Admiral Markets AS Latvijas filiāle | Brīvības iela 151, Rīga | +371 6611 6588 | admiral@admiral.lv

Trader's glossary

Contents:
 

1. Terms and Definitions

2. How to make profit in Forex, Futures, Indices & CFD financial markets?

3. What are margin requirements, spreads and SWAPs in Admiral Markets AS?

4. What is the margin for hedged positions?

5. What is the Stop Out level (Margin Call) for my trading account?

6. What is the maximum amount of Active Orders and Positions?


 

1. Terms and Definitions

A

‘Abnormal Market Conditions’ — ‘Rapid Market’ or ‘Thin Market’.

‘Account History’ — a register of completed transactions, balance operations and cancelled orders in Customer’s account.

‘AM’ — a dealer in contracts for differences on spot foreign currencies, stocks and futures registered at the following address: One Love Lane, London, EC2V 7JN, United Kingdom.

‘AM Website’ — Admiral Markets website at www.admiralmarkets.co.uk.

‘Asian Session’ — 23:00 – 08:00 (Tokyo)

‘Ask’ — the price at which a seller or a market maker is willing to accept for a traded instrument, also known as the offer price; a price for establishing an open Buy position.

‘AUS 200’ — Other name for the Australian Securities Exchange (ASX 200). 200 stands for top 200(by market capitalization) companies listed on the ASX.

‘Available Margin’ (‘Free Margin’) — a rest of funds in Customer’s account with the deduction of margin, floating profit/loss and rollovers summary.

‘Aussie’ — ‘Ozzie’ or ‘Oz’, refers to the AUD/USD currency pair.

B

‘Balance’ — a summarized financial result of all funds deposited in and withdrawn from Customer’s account and of all closed positions in Customer’s account.

‘Base Currency’ — The first currency in a currency pair (for example if EUR/USD rate is 1.3283 then one EUR is worth 1.3283 USD).

‘Base Rate’ — Given country central bank lending rate used by banks to calculate the interest rate to borrowers.

‘Bearish / Bear Market’ — Slang for down trend market (price is declining).

‘Bear’ — Slang for trader who expect prices to decline / Trader who is holding short position.

‘Basis Point’ — A unit that describes the minimum change in the price of a product.

‘Bid’ — The price at which a seller or a market maker is willing to buy a traded instrument; a price for establishing an open Sell position.

‘BOC’ — Bank Of Canada (The central bank of Canada).

‘BOE’ — Bank Of England (The central bank of UK).

‘BOJ’ — Bank Of Japan (The central bank of Japan).

‘Bull / Bullish Market’ — Slang for uptrend market (price is rising).

‘Bull’ — Slang for trader who expect prices to rise / Trader who is holding long position.

‘Bundesbank’ — The central bank of Germany (Slang BUBA).

‘Buy Limit’ — a pending order for establishing an open Buy position in Customer’s account in the event the price on the specified instrument falls to the specified level; can be only executed at the Ask price and placed below the current Ask price of the specified instrument.

‘Buy Position’ — an open position that represents expectation that market price shall increase. For example, buying the base currency against the quote currency or buying a contract for differences on an underlying security rate.

‘Buy Stop’ — a pending order for establishing an open Buy position in Customer’s account in the event the price on the specified instrument rises to the specified level; can be only executed at the Ask price and placed above the current Ask price of the specified instrument.

C

‘Cable’ — Slang for GBP/USD currency pair.

‘CAC40’ — Short name for French Stock Exchange; 40 stands for top 40 companies (by market cap.).

‘Candlestick Chart’ — One of the ways to view or show a chart. It indicates opening and closing price in chosen date range. If the close price is higher than the open price, than area of the candlestick is not shaded and it will be shaded if open price is higher than the close price.

‘CBs’ — Short for central banks.

‘Central Bank’ — Usually a government organization that manages a country’s monetary policy.

‘CFD’ (Contract for Differences) — a object of electronic transaction based on the price fluctuation of an underlying asset (for example, stock or futures contract).

‘Chart’ — diagrammatic representation of historical quotes in the form of line, bars or candlesticks.

‘Client Log-file’ — a text file located in the folder MetaTrader4/Logs and used for recording all requests of client terminal; it is created in the form of separate daily files.

‘Client Terminal’ — the MetaTrader 4 program of version 4.хх designed for Customer trading, exercising supervision over Customer accounts, obtaining real—time and historical quotes, news and other market information that AM may have made available to Customer; also commonly used for technical analysis, automated trading by Expert Advisors and for Customer feedback via internal mail system.

‘Close’ — a request or instruction for closing a specified position at the current market price.

‘Close By’ — a request or instruction for closing the two locked positions on the same instrument.

‘Commission’ — an amount of service payments charged to Customer’s account.

‘Contract’ — On Forex market a standard unit (for example 1 lot).

‘Contract Details’ — parameters of an instrument specified by AM for Customer trading and published at AM website.

‘Counterparty’ — One of the participants in a financial transaction.

‘Currency Pair’ — traded instrument based on the change of the value of one currency against another currency.

‘Customer’ — a physical or juridical person, a signatory of Customer Agreement with Admiral Markets.

‘Customer Account’ (Account) — Customer’s personal system register of its transactions, orders and balance operations.

D

‘Data feed’ — a stream of quotes in AM MetaTrader 4 trading platform.

‘Dealer’ — Admiral Market’s employee responsible for accepting Customer requests, executing Customer orders and for carrying out the liquidation of Customer open positions in the event of Stop—Out.

‘Deficit’ — Negative balance for trade or payment (not enough money).

‘Depo’ — Money deposit on account.

‘Demo Account’ — Practice account.

‘Dispute’, Complaint, Claim — the event Customer believes that Admiral Market’s action or inaction is erroneous or contradictory to these Terms or/and to AM Customer Agreement, and vice versa.

‘Dividend adjustment’ - an adjustment that is applied to CFDs on Shares and Indices when a share passes its ex-dividend date (including the ex-date of any special dividend) in the underlying stock market.

‘DJIA or Dow’ — Short for the Dow Jones Industrial Average or US30.

‘Dove’ — Refers to easier monetary policy or lower interest rates. Opposite to hawkish.

‘Downtrend’ — Declining price action which can be described as lower-lows and lower-highs.

E

‘ECB’ — European Central Bank.

‘ECN’ — Electronic Communication Network. This system eliminates third party in the execution of order.

‘EST/EDT’ — New York City time zone (United States Eastern Standard Time/Eastern Daylight Time).

‘ESTX50’ — Short for the Euronext 50 index.

‘European Session’ — 07:00 – 16:00 (London).

‘Expiry’ — an instruction for cancellation of pending order at specified time and date.

‘Expert Advisor’ — a program written in MQL4 (MetaQuotes Language 4) and executed by client terminal for the purpose of automated trading in Customer’s account.

‘Equity’ — a net worth of funds in Customer’s account.

‘Exotic pair’ — less traded currency pair.

‘Explicit Error’ — an event the position opening or closing price significantly differs from the market price being actual at the moment of execution; an event the execution of Customer’s order or request is inconsistent with its order or request by general meaning.

F

‘FED’ — The Federal Reserve Bank, the central bank of the USA.

‘Floating Profit/Loss’ — a difference value between Customer account’s equity and balance.

‘Fill’ — Means the order has been successfully and fully executed.

‘Fill or Kill’ — Order type, if the order cannot be filled, then it will be cancelled (killed).

‘FOMC’ — The Federal Open Market Committee, the policy setting committee of the FED.

‘Foreign Exchange’ — ‘Forex’ “FX’. The global market of buying of one currency and selling of other.

‘FRA40’ — Other name of CAC 40.

‘FTSE 100’ — Short name for UK 100 index.

G

‘G7’ — Group of seven nations – USA, Japan, Germany, UK, France, Italy and Canada.

‘G8’ — G7 + Russia.

‘Gap’ — significant difference between the two consecutive quotes; may been shown on charts as a blank field between bars or candles when the time period between the two quotes covers the bar’s or candlestick’s close time.

‘GDP’ — Gross Domestic Product. Total value of a country’s output, income or expenditure produced within its physical borders.

H

‘Hawkish’ — Refers to easier monetary policy or higher interest rates. Opposite to dove.

‘Hedge’ — Combination of positions or position that reduces the risk of your primary position

‘Hedged margin’ — AM margin requirements for maintaining locked positions.

‘HK40 / HKHI’ — Short name for Hong Kong Seng Index.

I

‘Initial Margin’ (Margin) — AM’s requirements for a security collateral for opening a position.

‘INX’ — Symbol for S&P 500 index.

‘Instant Execution’ — a request execution type that means all quotes shown in client terminal may be accepted by AM for Customer’s trading with no preliminary requests for quotes.

J

‘JPN225’ — Short name for the NEKKEI index.

K

‘Kiwi’ — Slang for NZD/USD.

L

‘Leverage’ — transaction size/margin ratio; for example, the 1:100 leverage shall mean that Customer is required to have 1% of transaction size in its account as a security collateral (i.e. margin).

‘LIBOR’ — The London Inter-Bank Offered Rate. Banks use LIBOR as a base for international lending.

‘London Session’ — 08:00 – 17:00 (London).

‘Long position’ — When the base currency in the pair is bought, the position is called to be long.

‘Loonie’ — Slang for Canadian dollar, also known as Funds.

‘Login’ — Customer account’s unique identification number.

‘Locked Position’ — a position consisting of equal long and short positions on the same instrument; locked positions require 50% of summarized margin for both positions.

‘Lot’ — a transaction size unit in MetaTrader 4; with reference to currency pairs 1 lot is equal to a contract on 100’000 base currency units; with reference to stock CFDs 1 lot is equal to one unit of an underlying security.

‘Lot Size’ — an amount of base currency units or underlying asset units specified by AM contract details as a transaction size per one (1.0) standard lot.

M

‘Margin’ — a summarized value of account’s funds reserved as a security collateral for maintaining Customer’s open position in accordance with AM’s Margin Requirements.

‘Margin Level’ — an equity/margin percentage ratio.

‘Margin Trading’ — a customer trading service utilizing the leveraged technique that provides Customer with ability to make transactions exceeding its account’s deposit.

‘Market Opening’ — the time when instruments become available for Customer trading after weekends, holidays, regular closing intervals or server downtimes.

‘Market Order’ — an electronic instruction for opening a position in Customer’s account at the current market price.

‘MetaTrader 4 AM’ — a software platform designed for online trading; consists of: MetaTrader 4 Client (‘client terminal’), MetaTrader 4 Server (‘server’), MetaTrader 4 Data Center (‘data—center’), MetaTrader 4 Multiterminal (‘multiternminal’), MetaTrader 4 Mobile, MetaTrader 4 Smartphone; it is a technological basis of AM’s customer trading services.

‘Modify’ — a request for modification of pending order’s level; a request for placement, cancellation or modification or ‘Stop Loss’ or ‘Take Profit’ levels on an open position or pending order.

‘Multiple Close By’ — a request or instruction for closing all locked position in Customer’s account.

N

‘New York Session’ — 08:00am – 05:00pm (New York time)

‘Normal Market Conditions’ — antithesis to ‘Rapid Market’ and absence of market data errors.

O

‘Open Position’ — a contract for buying or selling an instrument being in force in Customer’s account; it is the first part of a complete transaction and an obligation for making an equal counter transaction afterwards; it is also treated as Customer’s obligation to satisfy AM’s Margin Requirements and to maintain, without notice or demand from AM, a sufficient account balance at all times to continuously meet AM’s Margin Requirements and the equity/margin minimum ratio specified by AM (for example, a minimum ratio of 30%).

‘Order’ — an electronic instruction for opening or closing a position in Customer’s account on a specified instrument in the event its price reaches the specified level.

‘Order Level’ — a price specified by Customer in order placement request as an instruction for opening a position in Customer’s account at this price under condition determined by order’s type.

‘OTC’ — Over the counter. Describes any transaction that is not conducted via an exchange.

P

‘Pending Order’ — an electronic instruction for opening a position in Customer’s account in the event the price of a specified instrument reaches a specified level; Customer is provided with ability to use pending orders of following types: Buy Limit, Sell Limit, Buy Stop, Sell Stop.

‘Platform Time Zone’ — a time zone the AM server is synchronized with; a time zone which is used for recording any events into the server log—file. MetaTrader 4 AМ is currently synchronized with London time (GMT+2; daylight saving time — GMT+3).

‘Point’ — a minimum of the price change; for example, 0.0001 for EUR/USD (also called ‘pip’)

‘Price’ — 1) a two—way quote; consists of Bid and Ask prices; 2) position opening or closing price; 3) order level;

‘Price Gap’ — an event the current Bid price is above the previous Ask price and vice versa.

Q

‘Quote’ — an electronic message about the current price displayed in Client Terminal; consists of demand price (Bid) and supply price (Ask).

‘Quotes Base’ — the AM server’s archive file containing historical quotes.

‘Quoting’ — providing Customer with quotes that AM may accept for buying or selling instruments in Customer’s account.

R

‘Rapid Market’ — market conditions characterized by significant price changes in short periods of time frequently causing wide gaps between consecutive quote values. Commonly occurs immediately before and/or after important events such as: 1. key economic reports on any of G7 countries; 2. press conferences of G7 financial ministers or central banks’ chairmen; 3. central banks’ decisions on interest rates; 4. market interventions; 5. political or natural force majeure, war, terrorism etc.

‘Rate’ — 1) with reference to currency pair — base currency value in quote currency; 2) with reference to CFDs — underlying asset value.

‘Request’ — 1) an electronic instruction for opening or closing a position, placement, cancellation or modification of order, given by Customer via client Terminal; 2) a query for a two—way quote.

S

‘Sell Limit’ — a pending order for establishing an open Sell position in Customer’s account in the event the price on the specified instrument rises to the specified level; can be only executed at Bid price and placed above the current Bid price of the specified instrument.

‘Sell Position’ — an open position that represents expectation that market price shall decline. For example, selling the base currency against the quote currency or selling a contract for differences on an underlying security rate.

‘Sell Stop’ — a pending order for establishing an open Sell position in Customer’s account in the event the price on the specified instrument falls to the specified level; can be only executed at Bid price and placed below the current Bid price of the specified instrument.

‘Server’ — the program MetaTrader Server of version 4.xx, designed for transmitting requests of client terminals to dealers, sending news, quotes and execution confirmations to client terminals, and recording all messages related to customer trading process; it is a software tool for maintaining mutual liabilities between AM and Customer which are formalized in AM Customer Agreement, contract details and margin requirements.

‘Server Log—file’ — a text file generated by MetaTrader 4 server and used for recording all events related to customer trading and platform performance, including all dialogues between client terminals and dealers.

‘Session Gap’ — a price gap between the first quote of the current market session and the last quote of the previous market session.

‘Slippage’ — a parameter of Expert Advisor designed for setting up the maximum difference between the requested price and the dealer’s price acceptable to Expert Advisor for opening a position in Customer’s account; a difference between order’s price and the price of its actual execution.

‘Spike’ (Data Error) — an incorrect quote generated by server as a result of data feed error; commonly looks like a significant price gap returning close to the previous level on the next price update with no signs of rapid market around. AM has discretion, but not the obligation, to remove such errors from its quotes database.

‘Split Close’ — a partial position closing; for example, closing 0.5 lots of 2.0 lots.

‘Spread’ — a difference between Bid and Ask price, evaluated in points.

‘Stop Loss’ — an order for closing a specified open position at specified level in the event the price moves in unfavourable direction; can be only executed at Bid price and placed below the current Bid price with reference to Buy positions; can be only executed at Ask price and placed above the current Ask price with reference to Sell positions.

‘Stop Out’ — a compulsory closing of Customer’s open positions by AM in the event Customer’s account does not satisfy AM’s Margin Requirements.

‘SWAP’ — an amount of overnight adjustments paid or charged to Customer’s account at 23.59 in the platform time zone, in accordance with values specified in contract details; it is a daily settlement for margin trading services.

‘Swissy’ — Slang for Swiss Franc.

‘Symbol’ — an object of electronic transaction, for example: currency pair, stock CFD, futures CFD; an instrument in MetaTrader 4 online trading platform.

T

‘Take Profit’ — an order for closing a specified open position at specified level in the event the price moves in favourable direction; can be only executed at Bid price and placed above the current Bid price with reference to Buy positions; can be only executed at Ask price and placed below the current Ask price with reference to Sell positions.

‘Thin Market’ — periods of low trading activities and amounts of quotes per time, as compared to normal marker conditions; for example, periods between 21.00 and 00.00 GMT and before Christmas holidays.

‘Ticket’ — an unique identification number of position, order or balance operation in Customer’s account.

‘Trailing Stop’ — a built—it option of client terminal designed for adjusting a Stop Loss order level automatically by a specified amount of points, if the favourable price motion exceeds this amount; it may only work with the client terminal connected to the server.

‘Transaction’ — an operation consisting of two equal counter trades in a specified instrument.

‘Transaction Size’ — lot size multiplied by amount of lots.

U

‘UK100’ — Short name for FTSE 100 index.

‘UK OIL’ — Short name for Brent Crude Oil.

‘U-Shaped Recovery’ — Shape in charting. U-shaped recovery is a gradual rise back to its previous peak after gradual decline.

‘Uptick’ — A new price quote at a price higher than the previous quote.

‘US30’ — Short name for the Dow Jones index.

‘US OIL’ — Short name for WTI Crude Oil.

V

‘Value date’ — Future date on which counterparts to a financial transaction agree to determining the value of a product in price. In the case of a spot foreign exchange trade it is normally two business days after a transaction is agreed upon.

‘V-Shaped Recovery’ — Shape in charting. Such recovery involves a sharp rise to previous peak after a sharp decline.

‘Volatility’ — Measure for fluctuation of price of a financial instrument over time. Delegate to active market that present trade opportunities.

W

‘W-Shaped Recovery’ — Shape in charting. Change of sharp decline, rise, decline and ending with another sharp rise. Middle part of shape can be lower than two price peaks on each side.

‘Whipsaw’ — Slang for very high volatility market where price is moving similar to “whipsaw” at work. Price movement is followed by a sharp and quick reversal movement.

‘Working order’ — Stop or Limit orders that has been placed but not filled yet.

X

‘XAG/USD’ — Symbol for Silver Index.

‘XAU/USD’ — Symbol for Gold Index.

Y

‘YOY” — Year over year. Any measurable events that recur annually. It is popular way to compare the performance of investments.

‘Yield’ — Percentage based income return on an investment.

 

2. How to make profit in Forex, Futures, Indices & CFD financial markets?

Please study the real trading examples in this section of our web site.

3. What are the margin requirements, spreads and SWAPs in Admiral Markets AS?

Please study this section. Detailed specifications for all trading instrument are indicated in this table. Click on any instrument to see further details. You can also request detailed trading parameters in MetaTrader 4 terminal: please select the "Symbols" option from right-click menu in "Market Watch" window.

4. What is the margin for hedged positions?

If you hold two hedged positions simultaneously (for example, one Sell 1.0 Lot position and one Buy 1.0 Lot position in EUR/USD currency pair), only the hedged margin will be required (it is usually equal to 50% of the standard margin). Click on any instrument in this table to see further details on hedged margin requirements.

5. What is the Stop Out level (Margin Call) for my trading account?

The Stop Out level is 30% for all real, demo and contest trading accounts in Admiral Markets AS. 

6. What is the maximum amount of Active Orders and Positions?

Maximum amount of active orders and positions (collectively, orders) is limited to 200 per one Customer account. In the event a bigger amount of orders is required for Customer trading, the said limit can be widened individually or jointly for one or all Customer's accounts, upon request submitted to support@forextrade.ee, explaining the reasonable basis for such widening, and providing desirable value of the limit.

 

 
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