Page 177 - Ultimate Guide to Currency Trading

Capital gains
When a currency is sold at a higher price than was paid for it during the course of a trade.

Capital preservation
A trading and investment goal of keeping assets safe; not seeking capital gains.

Carry trades
A Forex trade of selling a low-interest rate currency short and investing the proceeds in a high-
interest rate currency. See interest rate differential.

Cash-flow statement
Cash-flow statements are comprised of the money generated from operations (trading) minus
money expenses, plus money deposited in your account.

Central bank
A country's bank of banks; often considered the lender of last resort within that particular
economic zone.

Central banking stance
The forward looking direction that a central bank will usually hint at in a press conference; the
unofficial economic analysis of a central bank regarding its home economic conditions.

Commodity currency
A currency that is from a country that produces commodities as its main source of exports:
NZD, AUD, CAD, and ZAR are some examples.

Consumer Price Index (CPI)
A periodic measurement of a predetermined basket of goods. The elements of the goods are
measured against the prices at the prior term, and any differences are noted. The result is a
gauge of how much more it costs for basic living expenses period to period.

Correction
When a market reverses its direction suddenly and quickly after a big run-up in value.

Counter currency
The second currency listing in a currency pair quote. The currency the base currency is divided
into to get a trading price.

Currency crosses (or cross pairs)
Refers to pairs that are made up of either minor currencies or other infrequently traded
groups—a currency pair that does not include the big four.

Currency trading
A form of trading where you buy and sell the money of the different countries of the world.
The investment vehicles are digital money. (Also called FX trading and Forex trading.)