F

Factory Orders – Also known as Manufacturers’ Shipments, Inventories and Orders, this is a report on the monetary amount of new orders to factories for goods, both durable and nondurable. The factory orders report is considered to be more substantial and informative than the durable goods report. It is composed of four sections: new orders, unfilled orders, shipments and inventories.

Filtering Data – Traders accept the fact that not all of the financial data they have gathered may be reliable, so it must be filtered either by the trader or by the platform to ensure reliability.

Financial Institution – Any organization offering services for the purpose of investing, loaning or saving money.

First In First Out (FIFO) – FIFO is a standard accounting rule that is also used to determine the order in which open positions are closed. Positions within each currency pair are closed in the same order in which they were opened.

Flat – Also known as square, this term is used by dealers to describe a two or more positions that net out to zero, or a neutral position.

Forecast – A forecast is a prediction made on price movement after analysing past and current data from the market and relevant world events. Many forecasts predict movement and assign a percentage probability of the movement occurring.

Forecasting Service – Any service that professionally forecasts movement on the foreign exchange market to be used by traders in minimizing risk and guiding transactions.

Foreign Exchange – The decentralized market whereby traders may buy one currency with another currency. The foreign exchange market is often referred to as the forex or FX.

Forex – Forex is an abbreviation for the foreign exchange market. It is often abbreviated again to simply FX.

Forward – A forward is a specific exchange rate on a foreign exchange contract that will be settled on an agreed-upon future date. Forwards are based on the difference between the interest rates of the currencies being traded.

Forward Points – When a forward is calculated, the pips used for adjusting the forward from the current rate are called forward points.

Fundamental Analysis – A basic overview of economic, political and social factors that may help forecast movement in the foreign exchange market.

Futures Contract – A futures contract obliges two parties to a trade at a predetermined rate on a predetermined future date. Futures are very similar to forwards except that futures are usually traded through an exchange as an exchange traded contract (ETC), whereas forwards are over-the-counter (OTC) contracts.