Terminology forex : R

Rally

An increase of price after a period of decline.

 

 

 

 

 

  Rate

The price of one currency in terms of another currency.

 

 

 

 

 

 

 

Raw Materials Price Index ( RMPI )

Release Schedule : 8:30AM ( EST ) roughly 30 days after the reporting month
Source of Report : Statistics Canada
Web Address : http://www.statcan.ca/start.html
Address of Release : http://www.statcan.ca/english/Release/index.htm

 

 

 

 

 

  Rectangles

A Rectangle is a method of pattern trading based on a continuation pattern. Continuation patterns also include Ascending Triangles, Descending Triangles, Wedges, Flags, Symmetrical Triangles and Pennants and are essentially technical patterns that are expected to lead to the continuation of an existing trend. Continuation patterns are considered a powerful trading tool as they usually result in extremely low risk trading opportunities and spectacular returns.The rectangle pattern generally reflects a consolidation period, usually of four to six weeks duration. This pattern regularly features well defined support and resistance levels, which are to be distinguished by horizontal lines.Upon breakout the Rectangle is most likely to continue the existing trend, however a failure to do so will deflect the rectangle from a continuation pattern to a reversal pattern leading to a downward trend, this is a relatively easy pattern to spot however as it will show in a minor sideways trend.If the rectangle continues to follow an uptrend, with breakout occurring on the upside then the rectangle is referred to as bullish, is the trend is reversed with the breakout occurring on a downtrend, or continuing in the original trend then the rectangle will be called bearish.

 

 

 

 

 

 

 

 

  Relative Strength Index

Relative Strength Index, sometimes shortened to RSI, is a price oscillator used in technical analysis to show changes in the strength of prices.
he Relative Strength Index is considered a popular tool and is a relatively easy one to interpret. This price following oscillator is depicted as a basic graph and ranges from zero to one hundred.
By far one of the most popular methods of analyzing the Relative Strength Index is to look for an area on the graph that shows a divergence away from the current trend, in particular seeking an area of divergence in which the currency price seems to be aiming to create a new high, but where the Relative Strength Index has as yet failed to reach a level on par with it’s previous price high.
This sort of divergence can often be considered a good indication of an impending price reversal to the current trend and when the RSI does reverse and falls in a down trend that extends below its most recent low, the RSI could then have been considered to have completed what is known as a ‘failure swing’. Such a swing is generally considered to be a confirmation of an impending reversal in the price of the currency in question.

 

 

 

 

 

 

 

 

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That’s not possible, look again. The remote possiblity always exists that we have somehow missed a term or subject that just needs to be covered in Forexpedia. If this is the case, and you have nothing to offer on the subject/term, feel free to make a request below. But wouldn’t it be so cool to start your own article? We definitely want the information to be relevent and concise, but remember, Forexpedia is community driven. There is help if you need it.What that really means is if your stuff is just terrible, you’ll have people to back it up and make it better. Ummm, yea, that’s what that means.Put your request here! It’s easy:Register for a FREE Babypips.com account Log into Babypips.com and then head over to the Forexpedia Main PageUse the Quick Links section to come back to this page, Request for Existence Click the edit tab above, and make your requestThat’s it!And don’t forget to sign your name with the request! Add this to the end of your request: ~~~~. That gets you this: Forexgump 10:07, 8 January 2007 ( CST )Start the list below this line. Please do not edit anything above this line.[example] History of the US Dollar Bill –Forexgump 23:11, 6 November 2006 ( EST )[example] Your article on Gastro-intestinal Gravitational Physics is lacking… –Forexgump[example] What is a Stop Loss? –Forexgump 23:11, 6 November 2006 ( EST )They keep talking about buying or selling on the fix, profit taking after the fix. Euro selling is fix related? Just who is doing these fixes and why are they doing them? What exactly is a fix anyway? [User: Scalplady]Hey Scalpady – You would be better served in the BabyPips Forums with your question. Hop over to the Forums and start a new thread! Watch the feedback roll in! -ForexgumpWho’s next?There are some basic terms used throughout the sit that would be good to explain for completeness: convergence, divergence, consolidation, etc Daraknor 09:14, 14 April 2007 ( CDT )Term Defined -Consolidation definedTerm Defined -Divergence defined Yes, I have only been trading a minute. However, I feel that I want to use the Fibonacci Fan method. But I like to use “entry orders” to do so. What Brokerage companies execute “entry order” efficiently? Many will tell you how to set them but generally don’t execute the order ever or until afer the fact and the market has evolved and you have a different set of variables. -goingforex GoingForex, thanks for the question. You will be better served researching the forums for an answer to your question, and you might even consider starting your own thread. Although creating the term “entry order” is a possibility, I believe you are looking for a more timely response. Thanks! – Forexgump 13:31, 23 April 2007 ( CDT )
What do the terms hawkish and dovish mean? marksfxTerms Defined – hawkish and dovish. Enjoy!–Forexgump 06:08, 1 April 2009 ( UTC )
Shadows – Can anyone tell me what this term means? I have seen it used several times and can not find a definition of it. Thank you.
Term Defined – Shadows defined. PhreakNIK 22:34, 28 July 2009 ( UTC )draw down Term Defined – Drawdown defined. Pipstradamus 18:41, 18 May 2010 ( UTC )Ddinnov- Please can you explain a bit about “Confluence”?Guvernor – “Comdoll”

 

 

 

 

 

 

 

 

 

 

 

Reserve Bank of Australia

The Reserve Bank of Australia’s ( RBA ) main responsibility is monetary policy. Policy decisions are made by the Reserve Bank Board, with the objective of achieving low and stable inflation over the medium term.The Reserve Bank of Australia is the institution responsible for managing Australian currency policies. The Reserve Bank was founded in 1911, but achieved its present form in 1960 when the bank’s function shifted toward regulation and away from commercial banking.The Reserve Bank of Australia, like many central banks, has the power to increase or decrease the money supply in Australia. Unlike the US Federal Reserve, the Reserve Bank of Australia prints and destroys money directly, rather than working with other government institutions. The Reserve Bank also buys and sells treasury bonds to primary traders, which raises money for government operations as well as pumping money into the economy ( or removing an excess of money ) at critical junctures. The Reserve Bank also has the power to regulate nationwide interest rates, as well as to adjust the asset holdings of individual commercial banks, meaning that this Reserve Bank plays a heavy role in Australian financial affairs.
The Reserve Bank of Australia also publishes a number of reports on both a monthly and an annual basis. Traders in the Australian currency market consider these reports extremely accurate and useful in developing an idea of the state of the Australian economy at any point in time.Since trade balances depend on a nation’s money supply, the Reserve Bank of Australia’s actions play a large role in determining the behavior of the Australian currency market, a fact which many foreign exchange traders take advantage of by closely watching the Reserve Bank’s actions and taking appropriate actions.

 

 

 

 

 

 

 

 

 

 

 

  Reserve Requirement Ratio ( RRR )

The reserve requirement ratio ( RRR ) or cash reserve ratio ( CRR ) is the percentage of customer deposits and other liquid assets that commercial banks must store, within it’s own institution or with the central bank.The RRR is set by the central bank to ensure that commercial banks have enough assets to pay its depositors in case of unusually high withdrawals.
Some central banks use RRRs for monetary policy. Decreasing the RRR tends to stimulate economic activity as banks have more assets to loan out to borrowers.
Alternatively, increasing the RRR decreases the money available to potential borrowers, which could lead to a decline in economic activity and higher purchasing power of the money circulating in markets.

 

 

 

 

 

 

 

 

  Retail Sales

Definition:
An estimate of the total sales of goods by all retail establishments in the U.S. ( Sales of services are not included ) for month prior to the release of the report. Data are presented in nominal, or current, dollars, meaning they are not adjusted for inflation. However, the data are adjusted for seasonal, holiday, and trading-day differences between the months of the year.
Background
The report is generated from the receipts provided by participating randomly-sampled retailers. The report is expressed both in millions of dollars and as a percentage change from previous months, and data is broken down into a wide variety of retailer categories. Sales are categorized by type of establishment, not by type of good. Additionally, the report is usually made available with automotive sales excluded from estimates of total spending, since automotive sales vary widely from month to month and tend to skew data.
The use of the Retail Sales report in trading is clear, since the report provides extremely specific data about which industries and commodities consumers are spending most of their money on. However, one major drawback of the report is that it only reflects sale prices without taking into account inflation within the prices of certain volatile industries ( gas and other energies in particular. ) The report also doesn’t provide any data on service industry sales, making the Personal Income and Spending report more useful in this area. Still, traders consider the Retail Sales report one of the most generally useful of the economic indicators, with a wide range of applications for various asset markets.
Importance
Personal consumption expenditures ( PCE ) represent roughly two-thirds of GDP. By monitoring retail sales, policy makers are able to make an assessment of the likely growth of PCE for the current and future quarters.
Source
U.S. Department of Commerce, Bureau of the Census
Frequency
Monthly
Availbility
Advance estimate released during the second week of the month for the immediately preceding month.

 

 

 

 

 

 

 

 

 

 

  Retail Sales – Euro-zone

Release schedule : 9:00 ( GMT ); monthly, one month following the reporting month
Revisions schedule : Data is revised monthly to adjust for previously unavailable data from some member countries
Source of report : Eurostat
Web Adress : http://ec.europa.eu/eurostat
Address of release : http://ec.europa.eu/comm/eurostat
Long-term indicators > Industry, Trade and Services > European Business – Selected indicators for all activities ( NACE divisions ) > Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods > Retail trade, except of motor vehicles and motorcycles; repair of personal and household goods

 

 

 

 

 

 

 

  Retail Sales – United Kingdom

Revision schedule : Quarterly
Source of report : U.K. Office of National Statistics
Web Address : http://www.statistics.gov.uk/
Address of release : http://www.statistics.gov.uk/instantfigures.asp

 

 

 

 

 

 

 

 

 

 

 

 

Retail Trade ( Retail Sales ) – New Zealand

Release Schedule : 22:45 ( GMT ); monthly/quarterly, 2 weeks after each reporting period, with a more in-depth report released every Quarter
Source of Report : Statistics New Zealand
Web Address : http://www.stats.govt.nz/default.htm
Address of Release http://www.stats.govt.nz/products-and-services/info-releases/rts-info-releases.htm

 

 

 

 

 

 

Reverse Repo

A reverse repurchase agreement involves the purchase of securities with the promise to sell them at a higher price at a future date. For the buyer of the securities, it is a way to lend money and get paid with interest in the future. The securities serve as collateral for the loan. Conversely, for the seller of the securities, the reverse repo is a way to borrow money and pay back with interest later on.
Such agreement is a financial instrument which is often used to raise short-term capital. Government securities are often used as collateral for reverse repo agreements.
Central banks typically make use of reverse repo agreements to drain the reserves in the banking system before adding them back later on. For instance, the Fed uses a reverse repo to sell securities in exchange for US dollars in order to mop up the excess liquidity in the markets. In this case, reverse repos could serve as an alternative to tightening monetary policies such as raising interest rates or the reserve requirement.

 

 

 

 

 

 

 

 

 

 

 

  RICS House Price Balance – United Kingdom

Release schedule : 23:30 ( GMT ); Monthly, in the middle of the following month.
Revision schedule : Few or no revisions
Source of report : Royal Institution of Chartered Surveyors ( RICS )
Web Address : http://www.rics.org/
Address of release: http://www.rics.org/Property/Residentialproperty/Residentialpropertymarket/market_surveys.htm

 

 

 

 

 

 

 

 

 

 

 

 

  Rising Wedge

A rising wedge is a common chart pattern in technical analysis. The rising wedge is formed by drawing two ascending trendlines, one representing high prices and one representing low prices for an asset. The slope of the trendline representing the highs is lower than the slope of the trendline representing the lows, indicating that low prices are increasing more rapidly than high prices are. The resulting shape forms a gradually narrowing wedge, giving this pattern its name.Because the trendlines that describe the rising wedge are ascending, rising wedges are occasionally falsely thought of as continuation patterns for an overall upward trend. The seeming upward trend in asset prices invites bullish traders to begin investing in the asset, while bearish traders continue selling off their holdings and maintaining the strong upper line of resistance. ( This is reflected in the smaller slope of the upper trendline in the pattern. ) Since prices refuse to break the upper level of resistance, buying pressure gradually decreases, the lower level of support is broken, and the asset usually enters a strong downward trend. Thus a rising wedge should be taken as a strong sell signal and an indication that a market reversal is imminent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk appetite

Risk appetite is a gauge of how “risk-hungry” traders are. If risk sentiment is up and times are good, risk appetite picks up and trader are more willing to invest in higher-yielding and/or potentially more volatile assets.In the forex market, this normally means that traders are more willing to invest in currencies that have higher interest rates ( i.e. Australian dollar, British pound ), equities and commodities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Capital

Amount of money a person is willing to lose.

 

 

 

 

 

 

 

 

 

Rollover

Rollover is the interest paid or earned by a trader for holding a position overnight. Since every currency trade involves borrowing one currency to buy another, interest rollover charges are part of FX trading. Interest is paid on the currency that is borrowed, and earned on the one that is bought.For example, let’s say you have a long AUDJPY position. Assuming the AUD has an interest rate of 4.50% while the JPY has an interest rate of 0.10%, you will earn interest on the currency you bought and pay interest on the currency you borrowed. In the case given above, you will be earning 4.50% interest on the AUD minus the 0.10% interest of the JPY.Take note, however, that rollover only happens on positions that are held beyond 5 pm EST. In addition, many retail brokers adjust their rollover rates on a variety of factors like account leverage and interbank lending rates. It would be best to check with your broker for information regarding rollover.

 

 

 

 

 

 

 

 

Round trip

The buying and selling of a specified amount of currency.

 

 

 

 

 

 

 

 

 

 

 

 

Rwanda Rwanda Francs

The currency of Rwanda. Currency code ( RWF )

 

 

 

 

 

 

 

 

 

 

 

 

 

Range

The difference of the highest and lowest price in a given trading period.

 

 

 

 

 

 

 

 

 

  Rate of Change

Rate of change ( ROC ) is an indicator used in technical analysis. The basic logic behind ROC is the same logic that underlies momentum: the change in price levels over time, or the slope of the trendline. However, ROC differs from momentum in the focus traders place on the time period used to calculate ROC, while the value of momentum depends much more on the trendline chosen by the technical analyst than on the time period used.ROC is calculated by taking the current closing price, dividing it by the closing price some x number of periods ago, and multiplying the difference by 100. The resulting value for ROC is expressed as a percentage. The typical value of x is ten, although different results can be obtained by using greater or lesser values.Of special concern to foreign exchange traders is the lack of closing prices in the twenty-four hour forex market. Because of this, the closing price used in calculating ROC is commonly taken to be the closing price of the New York Stock Exchange, as once the NYSE closes, the volume of trading tends to drop off.ROC can be used to generate buy and sell signals in much the same way as momentum. If ROC is rising, short-term buying pressure is indicated; if ROC is falling, short-term selling pressure is indicated.

 

 

 

 

 

 

 

 

 

 

 

 

Recession

The newspaper definition of a recession is when the GDP rate declines by 2 or more consecutive quarters. The problem with this definition is that it makes it more difficult to say whether the economy is in a recession or not. This definition does not take into account other macroeconomic factors like unemployment.Economists say that other factors like industrial production, consumer confidence and capacity utilization should be taken into account when stating whether a recession is in place. Declines in these macroeconomic factors help give a stronger signal that a recession in place.The key economic variable to look at is the GDP rate, as it is a measure of the economic activity of the entire economy. If there is a continuous decline in GDP, it is a strong signal that a recession is in place. Other macroeconomic variables can be looked to support this claim.

 

 

 

 

 

 

 

 

 

 

  Referendum

The process of asking the general public to vote on a political decision. It is also known as a “plebiscite,” or a vote on a ballot question.

 

 

 

 

 

 

 

 

 

 

 

Relative Vigor Index

Definition:
Relative Vigor Index ( RVI ) is a technical indicator used to establish the level of energy, or vigor within the current market. When the market is up ( bull ), the closing price is generally of a higher level than the opening price of the market, with the opposite being true for a down ( bear ) market. By using the Relative Vigor Index to analyze the movements in price level between the open and close of the market, and by comparing this to results gained during subsequent and preceding days, we are able to ascertain the overall vigor of the market as so to better predict the outcome of certain trends.
RVI = ( Close-Open ) / ( High-Low )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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  Reserve Bank of New Zealand

The Reserve Bank of New Zealand is New Zealand’s central bank, and its overall purpose is to maintain the stability and efficiency of the financial system.
The Reserve Bank of New Zealand is the institution responsible for managing New Zealand’s money supply and for preventing inflation or other severe economic problems within New Zealand. The Reserve Bank, established in 1939, differs from other major reserve banks ( including the US Federal Reserve ) in that it is entirely government-owned and centralized, and the Reserve Bank thus takes a much stronger hand than non-centralized reserve banks in regulating monetary activities.The Reserve Bank is directly and solely responsible for printing and destroying New Zealand currency. Since the Reserve Bank is willing to accept even non-legal tender as viable assets ( including severely damaged currency or coins and bills that have been withdrawn from active circulation ), this makes the New Zealand money supply slightly more stable than in some other countries, albeit harder to track precisely.The Reserve Bank also ensures a high measure of control over other New Zealand banks by requiring a quarterly disclosure statement from all banks operating in the country, giving the institution information about the financial health of individual banks as well as detailed data about each bank’s activities. The Reserve Bank also sets the Official Cash Rate ( OCR ), which can be adjusted at eight regular intervals throughout the year, as well as at unscheduled times in the event of an emergency. Due to the Reserve Bank’s policy of lending unlimited amounts of money to individual New Zealand banks at above or below the OCR, no bank can charge an interest rate higher than the OCR without being undercut by Reserve Bank funds, making the OCR an unusually stable interest rate nationwide.

 

 

 

 

 

 

 

 

 

 

 

  Resistance

An estimated price level at which people will sell.

 

 

 

 

 

 

 

 

 

 

 

 

Retail Sales – Canada

Release Schedule : Released mid-month at 8:30AM Eastern Time
Revision Schedule: Monthly ( with the next report )
Source of Report : Statistics Canada
Web Address : http://www.statcan.ca/start.html
Address of Release : http://www.statcan.ca/english/Release/index.htm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Retail Sales – Japan

Release schedule : 23:50 ( GMT ); monthly, one month after the reporting period
Revisions schedule : Little or no revisions
Source of report : Ministry of Economy, Trade and Industry ( Japan )
Web Address : http://www.meti.go.jp/english/index.html
Address of release : http://www.meti.go.jp/english/statistics/index.html

 

 

 

 

 

 

 

 

 

 

 

 

Revaluation

An increase in price due to central bank activity.

 

 

 

 

 

 

 

 

 

 

 

 

  Reward-to-risk ratio

The reward-to-risk ratio measures a trade’s expected returns against its predetermined risk of loss.
The ratio is computed by dividing the profit that a trade is expected to yield by the loss that the trade may incur.
For instance, let’s say that trader ABC expects to make $100 by buying EUR/USD. If he places his stop loss in such a way that he stands to lose just $25, the trade’s reward to risk ratio is 4:1 ( 100 / 25 ).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Rightmove House Prices Index

Definition: The Rightmove house prices index measures the change in prices of homes for sale based on sellers’ asking prices. Investors use it to gauge the health of the housing industry as rising house prices often indicates a healthy demand for homes.Because it is based on asking prices and not actual selling prices, it tends to have a relatively weaker impact on the markets compared to other housing prices reports.
fequency: Monthly
Availability: It is usually published three weeks into the current month and is the U.K.’s earliest report on housing inflation data.
Source: Rightmove ( http://www.rightmove.co.uk/ )

 

 

 

 

 

 

 

 

 

  Risk

A chance in which an effect will occur. Mainly used as a negative effect.

 

 

 

 

 

 

 

 

 

 

  Risk aversion

Risk aversion refers to when traders unload their positions in higher-yielding assets and move their funds in favor of safe-haven currencies. This normally happens in times of uncertainty and high volatility.In the forex market, currencies who have relatively higher interest rates are regarded as higher-yielding currencies. These are seen as “riskier” assets. Thus, in times of risk aversion, traders tend to unwind their positions in these currencies.In turn, traders end up parking their assets in less risky, “safer” currencies, like the U.S. dollar or the Japanese yen. These currencies are regarded to be safer because of the size of their capital markets and liquidity.

 

 

 

 

 

 

 

 

 

 

 

 

Risk management

The process and ability to limit and eliminate various types of risk.

 

 

 

 

 

 

 

 

 

  Romanian Lei

The currency of Romania. Currency code ( ROL )

 

 

 

 

 

 

 

 

 

 

  Russian Rubles

The currency of Russia. Currency code ( RUR )

 

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