Forex encyclopedia

The market where spot (ie as per current rate) operations take place is called spot market. Operations of spot type are exactly those operations, which are the most popular on the Forex market. Quotes, which many people accustomed to in the window of trading terminal are called spot rate. It is accepted that settlement date for current conversion operations is the second business day after transaction is made. But it is only related to serious financial bodies. For common traders working on the Forex market via the Internet all current data is rendered in the terminal, trades are made within split seconds, therefore such criteria as settlement date cannot be accounted here. Also it is noteworthy that as compared with all other conversion operations, spot operations bear the highest risk. Forward conversion operations include forwards, futures, options and swaps. Listed instruments are also called derivatives. They were made in order to mitigate risks caused by unfavorable change of currency rate in the future.
Stochastic oscillator – is a technical indicator designed by the president of "Investment Educators" corporation George C. Lane in the end of 1950-s. Stochastic estimates market momentum and shows position of present price against price range (between High and Low) for a definite time period. It is measured in per cent from 0 to 100. According to George C. Lane, “doesn't follow price, it doesn't follow volume or anything like that. It follows the speed or the momentum of price. As a rule, the momentum changes direction before price.”
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