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The OTC market and broker-dealers’ activities in the market are regulated by The Financial Industry Regulatory Authority (FINRA), the U.S. Securities and Exchange Commission (SEC) and various state securities regulators. In addition, companies with SEC-registered securities are regulated by the SEC. OTC Markets Group is neither a stock exchange nor self-regulatory organization (SRO) and is not regulated by FINRA or the SEC.
The OTC market is not suitable for unsophisticated or novice investors. You should gain a thorough understanding of your rights as an investor and investigate the background of the issuing company, individual broker, and brokerage firm before you invest.
A decentralized market of securities not listed on an exchange where market participants trade over the telephone, facsimile or electronic network instead of a physical trading floor. There is no central exchange or meeting place for this market.
Liquidity follows transparency. Companies that provide current disclosure either through a regulator or directly to OTC Markets Group experience significantly greater levels of liquidity, improved price discovery, and more efficient trading.
Doji: The doji is a type of candlestick and a warning sign of a pending reversal. The lack of a real body conveys a sense of indecision or tug-of-war between buyers and sellers and the balance of power may be shifting. The open and close are pretty much equal. The length of the upper and lower shadows can vary and the resulting candlestick looks like a cross, inverted cross or plus sign.
Current Account Balance: The Current Account Balance (CAB) is a function relating to a country's Balance of Payments (BOP), others being the Capital Account and the Financial Account. Basically, it is the broadest measure of international flows of capital, goods, and services in and out of a country.
Chart Indicators:
• Bollinger Bands
• MACD (Moving Average Convergence Divergence)
• Parabolic SAR
• Stochastics
• RSI (Relative Strength Index)
• Moving Average
• RSI(SMA)
• RSI(EMI)
• Momentum
• MC
• Volume
• ADX
• OBV
• MFI
• Williams % Range
• ROC
• Volatility
• Standard Deviation
• Trend Line
• Elliott Wave
Bank of England: The Bank of England is the central bank of the United Kingdom. Sometimes known as the 'Old Lady' of Threadneedle Street, the Bank was founded in 1694, nationalised on 1 March 1946, and gained independence in 1997. Standing at the centre of the UK's financial system, the Bank is committed to promoting and maintaining monetary and financial stability as its contribution to a healthy economy.
The Bank of England has been in place for more than three hundred years, although it wasn't nationalized until 1946. It serves a dual role as both a consumer bank and a government bank. As such, the "Old Lady of Threadneedle Street," as the Bank of England is often called, holds a primary role in the financial status of the United Kingdom.
In 1998 the bank's governing body was changed by the Bank of England Act. Now the Bank of Directors is composed of sixteen non-executive directors, two deputy governors, and the bank's governor. This has modified the bank's responsibilities; their two main purposes now include maintaining the UK's Monetary and financial stability, although it still has as many small-scale account holders as it does large corporate accounts.
In regards to the foreign exchange market, the Bank of England manages the Exchange Equalisation Account. The EEA was formed in 1932 and is the account responsible for influencing the exchange rate of the UK's gold reserves. It also holds foreign currencies and gold for trading purposes
Bailout: A bailout is a financial term referring to an extraordinary act of lending, or outright giving, capital to an entity (a company, bank, individual, etc.) that is in danger of failure due to bankruptcy or insolvency. A bailout can also be given to a failing entity to allow it to exit gracefully without leading to a contagion.
Bank of Japan (BOJ) Monetary Policy Meeting and Announcement: Release schedule : No set time, usually between 2:00 and 4:00 (GMT); monthly, in the middle of the month
Source of report : Bank of Japan
Web Address : http://www.boj.or.jp/en/index.htm
Address of Release : http://www.boj.or.jp/en/theme/seisaku/kettei/index.htm
Schedule of Meetings : http://www.boj.or.jp/en/theme/seisaku/index.htm
Convergence: Normally, the contract price of a futures contract is higher than the current price of the underlying asset (normally a commodity). The futures contract price is higher because of the effect of the time value of money. As the expiration date nears, the spread between the spot price and the futures contracts price becomes smaller and smaller. On the delivery date of the contract, the futures and spot prices should be equal.
This process of futures and spot prices approaching one another is called convergence
Disparity Index: The disparity index is a percentage measurement for the position of the current closing price of an asset relative to that asset's moving average. Traders commonly attribute this measurement to Steve Nison, based on his book Beyond Candlesticks.
The disparity index can take either a positive or a negative value. A positive value indicates that the asset's price is rapidly increasing, while a negative value indicates that the price is rapidly decreasing. A value of zero means that the asset's current price is exactly consistent with its moving average.
The disparity index crossing the zero line reflects an extremely rapid change in the trend of a given asset, and is therefore a strong early-warning indicator of the asset's increasing momentum.
Nison's book suggests that the disparity index can indicate whether an asset is overbought (in the case of a positive value) or oversold (in the case of a negative.) Since overbought and oversold assets are very vulnerable to rapid price reversals, the disparity index is a good indicator of when following the trend of a given asset might be a dangerous proposition.
Dovish: Refers to the tone of language when describing a non-aggressive stance or viewpoint regarding a specific economic event or action. It’s often used when describing the economy or interest rates of a country.
Central bankers are described as "dovish" because they generally favor economic growth and employment over tightening interest rates.
Opposite of Hawkish (hawk).
Binary Options: In finance, binary option (also called fixed return option, all or nothing or digital option)is a type of option where the payoff is either some fixed amount of some asset or nothing at all.[1] Binary options have been available since the middle of 2008. Binary options are trading options that pay out a pre-set and fixed amount if the underlying asset on which the option is based reaches the trader’s selected ‘direction’ (up or down compared with advertised value at the time of purchasing that option) at expiry time.[2]
The Binary Option is a prediction on which way the price of a stock, commodity, index or foreign currency will move by a designated expiration time. Traders can never purchase or own the asset, they can only predict the direction that the asset will go. There are only two possible outcomes and the price of the asset does not matter, all that matters is if the prediction was correct or incorrect.
Ascending Triangle: An Ascending Triangle is a price action formation signal based on continuation pattern theory.
Continuation patterns also include symmetrical triangles, descending triangles, wedges, flags, rectangles 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.
An ascending triangle demonstrated within a chart pattern is recognized as having a bullish position and occurs as a result of price highs and price lows that have begun to converge so that they, in effect, form a point. If a line is drawn above and below the pattern the top line will appear straight whilst the bottom will slope upwards at an angle.
Ascending triangles are considered to be at their most reliable when occurring during an uptrend, and a buy order should be placed on a break above the upper resistance area of the triangle. If however, the pattern is proved to be false, or if the ascending triangle pattern should fail, then it is advisable to sell when the market breaks out and below the triangle.
Depression: The simple definition of a depression is a large scale recession that lasts an extended period of time. Some define a depression as a scenario where real GDP drops by over 10%. Another way to differentiate it from a recession is the period of time. Recessions are said to typically last one year while an economic depression lasts several years.
The term “depression” comes from the Great Depression of the 1930s. Before that event, any modest decline in economic activity was considered to be a depression. The term recession was then used to describe smaller economic downturns while the depression was used to describe major, longer lasting declines like the Great Depression.
Ascending Trend Channel: An ascending trend channel is a basic chart pattern used in technical analysis.
Ascending trend channels are a useful tool due to their ability to predict overall changes in trend. As long as prices remain within the ascending trend channel, the upward trend in price can be expected to continue. As soon as prices exceed either trendline forming the channel, however, a strong signal either to buy or to sell is generated. A break through the upper trendline generates a strong buy signal, while a break through the lower trendline generates a strong sell signal.
Broadening Formation: A broadening formation is an example of a consolidation pattern and a highly useful tool in the prediction of the likelihood of a reversal in the direction of a current trend. When found in an uptrend it indicates not a continuation of that trend, but a near-term reversal of the price action.
The broadening formation occurs when the fluctuation within the price produces a series of higher highs and of lower lows that steadily widen over time and are generally thought to be found only in found in topping formations where they are considered to be the result of unrealistic expectations of bullish investors.
Unlike the majority of other consolidation patterns, broadening formations feature increasingly wide ranges and are subject to much greater levels of volatility as time passes. Volume levels increase as the share price rises, which although normally indicates a bullish position rallies in this instance usually prove to be very short lived and the following declines are prone to decimating former support levels leading to an eventual collapse.
Central Bank: Central banks play a key role in the currency markets because of their power over monetary policy. They have a direct influence over money supply, which in turn affects demand and price of the currency. Through the use of different policies, central banks can try to manipulate the markets so that they can keep their currency at specific levels. Some countries and their central banks try to peg their currency to that of another currency or basket of currencies (for example, China to the U.S.).
The central bank can participate in the forex market by buying and selling their currency at the spot market in order to keep it from changing too much. Another motivation for central banks is to keep the local currency at a specific price in order to make their local economy more attractive for international trade. If a country’s currency appreciates too quickly, it could actually make it less appealing to importers.
Remember that many transactions have to use the local currency. Thus, if currency that is needed rises too quickly, it effectively makes goods more expensive to foreigners, which in turn, hurts trade. To counter this, the central bank may intervene in the market by selling its currency and buying up other major currencies. This in effect, weakens the local currency so as to make it more appealing to foreign importers.
While the exact value of what percentage such central bank transactions take up isn’t known, take note that because these are the banks of national governments, such interventions can have a much larger impact on the market than any single commercial bank.
Bretton Woods Agreement of 1944: The Bretton Woods Agreement is a pact that was made all the way back in the 1940's by the economic powers at that time to stabilize currencies. What it did was establish a fixed exchange rate for currencies in terms of gold to make trade among nations easier. This kind of exchange rate system lasted until 1971, before the US finally decided to end the convertibility of the dollar to gold.