Trading Glossary

Take a look at our list of the financial terms associated with trading and the markets.

falling knife

Falling knife is not a strictly technical term, but a popular word in financial markets. A flying knife is an instrument that has fallen continuously over a period of time, generally referring to stocks. In the process of falling stock prices, due to the greater risk of bottoming out, it is easy to make heavy losses, so buying stocks that fall rapidly, just like catching a falling flying knife, is very dangerous.

Fear, Uncertainty, Doubt

These are common phrases for investors in the cryptocurrency market. It stands for fear, uncertainty and doubt, widely used in sales, marketing, public relations, politics. The main purpose of this strategy is to spread misinformation about certain things and thus mislead the public.

Federal Funds Rate

A form of benchmark interest rate. In the United States, the federal interest rate refers to the overnight lending rate at which depository institutions lend idle funds to another interbank institution, generally referring to the interbank offered rate. The federal interest rate is an important tool for the Fed to regulate the market, by setting a target or range for the federal interest rate, controlling the interest rate level of the short-term market. The Fed meets eight times a year to determine the current federal interest rate target, which is an important guide for the market.

Federal Open Market Committee

The U.S. Federal Readiness System, which is responsible for conducting open market operations. The Committee, composed of 12 members, meets eight times a year in Washington to assess economic growth risks as well as inflation stability to determine monetary policy stances.

Federal Reserve System

Fibonacci arcs are used to determine the direction and speed of trend reversals in the Forex market as well as support and resistance levels. In contrast to Fibonacci retracements, which show only static retracement levels, Fibonacci arcs show dynamic retracements that evolve over time. The price falls slowly when the Fibonacci arc falls, which indicates a downside resistance area; The price rises slowly when it rises, indicating that the support zone is rising.

Federal Trade Commission

FTC is an independent U.S. government agency, founded in 1914, whose main mission is to promote consumer protection and eliminate various anti-competitive business practices such as forced monopolies, and to ensure that market behavior is competitive and prosperous and efficient, free from unreasonable constraints, and also to ensure the smooth operation of the market by eliminating unreasonable and fraudulent regulations or regulations.

Fibonacci Arc

Fibonacci Channel

The Fibonacci channel line is a technical analysis method for judging the trend of price movement, mainly used at support or pressure levels of price fluctuations. The assumption is that when a trend moves in one direction, its pullback in the opposite direction is blocked at a predictable level, and then the trend returns to its original direction. Fibonacci channel lines are more like many parallel price channels, arranged in parallel according to the relationship between fibonacci value proportions, so that the next stage of the market trajectory can be predicted in advance.

Fibonacci Expansion

One of a series of tools using Fibonacci sequences. Unlike the retracement line, which looks for an entry position, the extended line is to find the target position. Draw horizontal lines such as 0.618, 1, 1.618 out of thin air as resistance/support for the target level.

Fibonacci Fans

Fibonacci sectors can provide support and resistance levels as well as time factors, find retracement and breakout levels, predict future market movements, and also realize the technical functions of multiple analytical systems. Fibonacci sectors plot a series of angular trend lines. Fibonacci sectors are generally used over large time periods.

Fibonacci retracement

One of the most commonly used technical indicators for finding key support or resistance levels. It is generally used in trend trading to draw a horizontal line at the position of 38.2%, 50% and 61.8% according to the amplitude of the pullback. In an uptrend, the retracement line is used as a reference for support levels; In a downtrend, the retracement line is used as a reference for resistance levels. It can be optionally used in combination with other technical indicators to increase the winning percentage.

Fibonacci Studies

The Fibonacci Golden Ratio is a mathematical relationship between the Fibonacci numbers. This number was first discovered in the 13th century. Its significance is that when you create a ratio of the Fibonacci numbers between any two consecutive Fibonacci numbers, the two ratios converge on a single value, which is the golden ratio. The golden ratio is also known as the Divine Proportion with the Greek letter phi.

Fibonacci Time Zones

Fibonacci Time Zones are a technical indicator you can apply to the chart that is said to help identify significant areas of time that could result in big moves. They are vertical lines to make it easy for people to project potential swing highs and lows or potential reversals.

Fill

Refers to the order being successfully executed and opening or closing a corresponding position.

Financial Institution

General term for institutions active in financial markets. Financial institutions often provide goods that include deposits, loans, and investments like individuals or businesses. From a regulatory perspective, financial institutions can be classified, namely central banks, commercial banks, investment banks, savings and loan associations, brokerage companies, insurance companies, mortgage companies, and so on.

Financial Instrument

Refers to an asset contract that can be used for trading, exchange and transfer. According to the function of the financial instrument and the underlying asset, it is divided into different types of commodities. Financial instruments including stocks, futures, gold, foreign exchange, bonds, etc., can be bought and sold in the financial markets.

Financial risk

Generally means that a company may face the risk of not being able to repay its liabilities or return shareholders in a timely manner; Financial risk is inevitable in the operation of a company, which describes more of the possibility of a company suffering huge losses. Measuring whether financial risk gives investors an idea of a company's ability to withstand market shocks includes asset-liability ratio, interest coverage ratio, short-term liquidity, and more.

Financial Stability Board

The International Financial Institutions organization (IFI) established by the G20 Group was established in April 2009 after the financial crisis and includes central banks, fiscal and financial regulatory authorities of 20 countries. The main purpose of the organization is to strengthen communication and cooperation in global financial supervision and maintain the stability of the global financial system.

Fiscal policy

A country's government or relevant departments directly affect the economy by adjusting fiscal expenditures and tax revenues. In terms of GDP, government spending accounts for an important part. In general, increasing spending can, but at the same time, it will increase the pressure on fiscal deficits and affect the credit rating of the government. Increasing taxes will ease fiscal pressures, but it will have an impact on economic activity in the market. Compared with monetary policy, the impact of fiscal planning on the market is more complex and long-term, and there are often long-term and sustained promotions/restrictions on related sectors.

Fisher effect

Explain the relationship between inflation expectations and interest rates, and when inflation expectations rise, interest rates will also rise. The basic formula is: nominal interest rate = real interest rate + inflation rate.

Fixed Exchange Rate

Some countries use fixed exchange rates to ensure the stability of local exchange rates. Anchor with the target currency exchange rate or commodity price by adjusting foreign exchange or gold reserves. For example, in the United Statesin 1944 Bretton Woods lowered the dollar and gold anchored, the price of gold has been 35 US dollars / ounce.

Flatten The Deal

In trading terms, buy and sell positions are equal, with neither long nor short positions. The complete two-way transaction of opening and closing a position in a trading position is called a flat trading. It is generally used to calculate transaction costs, for example, the transaction fee for a standard lot is $3, indicating that the total transaction fee for opening a position plus closing a standard lot is $3.

FOMO

Describes the fear of modern people who are not keeping up with the latest trends. This is most commonly seen in cryptocurrency investment circles and refers to the irrational investment behavior that occurs when investors want to keep up with the trend and are afraid of missing this wave of profits.

Foreign Exchange

Forex trading is the purchase of one currency in one pair of currencies and the simultaneous sale of another currency, earning the difference through changes in exchange rates. The foreign exchange market is the largest and most liquid market in the world. Forex trading, unlike foreign exchange, does not involve the buying and selling of real money. Generally, except for holidays, it is possible to trade 24 hours a day, five working days a week.

Foreign Exchange Hedge

In cross-border trade, changes in foreign exchange rates can have a direct impact on a company's final profitability. In order to avoid exchange rate risk, there is foreign exchange hedging. Hedge against the risk of exchange rate fluctuations in the financially reported currency by taking an inverse position in foreign exchange. After hedging, regardless of whether the exchange rate is up or down, the value of the hedging part will not change, and the company's profitability is also protected by foreign exchange hedging.

Forex Spot Rate

Refers to the price at which the currency is traded in the spot market, that is, the exchange rate at which the two parties reach a foreign exchange purchase and sale agreement and handle delivery within two working days. The exchange rate listed in the foreign exchange market generally refers to the spot exchange rate.

Fractals

One of the technical indicators that identifies the reversal point of the price. When a special pattern appears in the price, a fractal arrow is formed. The upper fractal represents the price encountering upward resistance, while the lower fractal represents the support of the system. Often traders will pay attention to the trend signal of the price breaking through the fractal indicator.

Free Cash Flow

Free cash flow is an accounting term in which the cash flow generated from operating activities is deducted from capital expenditures. A positive and higher free cash flow means, healthy operating conditions for the company, in addition to being able to cover the expenses required for operations, but also being able to invest more in the projects that can bring positive returns.

Front Office

Positions in the financial industry are complex, and positions are distinguished by front office, middle office and back office. The front desk in the financial industry generally refers to investment positions, mainly responsible for investment decisions and investment management, or professional service positions that face customers directly. Investment banking is typical of front-office business.

FTSE 100 Index

The FTSE Group's stock index, which is based on the stock price performance of the largest 100 companies listed on the London Stock Exchange, is a barometer of the British economy, also known as the London Financial Times 100 Index. The constituents of the index are updated quarterly.

Full or Kill Order

One of the ways to execute an order. After the order is placed, the trading system matches the order. In this mode of execution, the order must be executed immediately or cancelled in its entirety. For example, if you place an order to go long 100 lots of gold, if only 80 lots are matched, then the order will be cancelled in its entirety.

Fundamental Analysis

Fundamental analysis is the intrinsic value of the commodity, which is used to determine whether the price of is overvalued or undervalued, as a basis for long-term buying (long) or selling (short). Another use is to analyze the factors that affect price changes, and explore the causes and degrees of influence of price changes through the logical relationship between prices and factors, so as to make expectations for future price changes.

Futures

Futures correspond to spot, spot refers to the instrument traded physically, and the carrier of futures does not own the physical instrument, but a contract for buying and selling. It is generally a standardized tradable contract for commodities, financial assets and bonds. Simply put, "futures" are the purchase and sale of commodities at a fixed time in the future.

Futures Contract

A futures contract, referred to as futures, refers to a binding contract in which the parties to a transaction agree to buy or sell the underlying commodity at some point in the future. There must be two counterparts to a futures contract, a buyer on the one hand and a seller on the other.