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Forex Dictionary – Basic Terms – Part 1

Forex Dictionary – Basic Terms – Part 1

Abenomics

Abenomics comes from the combination of the words “economy” and “Shinzo Abe”, Japan’s Prime Minister. It refers to the measures taken by the Prime Minister by the end of 2012.

The vision comes from three pillars: an expansionary policy for the BoJ, a fiscal policy that expands aimed at providing support for regions affected by the Tsunami, and the promotion of private investment for economic growth.

Absolute-Return Strategy

A strategy developed to look for appreciation over a determined time frame with no regards for market development.

Accumulate

When applied to finances, it refers to the purchase of shares. Shares tend to accumulate as prices decrease, but once price begins rising, stocks are recommended to be held. The idea is that the more shares you purchase and accumulate, the larger the profits once their value grows back.

Accumulation/Distribution

It’s divided into two concepts:

1. Accumulation/Distribution Index: it measures both the trade volume and money flow in relation to the price of a stock and its development.

2. Accumulation/Distribution Line: it’s used to measure the cumulative fund flow to-and-from security.

Active Market

A highly liquid market with a large trade volume.

Adaptive Filter

To average prices while keeping an emphasis on the latest values.

Add

English for “positioning”.

Administrator

The natural or legal issuer-authorised person who can secure payments for proceeds from ownership of securities and provide any necessary action for a new share issue.

ADR

American certificate of deposit, it’s a security that banks issue to represent a number of shares. Owners have the right to acquire both shares and their proceeds.

American Depository Receipt

Investment instrument that’s denominated in USD and issued by financial intermediaries in the US for investment instruments outside of the country; it’s traded on over-the-counter-market or US stock exchanges.

American Depository Receipts

They appeared in the financial market around 1927 in the US to facilitate buying foreign shares. They are not issued in USD but operate similarly to regular shares.

Advance

Can refer to both a price rise or downturn.

Advance/Decline Line

It’s used as an indicator of trends in technical analysis. It’s a calculation using the time series coming from daily differences between rising and falling stocks.

It can determine the quantity of increasing and decreasing titles over a period of time, and it can help to confirm or dismiss possible trends.

Also, the term may be used to refer to the graph itself.

Adverse Execution

It’s the number of losses brought by fluctuations in price action against a trader’s position.

Average Directional Movement Index (ADX)

It’s a technical indicator created by HW Wilder, and it’s used to measure a market trend’s strength.

Amsterdam Exchange Index (AEX)

The volume of trades in stock exchanges decides on the AEX, and the index is checked every year on a free float value basis.

After-Hours

It refers to the time after the closure of official markets.

Calculating Agent

It’s someone designated by an issuer responsible for the determination of payments for an interest period.

Stocks

The term refers to securities used to participate in a company’s management and share its

assets and profits.

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