Page 178 - Ultimate Guide to Currency Trading

Dollarization
When a country uses a major trading partner's currency as their own. Usually done in small
countries with close ties to one major trading partner.

Exotic pairs
Currencies that are from developing countries and have low trading volumes.

ETF
A basket of stock, bonds, or commercial paper that is traded intraday like a stock.

Euro proxies
The grouping of currencies that are closely related to the euro, but are managed by
independent central banks: SEK, CHF, NOK.

Exotic currencies
The grouping of currencies that are low volume and generally related to developing
economies.

Federal Reserve (the Fed)
The central bank of the United State of America. It independently sets the monetary policy of
the United States.

EMI
A currency system based upon credit and not upon a physical gold backing.

Fibonacci series
A system of using ratios to determine support and resistance lines in a Forex trading pair. Lines
are drawn with technical analysis software on a bar chart from the lowest trading point of a
time frame to the highest trading point of the same time frame.

Fiscal policy
The efforts of lawmakers to raise taxes and spend those funds in such a way as to spur growth
of the economy.

Floating rate system
The currency method of allowing world currencies to rise and fall in value according to market
supply and demand.

Forward-lag
If the Fed adjusts the money supply, the effects of the adjustment might not reach the average
household for several months. This delay is called forward-lag.

Free-cash flow
When a trading account produces money above and beyond its cash additions and expenses.