Forex Definitions

US Dollar Index

The US Dollar Index (USDX) is a futures contract offered by the New York Board of Trade. It is a trade-weighted average of six foreign currencies against the dollar. Currently, the index includes euros (EUR), Japanese yen (JPY), British pounds (GBP), Canadian doll

Cable

Cable is a slang term used among forex traders for the British Pound (GBP). The name is derived from when the British Pound was more dominant and the currency was continually wired between North America and Europe via transatlantic cable. The British Pound is also referred to as Sterling which is ta

Triangular Arbitrage

Triangular arbitrage is a trading strategy involving placing three concurrent trades in three markets in an attempt to profit from imbalances between the markets. Normally applies to currency trading.

Fozzy Method

The Fozzy Method is a forex trading system using daily charts and an RSI/Moving Average crossover. The method uses 8 period RSI with an 8 period exponential moving average layed over it. Average True Range is employed to help estimate exit levels. The entry signal occurs when RSI crosses it’s

Forex Rollovers

Rollover describes the process where the settlement of an open trade is rolled forward to another value date. In the Forex Market trades must be settled within two business days. However, open positions can be swapped forward to the next settlement date. Normally,

Forex

Refers to the OTC market for foreign exchange transactions. Also called the foreign exchange market.

Foreign Exchange

Trading in foreign currency.

Floating Exchange Rates

The Bretton Woods system of currency exchange rate management remained in place until the early 1970′s. However, the system came undone as a result of increasing structural imbalances between nations. The U.S. dollar could no longer hold the value of the peg

Exchange Rate

The price of one currency stated in terms of another currency.

Euroyen

Euroyen refers to Yen deposits held in banks outside Japan. See also: Eurodollars