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Forex Dictionary

Term Equivalent terms Definition
Day Order With stocks, a request from a customer to buy or sell a stock, that, if not cancelled or executed the day it is placed, expires automatically. For example, with a day order to buy a stock at $50 or better, and the stock never rises above $50, the order is not filled and expires as worthless. See also good-till-cancelled order.
Day Trade The opening and closing of a position in the same trading day, in order to profit from short-term changes in price.
Day trader A trader who makes many trades through a trading day, buying and selling positions in order to profit from short-term changes in prices. Duration of trades is a few minutes to a few hours, and rarely held overnight. Day trading is considered high risk because there is no guarantee that price will move in the short term desired direction, and transaction costs mount up with this more frequent trading style.
Day Trading Refers to positions which are opened and closed on the same trading day.
Deal Blotter A list of all the deals that were done in a trading day.
Deal Date The date a transaction is entered.
Dealer An individual who acts as a principal or counterpart to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a subsequent trade with another party. In contrast, a broker is an individual or firm that acts as an intermediary, putting together buyers and sellers for a fee or commission.
Dealing Desk Used loosely as the place where dealers facilitate pricing and executing of trades. In forex, the dealing desk has the connotation that trades must be pre-approved by human dealers working in the interests of the brokerage and thus more subject to manipulation than if auto-executed without a dealer.
Debt Monetization The ability of some central banks to print money and buy its government bonds, in order to keep the over-indebted government from defaulting. When the budget deficit continues to expand, and there is not enough willing lenders, a government can raise taxes (not popular), cut spending (also not popular), or it can just let its central bank print money to buy its bonds as part of its asset-buying program. Often inflation in one form or another, including local currency depreciation, is the result.
Deficit A negative balance of trade or payments. Outflow exceeds inflow, or expenditure exceeds income, or liabilities exceed assets, or losses exceed profits, or over a given period of time, usually a year. In a trade deficit, imports exceed exports; in a government deficit, spending exceeds revenue. Deficits add to one’s debts because they must be funded by borrowing.
Deflation Opposite of inflation (the increase in prices and goods and services), it is the decline in the price of goods and services. Mainstream economists consider any deflationary movement as economic hell, associating it with recessions and depressions, when in fact it is heaven for savers or those on fixed incomes. The currency gains value over time, and one can buy more with the saved dollar next year than today.
Delivery In the world of options, forwards and futures contracts, it is the transfer of a security or underlying asset to the buyer, though most of the time the delivery does not occur, as traders offset their positions with opposite contracts. In forex trading, there is no delivery of the actual currency, and instead, profits and losses are credited or debited from one's account balance.
Depreciation A fall in the value of a currency due to market forces.
Depth of Market The volume of buy and sell orders waiting to be transacted for a particular currency pair at a particular point in time.
Derivative A contract whose value is based on, “derived” from, an underlying security, future, or other physical instrument. For instance, a call option on APPLE (APPL) is a derivative security that obtains value from the changing value of the APPLE stock. A derivative can be either risky or not, depending on the type used and how it is used.
Deutsche Aktien Xchange DAX Germany's primary stock index, tracking the performance (dividends added in) of the 30 most actively traded stocks on the Frankfurt Stock Exchange.
Deutschmark D-Mark The former currency of Germany, introduced in 1948, it became one of the most important currencies in the world until it was replaced by the Euro when Germany joined the European Union in 1999 and ceased circulation in 2002.
Devaluation Often initiated by a government announcement, it is deliberate downward adjustment of a currency’s price relative to other currencies. Governments like Japan (and more forcibly, China) will act to deliberately devalue their own currencies to make their exports less expensive in foreign markets.
Discretionary Account An account where the customer gives someone else permission to make trading decisions for them.
Dollar Rate The amount of foreign currency quoted against one US Dollar.
Domestic Rates The interest rates that apply to deposits or borrowing of a particular foreign currency. These rates are similar to those offered within the foreign country to citizens who keep money in deposit accounts.
Drawdown The size of a drop in the value of an account from its peak to low over a given period. Maximum drawdown is the maximum drop from peak to low over the life of the account.
Durable Goods Order An economic indicator that marks the change in sales levels of products that have a lifespan of three years or more, such as home appliances, furniture, cars.
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