Forex Trading Glossary – S
Saucer Pattern
A chart formation that shows a gradual decline then a gradual rise in prices with the resultant effect of price taking a saucer-shaped pattern. (Is also known as a rounded bottom)
Schaff Indicators
First developed by Doug Schaff in the 1990s, based on the FX-Strategy System, and used to create proprietary, back-tested trading signals.
Schaff TC Trigger ™
Provides a setup and trigger approach to create automated trade entry and exit signals, based on the Schaff TC™ Indicator.
Schaff TC/TC1 Trigger™
Provides a setup and trigger approach to create automated trade entry and exit signals, based on a combination of both the Schaff TC™ and Schaff TC1™ indicators.
Schaff TC1 ™ Indicator
An oscillator used to identify trend momentum.
Schaff Trend Cycle™ Indicator
An oscillator used to identify trend momentum.
Schaff Trend RSI™
This oscillator measures the strength of a trend against its own past performance.
Seasonality
A tendency for a change in market activity during a particular time of the year. Forex rates may be affected in this way by fiscal year end flows.
Segregated Accounts
A designated trading account, set up and monitored by a Forex brokerage firm in the name of the account holder.
Sell
Selling a base currency in terms of the pricing currency.
Sell Order
An order to sell a base currency in terms of a pricing currency.
Sell Limit Order
Placed above the current market price, a sell limit order attempts to sell a currency at a higher price.
“Selling the Rallies”
Describes the process of selling retracement rallies or pullbacks in a downtrend.
Sensitivity
The degree to which an indicator responds to the changes in the market. For example, the rate-of-change of the moving average in response to the movement of the market.
Forex Trading Glossary – S
Separating – Bullish and Bearish
(Candlestick Continuation Pattern)
The first day is a black/white long day followed by a white/black long day whose opening price is around the previous day’s open.
A black day occurs in an uptrend, suggesting potential for a corrective decline. However, the next day, when the market gaps higher and opens at around the open of the first day (towards the high), the subsequent rally to close even higher suggests that the uptrend is still firmly in place.
A white day occurs in an downtrend, suggesting potential for a corrective rally. However, the next day, when the market gaps lower and opens at around the open of the first day (towards the low), the subsequent decline to close even lower suggests that the downtrend is still firmly in place.
Services Account Balance
Income on services, such as investment fees, consulting, tourism, earnings on foreign investments, overseas insurance and banking fees.
Settlement
In the Interbank Market, the process of receiving one currency and paying out another.
Setup Bar
Occurs when one or both of FX-Strategy’s key indicators are rising from below the buyline, or falling from above the sell line.
Sharpe Ratio Method
A return/risk measure used to compare the performance of a trading system or a money manager, where:
E = Expected return
I = Risk-free interest rate
SD = Standard deviation of returns
Shooting Star and Inverted Hammer
(Candlestick Reversal Pattern)
The Inverted Hammer develops in a downtrend and after a long black day a new low is formed with the body at the lower end of the range. The upper shadow is normally twice the size of the body, or slightly less, and there is only a small lower shadow.
After the long black day price opens below the close of the previous day. Price then rallies but remains below the previous day’s close. This obviously displays the desire to sell rallies, to maintain the downtrend. On the next trading day, if price opens above the body of the Inverted Hammer, it implies short covering and further gains.
The Shooting Star develops in an uptrend and after a long white day price opens above the close, rallies to a new high but declines to leave a short body to the low of the day’s range. Normally the upper shadow is two or three times the size of the body and there is almost no upper shadow. An open on the following day below the short body would imply further losses.
Short
Trader has sold a currency with the expectation of buying it back cheaper.
Short Bars
(Candlestick)
A Short bar is one in which the body is shorter than average and where both body and shadows are short. A short bar represents little shift in the market’s perception of value. By themselves single bars do not necessarily provide any indications but will contribute to a group that represent a candlestick pattern.
Short Position
A position resulting from the sale of a base currency.
Short-term Trend
Represents fluctuations in an intermediate trend.
Side by Side – Bullish and Bearish
(Candlestick Continuation Pattern)
In a Bullish Side by Side pattern the first two days develop as a long white days where the second day creates a gap opening above the high of the first white day. The subsequent day is also a white day that has an opening price at, or around, the open of the second day and in spite of the lower open, continues to rally to close around the area of the close of the second day.
This rally after a potentially bearish open after the second day is a sign that there are still plenty of buyers to push price higher. A break above the high of the third day would confirm the move.
In a Bearish Side by Side pattern the first two days develop as a long black days where the second day creates a gap opening below the low of the first black day. The subsequent day is also a black day that has an opening price at, or around, the open of the second day and in spite of the higher open, continues to decline to close around the area of the close of the second day.
This decline after a potentially bullish open after the second day is a sign that there are still plenty of sellers to push price lower. A break below the low of the third day would confirm the move.
Sideways Market
A market characterized by prices staying in a narrow range.
Simple Moving Average
A series of averaged price data plotted on a currency chart. A simple moving average can be constructed by taking the closing prices for the number of sequential price bars that you want to analyse, adding those prices together and dividing that sum by the number of price bars. This technical indicator makes it easier to see the general direction of a trend underlying market action.
Skew
Data is either disproportionately to the right or to the left of the center point of the data.
Forex Trading Glossary – S
Smoothing
A mathematical technique that removes excess noise from the data. This is commonly performed by moving averages.
Spike
A sharp rise or fall in price over a relatively short period of time.
Spike Bottoms and Tops
Spike Bottoms and Tops are reversal patterns. They normally generate a reversal in trend. They are characterised by an extremely strong move at the end of a trend and a reversal that is normally more aggressive and lasting half the time of the final trending move.
In a Spike Bottom price will decline sharply over a number of periods, accompanied by significant bearish sentiment. The reversal will occur with a sudden and normally unexpected power that brings a retracement of some 50% to 61.8% within a much shorter period.
In a Spike Top price will rally sharply over a number of periods, accompanied by significant bullish sentiment. The reversal will occur with a sudden and normally unexpected power that brings a retracement of some 50% to 61.8% within a much shorter period.
Spinning Tops
(Candlestick Pattern)
Spinning Tops are bars with small bodies and a longer head and tail and represent periods when there is indecision between bulls and bears. By themselves single bars do not necessarily provide any indications but will contribute to a group that represent a candlestick pattern.
Spot Deal
An FX deal whereby one party will deliver a specified amount of a certain currency and receive a specified amount of another currency based on an agreed rate of exchange, within two business days; one day in the case of the Canadian Dollar.
Spot Price
The execution price of a currency to be delivered or settled two days hence, or in the case of the USD/CAD, in one day. A currency’s exchange rate.
Spread
a) The difference between the bid price and the ask price for a currency. b) A trade in which one of two related currencies/stocks/bonds/options is bought while the other is sold in order to exploit the differences in price-change between the two.
Stair-stepping
A descriptive method of the trend of the market where the market moves in an orderly fashion with minor counter trend movements.
Standard Deviation
Standard Deviation returns a value that represents how widely dispersed the individual price is away from the mean average (using the same parameters).
Standard Trading Lot
100,000 units of base currency.
Sterling
A market term for the Great Britain Pound currency.
Forex Trading Glossary – S
Stochastic
Originated by George Lane, this oscillator measures the position of a currency in relation to its own recent trading range. It uses a range of 0 percent to 100 for overbought and oversold conditions. There are multiple variations of the Stochastic, including fast and slow studies.
Stop Entry Order
Becomes a market order to enter a position once a specific price has traded. Used to enter a market once market momentum has proved itself.
Stop Loss
The trade is liquidated to halt any further decline in profit value.
Stop Loss Order
Becomes a market order to exit a position once a specific price has traded. Used to set an exit point for a losing trade.
Stop Order
Becomes a market order when the market reaches a predetermined price.
Stops
Orders used to enter or exit positions.
Buy stops are orders placed at a price above the current price of the market. (ie at a worse price than the current price) The order becomes a ‘buy at the market’ order if the market trades at or above the price of the stop order. Sell stops are orders that are placed with a price below the current price. (ie at a worse price than the current price) Sell-stop orders become ‘Sell at the market’ orders if the market trades at or below the price of the stop order.
Entry Stops are used when trading break-out strategies.
Exit Stops are used to liquidate trades to halt any further decline in profit value.
Strategy-Based Stops
A stop order that is placed at a price which would invalidate the reasons for taking a position.
Summary
A section of a trading screen that monitors position size, account value and current margin requirements.
Support
A price level that is below the market and has been tested at least once and held.
Support Level
– See Support
Forex Trading Glossary – S
Swing Chart
A charting technique where a straight line is drawn from a price extreme, such as a high, to the next price extreme, such as a low, using a set criteria such as percentage movement. For example, a 2% swing chart will only change if the price movement is 2% or greater. The resultant effect will resemble zig-zags drawn on the chart.
Swing High
Technical analyst, W.D. Gann described price peaks “swing highs”. A “swing high” is a price bar that is higher than a certain number (typically at least two) of price bars coming before and after it.
Swing Low
Technical analyst, W.D. Gann described price troughs “swing lows”. A “swing low” is a price bar that is lower than a certain number (typically at least two) of price bars coming before and after it.
Swissie
A market term for the Swiss Franc currency.
Forex Trading Glossary – S
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