Glossary:

Big Figure

Big figure stands for the first two or three numbers indicating a currency’s current valuation. For example, the current USD/YEN is given as 81.2084, so the big figure for USD/YEN would be 81.

Carry

Carry or Interest-Rate Carry is referred to the income or cost associated when you keep a foreign exchange position overnight.

Draw down

It is a measure of loss that can occur at any given point of time or during a period of time. Draw down gives the trader an idea about how much is at stake 

For instance, if a trader is trading with $10,000 and later loses $5000, there is a 50% draw down. 

Equity

Equity is the asset of the trader, calculated with the  formula: Balance + Floating Rate (profit/loss) + Swap

Expected Payoff

Payoff refers to the profit a trader expects in return of the money he has invested.  

Good Till Cancelled Order

As the name suggests Good till cancelled order or GTC is a buy or sell order which continues to exist until it is filled or cancelled.

Metaquotes

The company which provides with the Meta trader software and other related support.

MQL4

MQL4 stands for Meta Quotes Language 4; it is a new language developed for programming of trading strategies. With the help of this language you can create your own automated trading program. MQL4 aids automated trading and is compatible to implement any trading technique or strategy.

MT4

MT4 stands for the Metatrader 4 platform. It is a well equipped terminal which allows traders to use necessary tools and resources to decipher the price dynamic. This is the current platform sold by Metaquotes.

PIP

PIP is an abbreviation for ‘percentage in point’. PIP denotes the slightest of movement a price change makes in the forex market. More than often it is the last decimal place at the price quote. Most currencies have a PIP of .0001.

Profit Factor

Any factor which affects the amount of profit that can be realised such as cost of sales etc

Trailing Stop

Trailing stop is a technique usedby many traders in order to protect their profits without limiting any of their potential gains. This is done by moving the stop(protective cap) up or down with the market. lets take for example, a trader takes up a long futures position when the market is at $10 and places a stop at $6. If the market goes up to $20, the trader can move the stop to $ 17

Win Ratio

Win ratio is a percentage denotation of how many successful trades you have had. It is calculated by dividing the profitable trades by the total number of trades and multiplying by 100.

Risk

This term applies to the risk/exposure that a trader is exposed to when a currency value depreciates suddenly so that the trader’s position is devalued, e.g. USD/YEN

Risk management

Techniques, strategies that a trader uses to minimize his risk exposure to any sudden currency devaluation

Yard

Yard is a slang word used in the currency industry which means a ‘billion’.