EZ SQUARE

Backwardation is a situation in which the current futures price is lower than the price of the underlying asset. Backwardation is also sometimes called a situation where the futures price with a later expiration date is lower than the futures price with an earlier date.

Balance/account balance

The total financial result of all the completed transactions and operations of the deposit/withdrawal of funds from a trading account.

Bank of Canada (BOC)

The Bank of Canada is the central bank of Canada.

Bank of England (BOE)

The Bank of England is the central bank of the United Kingdom.

Bank of Japan (BOJ)

The Bank of Japan is the central bank of Japan.

Bar chart

This type of chart contains four values of an asset price for each time interval: high, low, opening, and closing prices. High and low prices are reflected by a vertical line, while the opening and closing prices - by horizontal lines. The line on the left of the bar is the opening price, while the line on the right of the bar is the closing price.

Base currency

The first currency in a currency pair in the Forex market.

Base Interest Rate

There are interest rates that banks set to determine the key interest rate for different types of lending. Their size depends on the supply and demand for credit resources, market interest rates and other factors. Initially, the base interest rate is set by the central bank of the country; at this rate, all other banks can borrow from the central bank. The base interest rate set by the central bank has a direct impact on the value of said country’s currency. Therefore, tracking changes in this indicator can help the trader in making trades in forex.

Basis

Basis is the difference in price between the futures price and the price of the underlying asset. The basis can be both positive and negative. By the time the contract expires, the basis will be zero, as futures and spot prices will be equal.

Basis point

A Basis point is a unit of measurement which is equal to one hundredth of a percent. When interest rates are calculated it is necessary to remove all ambiguity: in this case the unit becomes the base point. For example, an increase of the base rate from 7% to 7.2% would imply a 20 base point change.

Bear Market

A market, which is characterized by falling prices (quotes).

Bearish Rectangle

The rectangle graphical pattern serves to confirm the direction of the existing trend. The bearish rectangle is formed in a downtrend and indicates high probability for the further decrease in the asset price.

Beneficiary

In the financial sphere, the term “beneficiary” is often used. It means the recipient of the benefit: in monetary or other terms. The beneficiary is a legal entity or an individual making a profit / profit in accordance with debt and other financial documents.

Bid Price

The bid price is the price at which one sells any financial instrument.

Bid/Ask Spread

The difference between the Bid and Ask prices.

Big Board

Big Board is trader slang for the New York stock exchange. The exchange is the largest in the world in terms of the total cost of companies’ shares which from part of the listing. At this exchange the largest amount of stocks in the world are traded and over 3,000 corporations are quoted.

Bill Williams Chaos Theory

Bill Williams developed his unique theory combining trading psychology with the Chaos theory and their impact on markets.

Binary options

Binary options are a relatively new financial instrument which differs in that they have a fixed cost and that risks and potential profit are known in advance. Binary options are considered a good instrument for novice traders since the possible profit is known before entering into a trade and a position can be opened by simply choosing which direction the price is believed to be heading.

Bollinger Bands Indicator

The Bollinger Bands indicator reflects the current market volatility changes, confirms direction, warns about the opportunities of trend continuation or trend end, consolidation periods, increasing volatility for breakouts, as well as indicates the local highs and lows.

Break

Break is used to signify the sharp rise and fall of prices. This is an indicator of monetary imbalances, when sellers are significantly stronger than buyers of a particular financial instrument.

Bretton Woods Agreement

In 1944 in Bretton Woods in the USA, members of the United Nations signed an agreement to establish a currency exchange rate system for economically developed nations. The US dollar became the reserve currency since, following the end of World War Two, the USA could guarantee the exchange of their currency for a fixed amount of gold. To support a system of international payments, the IMF (International Monetary Fund) was created. However, the Bretton Woods agreement did not take into account the fact that countries would seek to accumulate as big a dollar reserve as possible. This meant that the US could be put in a situation where it couldn’t cover the reserves using its gold. When Western Germany and France began to exchange their dollar reserves for gold in 1971 the US abandoned the obligations that they had assumed since 1944.

Broker

A company or an individual which acts as an intermediary in giving access to markets and organizing trading financial instruments for its clients.

Bull

A trader or an investor who acts with the belief that the market and prices on a certain financial instrument (currency pair, stock, etc.) will rise. Bull opens buy trades (long position).

Bullish Rectangle

The rectangle graphical pattern serves to confirm the direction of an existing trend. The bullish rectangle is formed in an uptrend and indicates high probability of continuation of the asset price growth.

Backwardation