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MACD
An indicator used in technical analysis that was invented in the 1970s as a means of showing the differences between both the fast and slow EMAs (Exponential Moving Average) of closing prices, although since 1986 the graph has been produced as a histogram. The moving average as expressed by the MACD is essentially the average of a price over a certain set amount of time and the MACD enables easy demonstration of the relationship between two exponential examples of the moving average.
MAINTENANCE MARGIN
The minimum margin, which an investor must keep at FXDD to maintain an open position.
MAINTENANCE MARGIN EXCESS/DEFICIT
Remaining funds against which a customer can maintain/hold a position(s) until a Margin Call is triggered. Maintenance Margin Excess/Deficit = Account ValueMaintenance % * Margin. It is represented graphically as the top of the red level in the FXDD Margin Monitor.
"MAKE A MARKET"
A dealer is said to "make a market"; when the dealer gives a quoted bid and ask price is given to a customer. The price represents the prices that the dealer is ready to buy from or sell to a customer.
MARGIN CALL
A demand for additional funds to be deposited in a margin account to meet margin requirements because of adverse exchange rate movements.
MARGIN
The aggregate amount of customer cash pledged against the aggregate Open Position(s). The margin pledged is a function of the leverage ratio. The higher the leverage, the lower the pledged Margin. The lower the leverage, the higher the Margin needed to carry the position.
Mathematically, Margin = Open Position Amount / Maximum Trading Leverage Ratio. For example, a USD/CHF 100,000 USD position at Maximum Trading Leverage Ratio 50:1 will require pledged Margin equal to 100,000/50 or $2,000.
Note: To calculate margin for currency pairs, where USD is NOT the Base (First) Currency (e.g. EUR/USD, GBP/USD;) and crosses (EUR/JPY, GBP/JPY;), the Counter Currency amount is first converted into USD using the average exchange rate(s).
Example: Customer buys 1 lot of EUR/USD when the price is .9600 9604. The average exchange rate is .9602. Therefore, 100,000 EUR equals 96,020 USD. $96,020 / 50 Leverage Ratio = $1,920.40
MARK TO MARKET
The daily adjustment of an account to reflect unrealized profits and losses.
MARKET MAKER
A market maker is the counterparty in transactions with the customer/customer.
MARKET ORDER
A Market Order is an order to buy or sell a chosen currency pair at the current market price. A Market Order will be executed at the price displayed at the moment user clicks the button, but only if the currency price remains within a price range (for example, 5 pips) set by the FXDD.
MAXIMUM TRADING LEVERAGE RATIO
Leverage expressed as a ratio, available to open a new position(s). For example, a leverage ratio of 50:1 allows a customer the ability to control a $100,000 lot position with $2,000 of margin ($100,000 / 50 = $2,000).
MONEY SUPPLY
The entire quantity of bills, coins, loans, credit and other liquid instruments in a country's economy. The money supply is important to economists trying to understand how policies will affect interest rates and growth.
MOVING AVERAGE
A way of smoothing a set of price/rate data by taking the average price of data range of values.