Failed Fifth
(Elliott Wave)
A failed fifth wave occurs when the completion of the fifth wave does not penetrate the extreme of the third wave. It is indicative of either the price target having been met or a sharper reversal in prices.
Falling and Rising Three
(Candlestick Continuation Pattern)
A Rising Three pattern is a bullish continuation pattern in an uptrend. The first bar develops as a long white bar. The following three bars are all short days but which fail to move below the low of the first day’s long white bar. On the fifth day a further long white bar develops that breaks above the high of the first long white day.
The failure of the correction that lasts over three days to retrace past the low of the first long white bar signals that the selling pressure is weak and that bulls can dominate once again.
A Falling Three pattern is a bearish continuation pattern in a downtrend. The first bar develops as a long black bar. The following three bars are all short days but which fail to move above the high of the first day’s long black bar. On the fifth day a further long black bar develops that breaks below the low of the first long black day.
The failure of the correction that lasts over three days to retrace past the high of the first long black bar signals that the buying pressure is weak and that bears can dominate once again.
Fast Fourier Transform
Decomposes a periodic series of data into its component frequencies.
Failure Swing
The market not trading to a new high and thereby not reaffirming the uptrend, or not trading to a new low in a downtrend. Also used when an oscillator does not move to a new high when the market makes a new high, or the oscillator does not make a new low when the market makes a new low.
The market not trading to a new high and thereby not reaffirming the uptrend, or not trading to a new low in a downtrend. Also used when an oscillator does not move to a new high when the market makes a new high, or the oscillator does not make a new low when the market makes a new low.
An event in the Elliott Wave Principal, when the fifth wave of a five-wave pattern fails to move above the top of the completed third. This will normally be a precursor to a strong reversal.
Federal Reserve (Fed)
The Central Bank of the United States.
Fibonacci
Leonardo Fibonacci was an Italian 13th century mathematician who developed a sequence of “magic” numbers that many consider has a natural place in the financial market place. The sequence was developed by taking zero and adding one to this, then adding the current number in the sequence to the previous number to create the next in the sequence:
0 - 1 - 1 - 2 - 3 - 5 - 8 - 13 - 21 - 34 - 55 - 89 - 144 etc
From this sequence of numbers certain ratios such as 38.2% and 61.8% can be derived and used in determining support and resistance.
Filter
A mathematical routine that alters the price series. This may be achieved by measuring the movement of price around a moving average that smoothes the price data to remove noise. Alternatively filters may be used in developing trading rules to eliminate loss making trades.
5-3-5
(Elliott Wave)
This is a method of referring to a simple ABC pattern that is comprised of five-wave waves A and C divided by a three-wave wave B. The diagram shows this pattern.
Fixed Exchange Rate
Also referred to as a pegged rate. An exchange rate that has been set by a country’s central bank against one or more currencies. Example: from 1993 - 2002 the Argentine Peso was fixed against the U.S. Dollar but floated freely against other currencies.
Flag
A pattern formed during a short consolidation in price movement that is contained by two parallel lines and thus looks similar to a flag on a flagpole. Additionally, the price movements before and after the flag are generally equal in length.
Flat Correction
(Elliott Wave)
Occasionally in a correction the end of wave B will complete at the extreme of the end of the impulsive wave. Wave C will normally retrace to the extreme of wave A. Wave A will be comprised of three waves. Wave C will be comprised of five waves.
Foreign Exchange (Forex or FX)
Terms used to describe the process of trading one currency against another at a set price or rate. Also names for the global currency market, itself.
Forex - See Foreign Exchange.
Frequency
The number of cycles within a time period. For instance a 13 week cycle would have an annual frequency of four.
Front and Back Office
A phrase used in banks to differentiate the area that conducts trades (front office), and the area that process trades (back office).
Front-Loaded
The fees and commission are subtracted from the initial investment before trading.
Fundamental Analysis
Examines the affect of economic, social and political events on currency prices.
Fundamental Factors
Financial, Economic, Political, and Social events affecting the FX market.
FX -see Foreign Exchange
FX-Strategy System
Developed by Doug Schaff in the 1990s, this back-tested technical trading system is designed to give traders a clear picture of the overall momentum or trend of a currency market.