4X MSTRS Flashcards
Which pairs represent national currencies that are widely traded and whose economies rely heavily on commodity exports?
- AUD/ USD (gold, iron, coal, aluminum, beef)
- NZD/ USD (gold, agriculture)
- USD/ CAD (oil, natural gas, timber)
What is a cross currency pair?
A currency pair which doesn’t include the US dollar
What are the 4 major cross pairs (i.e., the most actively traded of the cross currency pairs)?
- EUR/ CHF
- EUR/ JPY
- EUR/ GBP
- GBP/ JPY
What is the interbank market? What is it also known as?
A. It’s the segment of the FX market where the really big institutions (central banks, commercial banks, and financial institutions) change currencies
B. The interbank market is often called the cash or spot market
What are the 8 primary central banks?
- ECB (European Central Bank)
- Federal Reserve Bank (USA)
- BOE (Bank of England)
- SNB (Swiss National Bank)
- BOJ (Bank of Japan)
- BOC (Bank of Canada)
- RBA (Reserve Bank of Australia)
- RBNZ (Reserve Bank of New Zealand)
What are the most actively traded pairs in the Forex market?
- EUR/ USD
- GBP/ USD
- USD/ JPY
- USD/ CHF
Please define: retracement
It’s a temporary reversal in the direction of a stock’s price that goes against the prevailing trend; it’s also known as a correction (or a period of rest before the trend continues in the original direction)
Please define: consolidation
the movement of an asset’s price within a well-defined pattern or barrier of trading levels; lengthy periods are known as a “base”
Please define: pip
the smallest price change that any given exchange rate can make; equates to 1/100 of one percent [i.e., basis point]
Please define: lot
refers to the size of the trade that a particular trader or investor is making; to reduce risk, one should reduce the lot (the smallest lot available is a micro lot: 1 K units of currency)
