Forex Trading Glossary Q-R
Quote
A price quote that includes a bid and ask (offer) price.
Quote Currency (Pricing Currency)
The second currency in a currency pair. The quote currency is used to price the first or base currency.
Forex Trading Glossary Q-R
R squared
The coefficient of determination. The percentage of variation in the dependent variable that is explained by the regression equation.
Random Walk
An academic theory stating there is no correlation between prices from one day to the next and that prices will act unpredictably.
Range
The distance between the high and the low of a price bar.
Realized Profit and Loss
The profit or loss resulting from closed trades.
Reaction High
Price high of a retracement or correction within a downtrend.
Reaction Low
Low price of a retracement or correction within an uptrend.
Relative Strength Index (RSI)
Developed by Welles Wilder to improve upon the classic momentum oscillator. Used as an overbought/oversold indicator and to identify divergence.
Resistance
A price level where selling pressure has overcome buying pressure and prices turn downward. Commonly thought of as indicating oversold or overbought conditions.
Resistance Level
Usually identified on a chart by a price high or series of high points, above the market, where prices previously “met resistance” or “ran into resistance” and stopped rising.
Retracement
A price movement in the opposite direction of the primary trend. When prices climb or fall too far too fast they often retrace part of a trend move, or pause by trading sideways.
Retracement Zones
A combination of Dow and Fibonacci percentages to create zones where the market is likely to find support or meet resistance.
Reward-Risk Ratio
An estimate of the potential gain of a trade versus the potential loss.
Reversal Stop
Also known as stop and reverse. A stop order placed after a trade that reverses the current trading position, e.g., from long to short.
Reverse Trade Entry Signals
Once a position has been taken, a technical trading system may continue to generate new trade entry signals as market conditions change. A system may generate reverse trade entry signals before a stop loss order is executed. Such an order, if executed, closes the existing position and opens a new position in the opposite direction.
Rising and Falling Three
(Candlestick Continuation Pattern)
A Rising Three pattern is a bullish continuation pattern in an uptrend. The first bar develops as a long white bar. The following three bars are all short days but which fail to move below the low of the first day’s long white bar. On the fifth day a further long white bar develops that breaks above the high of the first long white day.
The failure of the correction that lasts over three days to retrace past the low of the first long white bar signals that the selling pressure is weak and that bulls can dominate once again.
A Falling Three pattern is a bearish continuation pattern in a downtrend. The first bar develops as a long black bar. The following three bars are all short days but which fail to move above the high of the first day’s long black bar. On the fifth day a further long black bar develops that breaks below the low of the first long black day.
The failure of the correction that lasts over three days to retrace past the high of the first long black bar signals that the buying pressure is weak and that bears can dominate once again.
Risk Capital
The amount of money a trader has in his/her trading account.
Risk Management
The process of implementing techniques to monitor and control risk. This includes risk limits on position size and capital, as well as knowing the types of orders, such as stop orders, that are used to limit losses.
Rollover
To establish a new position in a foreign currency by simultaneously liquidating the current position and establishing the same position at a value date in the future. Depending on the difference between the interest rates in one country compared to another (the so-called “interest differential”) traders can either earn interest on their trading positions over time or they will have to pay out interest. Day traders do not hold positions overnight, so they are not affected by rollover.
Rounded Bottom
A chart formation that shows a gradual decline then a gradual rise in prices with the resultant effect of price taking a saucer-shaped pattern. (Is also known as a Saucer Pattern)
RSI (Relative Strength Index)
Developed by Welles Wilder to improve upon the classic momentum oscillator. Used as an overbought/oversold indicator and to identify divergence.
Running Market
Market conditions where the prices are moving rapidly in one direction.
Forex Trading Glossary Q-R
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