currency market to represent the smallest incremental move an exchange rate can make. (Depending on context, normally one basis point, i.e., 0.0001 in the case of EUR/USD, GBD/USD, USD/CHF and .01 in the case of USD/JPY.)
A portfolio is a selection of financial assets held by an investor. These can include stocks, bonds, commodities, options contracts as well as investments in mutual and exchange-traded funds. It is thought prudent to have a diverse investment portfolio as this limits an investor’s exposure to the risk of being tied to a single financial instrument.
A position is a trading view expressed by buying or selling. It can refer to the amount of a currency either owned or owed by an investor.
Producer Price Index is a leading economic indicator which tracks the changing prices of goods and services sold by producers on a monthly basis. PPI is an important indicator of consumer inflation as higher prices charged by producers will ordinarily be passed on to the consumer. When this report is released before CPI (consumer price index) it will have more of a market impact due to the two reports being highly correlated. A PPI figure that is higher than forecast will tend to have a positive effect on the value of the currency in question.
In the currency markets, it is the amount of points added to the spot price to determine a forward or futures price.
Profit and loss is calculated by taking the average profit from winning trades and dividing it by the average loss from losing trades. The result is two numbers which form a profit and loss ratio. A common benchmark for a successful strategy is that it should generate a profit and loss ratio of at least 2:1, in other words two wins for every one loss