This is a trading strategy in which traders look to profit from small changes in price by rapidly opening and closing a large number of positions in every trading session. In this way risk is limited and profits accumulate due to the sheer volume of trades placed. Scalpers can either trade manually, or with the use of automated strategies.
The process of exchanging the consideration for financial instruments once a transaction has been executed. The settlement of currency trades may or may not involve the actual physical exchange of one currency for another.
To go `short` is to have sold an instrument without actually owning it, and to hold a short position with expectations that the price will decline so it can be bought back in the future at a profit.
An investment position that benefits from a decline in market price (when the base currency in the pair is sold, the position is said to be short).
An order with restrictions on the maximum price to be paid or the minimum price to be received. For example, if the current price of USD/JPY is 112.80/84, then a limit order to buy USD would be at a price higher than 112, i.e., 113.60).
A transaction that occurs immediately, but the funds will usually change hands within two days after deal is struck.
The current market price.
The difference between the bid and offer (ask) prices, also used to measure market liquidity. Narrower spreads usually signify high liquidity.
Also known as a share or equity, a stock is a tradable security which grants the purchaser ownership of a fraction of a corporation, as well as a claim on a percentage of its assets and earnings (dividends). The two main types of stock are common and preferred. Common stock entitles owners to dividends as well as a say at stockholder meetings. Preferred stock owners are entitled to higher dividends but do not have the right to vote at shareholder meetings.
Stop Loss Order
An order to buy/sell at an agreed price. It could be also a pre-arranged stop order, whereby an open position is automatically liquidated when a specified price is reached or passed.
A technique used in technical analysis that indicates a specific price ceiling and floor at which a given exchange rate will automatically correct itself (opposite of resistance).
A currency swap is the simultaneous sale and purchase of the same amount of a given currency at a forward exchange rate.
The Swissy is the market nickname for the Swiss franc.