Ask

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The ask is the term used when a trader expresses an intention to buy a currency or financial instrument from another trader or institution. The “ask” price is also known as the “offer” price or the price the forex broker is willing to sell to the trader. It is the opposite of the bid.

Bearish

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Being short, or selling is a bearish action for a trader to take. When we say that “we are bearish on the Dax”, it means that we believe the price of the Dax will decline in value. A bear market is when prices are falling – called a downtrend.

Bid

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The bid is the amount that the broker is willing to pay in order to buy a financial instrument. In forex, this is the price that the trader, may sell the base currency. The bid (the price at which a trader can sell a currency or an asset) is quoted as lower than the ask and the difference between the two is known as the spread.

BoE

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The Bank of England (BoE) is the UK’s central bank.

Breakeven

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In investing, the breakeven point (BEP or BE) for a trade is determined by comparing the market price of an asset to the original cost; breakeven is when the two prices are equal. Forex Breakeven example: Assume that we buy 1 lot EUR/USD at the ASK price of 1.1300. The trade moves favorably in profit towards 1.1330 (BID price). We then move the stop-loss to 1.1300 (BID price) so that we are not losing anything if price falls back to the entry level. When also calculating the broker fee for that trade, we could even pull the stop to 1.1301 to equal total expenses.

Breakout

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A breakout is any price movement outside a defined price range with a support and resistance area. Breakouts are significant because they indicate a change in sentiment, a change in the supply and demand of a currency. There are different types of breakouts: Continuation breakouts, reversal breakouts and false breakouts.

Breakout Strategy

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Breakout trading is an attempt to profit from market fluctuations when the price moves outside a defined price range (resistance or support area).

Bullish

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Being long, or buying is a bullish action for a trader to take. When we say “we are bullish on the euro”, it means that we believe the price of the euro will rise. A bull market is when prices are rising – called an uptrend.

Cable

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The term cable is a slang term used by forex traders to refer to the exchange rate between the British pound and U.S. dollar (GBP/USD currency pair rate).

Candlestick

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A candlestick is a way of displaying information about a currency’s price movement. Candlestick charts are one of the most popular components of technical analysis.