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F

Falling Three Methods Candlestick Pattern

This Japanese Candlestick chart formation shows the market is pausing before continuing a downtrend. In technical parlance this is described as a bearish continuation pattern. A long black body is followed by three small body days, forming a short uptrend, however each is fully contained within the range of the high and low of the first day. This suggests declining confidence on the part of the bulls. On the fifth day, the sellers dominate and the market closes at a new low.

Fast market

The rapid movement of prices or rates in a market caused by disequilibria in supply and demand conditions from buyers and/or sellers. In such circumstances rates or prices may not be readily available to clients until orderly markets resume.

Fed

The United States Federal Reserve Bank.

Fed Funds

Cash balances held by banks with their local Federal Reserve Bank.

Fed Fund Rate

The short term (overnight) rate pegged by the Federal Reserve Bank used to conduct monetary policy and affect changes in the money supply that causes changes in the level of activity in the United States economy.

Federal Deposit Insurance Corporation (FDIC)

The regulatory agency responsible for administering bank depository insurance in the US.

Federal Open Market Committee

Also known as the FOMC. The body of individuals that decide the course of monetary policy that will be conducted in United States. The FOMC is directly responsible for pegging the Federal Funds rate and the Discount Rate. Both rates are influential in controlling the levels of money supply growth and the levels of economic activity in the United States.

Federal Reserve Board

The board of the Federal Reserve System, appointed by the US President for 14 year terms, one of whom is appointed for four years as chairman.

Federal Reserve System

The central banking system of the US comprising 12 Federal Reserve Banks controlling 12 districts under the Federal Reserve Board. Membership of the Fed is compulsory for banks chartered by the Comptroller of Currency and optional for state chartered banks.

Fibonacci Arcs

Fibonacci Arcs are created on a chart by first drawing a trendline between two extreme points, a trough and opposing peak. Three arcs are generated that are centered on the second extreme point and intersect the trendline at Fibonacci Levels, usually of 38.2%, 50% and 61.8% of the distance between a price maximum and minimum. The interpretation of Fibonacci Arcs involves looking for support and resistance as prices approach the arcs. Fibonacci Arcs and Fibonacci Fan Lines are sometimes used together to anticipate support and resistance at the points where the Fibonacci studies intersect.

Fibonacci Fans

Fibonacci Fan Lines are displayed by first drawing a trendline between two extreme points, a high and low. An invisible vertical line is drawn through the second extreme point. Three lines are then drawn from the first extreme point (the leftmost point) passing through the invisible vertical line with their slopes at the Fibonacci levels, usually 38.2%, 50.0% and 61.8%. These lines indicate areas of support and resistance.

Fibonacci Numbers

A number sequence discovered by a thirteenth century Italian mathematician Leonardo Fibonacci (ca 1170-1250), who introduced Arabic numbers to Europe, in which the sum of any two consecutive numbers equals the next highest number - i.e., following this sequence: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55 and so on. The ratio of any number to its next highest number approaches 0.618 after the first four numbers. Fibonacci numbers are said to be based upon observations of the Great Pyramid of Gizeh in Egypt by Fibonacci. These numbers are used by technical analysts to determine price objectives from percentage retracements.

Fibonacci Retracements

Fibonacci Retracements are displayed by locating two extreme points, a trough and opposing peak. Five lines are drawn: 100% (the high on the chart), the second at 61.8%, the third at 50%, the fourth at 38.2%, and the last one at 0% (the low on the chart). These price levels often correspond to areas of and resistance.

Fibonacci Time Zones

Fibonacci time zones are composed by dividing a chart with vertical lines spaced apart in a ratio adhering to the Fibonacci number sequence (1, 1, 2, 3, 5, 8, 13, etc.). The interpretation of Fibonacci Time Zones involves looking for significant price movement near the vertical lines. Also known as Fibonacci Time Series.

Fictitious Trading

Wash trading, bucketing, cross trading, or other schemes which give the appearance of trading but actually no bona fide, competitive trade has occurred.

Fill or Filled

A deal that has been executed on behalf of a Customer's Account given a Customer's Order. Once filled, an Order cannot be canceled, amended or waived by Customer.


Fill or Kill Order (FOK)

An order that demands immediate execution or cancellation. Typically involving a designation, added to an order, instructing the broker to offer or bid (as the case may be) one time only; if the order is not filled immediately, it is then automatically cancelled.

Firm quotation

A verbal price given in response to a request for a firm rate at which the quoting party is willing to execute a deal for a reasonable amount for spot settlement.

Final Settlement Price

The price at which a cash-settled futures contract is settled at maturity, pursuant to a procedure specified by the exchange.

First In First Out (FIFO)

Open positions are closed according to the FIFO accounting rule. All positions opened within a particular currency pair are liquidated in the order in which they were originally opened.

Fiscal Policy

Use of taxation as a tool in implementing monetary policy.

Fixed dates

The monthly calendar dates similar to the spot. There are two exceptions. For detailed description see value dates.

Fixed exchange rate

Official rate set by monetary authorities. Often the fixed exchange rate permits fluctuation within a band.

Fixed Income Security

A security whose nominal (or current dollar) yield is fixed or determined with certainty at the time of purchase, typically a debt security.

Fixing

A method of determining rates by normally finding a rate that balances buyers to sellers. Such a process occurs either once or twice daily at defined times. Used by some currencies particularly for establishing tourist rates.

Flat/square

Dealer jargon used to describe a position that has been completely reversed, e.g. you bought $500,000 then sold $500,000, thereby creating a neutral (flat) position.

Floating exchange rate

An exchange rate where the value is determined by market forces. Even floating currencies are subject to intervention by the monetary authorities. When such activity is frequent the float is known as a dirty float.

FOMC

Federal Open Market Committee, the committee that sets money supply targets in the US which tend to be implemented through Fed Fund interest rates etc.

Foreign Exchange

Trading in foreign currency.

Forex

Refers to the OTC market for foreign exchange transactions. Also called the foreign exchange market.

Forward

The pre-specified exchange rate for a foreign exchange contract settling at some agreed future date, based upon the interest rate differential between the two currencies involved.

Forward Deal

A deal with a value date greater than the spot value date.

Forward Points

The pips added to or subtracted from the current exchange rate to calculate a forward price.

Forward Rate

Forward rates are quoted in terms of forward points, which represents the difference between the forward and spot rates. In order to obtain the forward rate from the actual exchange rate the forward points are either added or subtracted from the exchange rate.

The decision to subtract or add points is determined by the differential between the deposit rates for both currencies concerned in the transaction. The base currency with the higher interest rate is said to be at a discount to the lower interest rate quoted currency in the forward market. Therefore, the forward points are subtracted from the spot rate. Similarly, the lower interest rate base currency is said to be at a premium, and the forward points are added to the spot rate to obtain the forward rate.

Front Office

The activities carried out by the dealer , normal trading activities.

Fundamentals

The macro economic factors that are accepted as forming the foundation for the relative value of a currency, these include inflation, growth, trade balance, government deficit, and interest rates.
Fundamental Analysis

Analysis of economic and political information with the objective of determining future movements in a financial market.

Futures Contract

An obligation to exchange a good or instrument at a set price on a future date. The primary difference between a Future and a Forward is that Futures are typically traded over an exchange (Exchange- Traded Contacts - ETC), versus forwards, which are considered Over The Counter (OTC) contracts. An OTC is any contract NOT traded on an exchange.

FX

Foreign Exchange

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