An Alphabetical list of the important Forex Trading Abbreviations which every Trader needs to learn and know to be taken seriously.
CFA
CFA stands for Chartered Financial Analyst, a highly regarded designation attained by an investment management professional who has completed all three parts of the CFA Institute examination.
It is considered one of the most respected distinctions in the investment management profession.
CFD
CFD refers to contract for difference, a specialised and popular financial derivative. It allows forex traders to speculate on fast rising and falling prices of currencies in forex markets.
ECN
ECN is the abbreviation for electronic communication network, also called electronic currency network.
It is a computerised network that is utilized by a forex ECN broker to link clients to liquidity providers in the currency markets.
EMS
EMS stands for European Monetary System, an exchange rate mechanism, organised in 1979 between members of the European Community (EC).
The objective was to stabilise inflation and put an end to large exchange rate fluctuations between neighbouring European countries.
The EMS was later succeeded by the European Economic and Monetary Union (EMU), which set up a common currency for Europe, called the euro, circulating since the start of 1999.
ERM
Exchange rate mechanism (ERM) is a method used by central banks of countries to control the currency exchange rate of a country relative to the currencies of other countries.
ETF
Exchange-traded funds (ETFs) are baskets of different types of investments, such as stocks, bonds, or commodities, that are traded on stock exchanges.
Each share of an EFT allows the shareholder a proportional portion of the total assets of the EFT.
FA
Fundamental analysis (FA) is a way of analysing the economic, political, and social conditions of a country that may affect its currency prices.
FCA
FCA stands for Financial Conduct Authority, an organisation that regulates the financial services industry, including the forex sector, in the United Kingdom (UK).
Forex traders and other forex market participants are to adhere to strict guidelines set by the FCA.
FCM
A futures commission merchant (FCM) is an individual or entity that solicits or accepts orders to buy or sell futures contracts, options on futures, retail foreign exchange contracts or swaps and accepts money or other assets from customers to support such orders.
FSB
The Financial Services Board (FSB) in South Africa was transformed into the Financial Sector Conduct Authority (FSCA) on 1 April 2018.
Forex brokers and the buying and selling of foreign exchange in South Africa are regulated by the FSCA.
FX
FX is an abbreviation of forex, both of which refer to foreign exchange.
Foreign exchange refers to the foreign exchange market, the over the counter (OTC) market in which the foreign currencies of the world are traded.
It can also refer to the conversion of one currency into another.
GTC
A GTC (Good Til Cancelled) order in forex is an order to buy or sell at a fixed price that remains in place until it is completed or cancelled.
IB
IB refers, inter alia, to the following in forex:
- An introducing broker (IB) in the futures market who advises traders but delegates trade execution and back office operations to another futures merchant.
- The interbank network, which is the primary forex market where banks are able to trade currencies between each other.
- An inside bar is a bar entirely contained within the range of the preceding bar, also referred to as the “mother bar.”
MACD
MACD stands for Moving Average Convergence Divergence, a method used in technical analysis to identify moving averages, indicating a new trend, either bullish or bearish.
MT4
MT4 refers to MetaTrader 4, one of the most popular trading platforms used by many forex traders and brokers.
Suitable for traders of all skill levels, it offers advanced tools of technical analysis.
NDD
NDD is an abbreviation for Non-Dealing Desk, describing a trading platform offered by a forex trader that provides immediate access to the interbank market.
PIP
A pip, short for percentage in point or price interest point, represents a tiny unit of change in the exchange rate of a currency pair.
It is a standardised unit, being the smallest increment that an exchange rate can move up or down.
PP
A pivot point is a technical analysis indicator, used to determine the overall trend of the forex market over different periods of time, in order to identify potential support and resistance levels.
SAR
SAR, an acronym for stop and reverse, is a type of stop-loss order that stops the current trade a forex trader is involved in, and either at the same time or immediately thereafter starts a new trade in the opposite direction.
SEC
SEC stands for Securities and Exchange Commission, a regulatory body in the USA with the mission to protect investors and to maintain fair, orderly, and efficient markets.
SL
SL refers to a stop-loss order. An order to a forex broker to buy or sell when a specified price, known as the stop price, is reached, either below or above the prevailing price when the order was communicated.
SMA
Simple moving average (SMA) is a technical indicator in forex analysis. It is basically the average price over a given number of time periods.
STP
Straight Through Processing (STP) is a forex brokerage system that involves sending client orders directly to liquidity providers, such as banks, or interbank exchange houses, who have access to the interbank market.
TA
Technical analysis (TA) is a trading strategy utilized to identify trading opportunities in price trends and chart patterns on the forex market.
TF
Time frame in forex refers to a period that a forex trader chooses to trade in. Time frames are usually classified as long-term, medium-term, and short term. They can encompass seconds, minutes, hours, days, or months.
TL
A trend line is a line connecting two or more highs or two or more lows on charts.
Its purpose is to determine the historical trend of price movements and to indicate levels of support and resistance.
TP
A take profit (TP) is an order that a forex trader sends to a forex broker, with the instruction to close trade on a transaction once it reaches a certain level of profit.
Frequently Asked Questions
What does P I mean in Forex?
Profit/Loss
How do you explain forex trading?
In simple terms it is just another form of speculation – where you buy a currency at a certain price and then sell it at a higher price to make profit.
What are the terms/abbreviations used in Forex Trading?
Here is a list of the 27 Forex Trading Abbreviations every serious trader knows
What does TL mean in Forex?
Trendline and Touches
Can I start forex trading with $?
Yes.
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