Lot

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A standard lot is the equivalent of 100,000 units of the base currency in a forex trade. A mini lot refers to 10,000 units, a micro lot to 1,000 units and a nano lot to 100 units.

MPC

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The Monetary Policy Committee (MPC) is the monetary policymaking body of the Bank of England (BoE). The MPC sets and announces policy eight times a year.

OTC

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Over-the-counter (OTC) refers to the process of how securities are traded for companies not listed on a standard exchange. For instance, the forex market is made up of two levels; the interbank market and the OTC market where individuals trade through online platforms and brokers.

Overbought

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Since traders use different tolls to analyze a currency, overbought is a subjective term. One of the technical indicators that determines if a currency is overbought, is the relative strength index (RSI).

Oversold

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As well as ‘overbought’, oversold is a subjective term since traders use different tolls to analyze a currency. One of the technical indicators that determines if a currency is oversold, is the relative strength index (RSI).

Pandemic emergency purchase programme (PEPP)

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The ECB’s pandemic emergency purchase programme (PEPP) is a non-standard monetary policy measure initiated in March 2020 to counter the serious risks to the monetary policy transmission mechanism and the outlook for the euro area posed by the coronavirus (COVID-19) outbreak.

The PEPP is a temporary asset purchase programme of private and public sector securities. On 10 December 2020 the Governing Council decided to increase the €1,35 trillion envelope for the PEPP by €500 billion to a total of €1,85 billion, and extended by nine months to at least the end of March 2022.

 

Pending Order

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A pending order is a request from a trader to a broker to state at which price level a position should be opened or closed. Professional traders use pending orders on a daily basis.

Pip

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A pip expresses the change in value between two currencies. If EUR/USD moves from 1.1270 to 1.1271, that 0.0001 USD rise in value is called one pip.

Pipette

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A pipette refers to the 5th decimal place when quoting a currency. For instance, if EUR/USD moves from 1.12751 to 1.12752, that 0,00001 move is one pipette.

Professional Forex

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A professional forex trader trades fulltime in the foreign exchange market and has a strategy that shows consistent profitability. Here are some important points why professional forex traders, in our view, succeed far more in the market: 1. They have a large trading account (>10.000 $), 2. They know the right money management, 3. They have a daily trading plan (and do not trade every day), 4. They have a daily trading strategy, which has proved profitable, 5. They are able to adapt to market changes, 6. They analyze the market technically and fundamentally every day, 7. They maintain a trading journal and 8. They have the mental strength and discipline to follow the same approach every day.