Balance of Trade
The value of a country's exports minus its imports.
Bar Chart
A type of chart which consists of four significant points: the high and the low prices, which form the vertical bar; the opening price, which is marked with a little horizontal line to the left of the bar; and the closing price, which is marked with a little horizontal line to the right of the bar.
Base Currency
The currency in which an investor or issuer maintains its book of accounts; the currency that other currencies are quoted against. In the Forex market, the US dollar is normally considered the base currency for quotes, meaning that quotes are expressed as a unit of $1 USD per the other currency quoted in the pair.
Basic Point
A unit that is equal to 1/100th of a percentage point.
Bear
An investor who believes that prices/the market will decline.
Bear Market
A market distinguished by a prolonged period of declining prices, widespread selling of underlying assets and pessimism. The situation is often self-perpetuating because falling prices cause investors to want to cut their losses and also sell, which exacerbates the downward trend.
Bearish Reversal
A bearish reversal occurs when an upward-trending, or bullish, market begins to move in the opposite direction.
Bearish Sentiment
Bearish sentiment is the negative feeling surrounding the value and future prospects of underlying assets. Bearish sentiment precedes bear market entry and encourages investors to start selling.
Bid
The price that a buyer is prepared to purchase at; the price offered for a currency.
Black Swan Event
Coined by Nassim Nicholas Taleb, the term refers to surprise events that have large knock-on effects. The idea being that these outlier events have historically had a disproportionate influence on global affairs and are nearly impossible to foresee.
Bonds
Bonds are tradable instruments (debt securities) which are issued by a borrower to raise capital. They pay either fixed or floating interest, known as the coupon. As interest rates fall, bond prices rise and vice versa.
Bretton Woods Agreement of 1944
An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold at US$35 per ounce. The agreement lasted until 1971, when President Nixon overturned the Bretton Woods agreement and established a floating exchange rate for the major currencies.
Broker
An individual or firm that acts as an intermediary, putting together buyers and sellers usually for a fee or commission; In contrast, a `dealer` commits capital and takes one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party.
BUBA
Bundesbank, Central Bank of Germany.
Bull
An investor who believes that prices/the market will rise.
Bull Market
A prolonged period of generally rising prices.
Buy Limit Order
An order to execute a transaction at a specified price (the limit) or lower, as an example, if the current price of USD/JPY is 112.80/84, then a limit order to buy USD would be at a price lower 112, i.e., 111.60).