Forex Guide,Forex Tips&Forex Book to maximize profit in forex at myforexbook.blogspot.

FOREX GLOSSARY


Random Walk Theory
An efficient market hypothesis, stating that prices move randomly versus their intrinsic value. Therefore, no one can forecast market activity based on the available information

Rally
A recovery in price after a period of decline.

Range
The difference between the highest and lowest price of a future recorded during a given trading session.

Rate
The price of one currency in terms of another.

Ratio Calendar Spread
Selling more near-term options than longer maturity options at the same strike price.

Ratio Spread
Buying a specific quantity of options and selling a larger quantity of out of the money options.

Reaction
A decline in prices following an advance.

Real
A price, interest rate or statistic that has been adjusted to eliminate the effect of inflation

Realignment
Simultaneous and mutually co-ordinated re- and devaluation of the currencies of several countries. An activity that mostly refers to EMS activity.

Realized P/L
The profit and loss generated from closed positions.

Reciprocal Currency
A currency that is normally quoted as dollars per unit of currency rather than the normal quote method of units of currency per dollar. Sterling is the most common example

Regulated Market
A market that is regulated usually by a governmental agency that issues a number of guidelines and restrictions designed to protect investors.

Reinvestment Rate
The rate at which interest earned on a loan can be reinvested. The rate may not attract the same level of interest as the principal amount

Repo - Re-purchase
This type of trade involves the sale and later re-purchase of an instrument, at a specified time and date. Occurs in the short-term money market.

Report
French term for premium

Reporting Dealer
Term for US Primary Dealers

Reserves
Funds held against future contingencies., normally a combination of convertible foreign currency, gold, and SDRs. Official reserves are to ensure that a government can meet near term obligations. They are an asset in the balance of payments

Reserve Currency
A currency held by a central bank on a permanent basis as a store of international liquidity, these are normally Dollar, Euro, and sterling

Reserve Requirement
The ratio of reserves to deposits, expressed as a fraction prescribed by national banking authorities, including the United States

Reserve Tranche
The 25% of its quota to which a member of the IMF has unconditional access, and for which there is no obligation to repay.

Resistance
A term used in technical analysis indicating a specific price level at which a currency will have the inability to cross above. Recurring failure for the price to move above that point produces a pattern that can usually be shaped by a straight line.

Rescheduling
The renegotiation of the terms of existing debts. The term is usually used with reference to LDC debt. The term rescheduling is considered to be refinancing to avoid any implication of default. Major sovereign debt rescheduling for Brazil, and Mexico have been undertaken in recent years

Retail Price Index
Measurement of the monthly change in the average level of prices at retail, normally of a defined group of goods

Revaluation
Increase in the exchange rate of a currency as a result of official action.

Revaluation Rate
(1)The rate for any period or currency which is used to revalue a position or book.
(2) Revolving credit Upon repayment by the borrower the credit becomes automatically available.

Reversal
(1)Process of changing a call into a put.
(2) Reversal patterns that occur at the end of the trend, signalling the trend change

Right hand side
Corresponds to the Ask or Offer price of a foreign exchange rate. For example, given a price of 1.9720 - .1.9726, the right hand side is .9635. The right hand side is the side that a client would buy at.

Ring
An area on a trading floor where futures or equities are traded

Risk Capital
The amount of money the Customer is willing to put at risk and, which if lost would not, change the Customer's lifestyle or the Customer's family lifestyle

Risk Factor
The risk factor (delta) indicates the risk of an option position relative to that of the related futures contract.

Risk Management
To hedge one's risk they will employ financial analysis and trading techniques
Process whereby the settlement of a deal is rolled forward to another value date. The cost of this process is based on the interest rate differential of the two currencies.

Risk Position
An asset or liability, which is exposed to fluctuations in value through changes in exchange rates or interest rates

Risk Premium
Additional sum payable or return to compensate a party for adopting a particular risk.

Risk Reversal
(1)Additional sum payable or return to compensate a party for adopting a particular risk
(2)The put limits downside, while the call limits the upside

Rollover
The process of extending the settlement value date on an open position forward to the next valid value date.

Rollover Credit
Medium term credit with a variable interest rate, which is governed by the currently prevailing rates on the Euromarket.

Round Trip
Buying and selling of a specified amount of currency.

Running a Position
Keeping open positions in the hope of a speculative gain.