D

Daylight position limit The maximum amount of a certain currency a

trader is allowed to carry at any single time, between the regular

trading hours.

Dead cross An intersection of two consecutive moving averages that

move in opposite directions and should technically be disregarded.

Dealing systems On-line computers that link the contributing banks

around the world on a one-on-one basis.

Delta (A) (1) The change of the currency option price relative to a change

in the currency price; (2) the hedge ratio between the option

contracts and the currency futures contracts necessary to establish a

neutral hedge; (3) the theoretical or equivalent share position. In the

third case, delta is the number of currency futures contracts a call

buyer is long or a put buyer is short. Delta ranges between 0 and 1.

Descending triangle A triangle continuation formation with a flat

lower trendline and a downward-sloping upper trendline. (See

Triangle.)

Descending triple bottom Bearish point-and-figure chart formation

that suggests that the currency is likely to break a support line the

third time it reaches it. Each new bottom is lower than the previous

one.

Diagonal spread A compound option strategy that consists of several

same-type options, in which the long side and the short side have

different strike prices and different expirations.

Diamond A minor reversal pattern that resembles a diamond shape.

Direct dealing An aggressive approach in which banks contact each

other outside the brokers' market.

Directional Movement Index A signal of trend presence in the market.

The line simply rates the price directional movement on a scale of 0

to 100. The higher the number, the better the trend potential of a

movement, and vice versa.

Discount forward spread A forward price that is deducted from a

spot price to calculate a forward price. It reflects the fact that the

foreign interest rate is lower than the U.S. interest rate for that

particular period.

Discount rate The interest rate at which eligible depository

institutions may borrow funds directly from the Federal Reserve

Banks. The rate is controlled by the Federal Reserve and is not

subject to trading.

Discretion for range to trader stop-loss order A stop-loss order that

gives the trader a number of discretionary pips within which the

order has to be filled.

Double bottoms A bullish reversal pattern that consists of two bottoms

of approximately equal heights. A parallel (resistance) line is drawn

against a line that connects the two bottoms. The break of the

resistance line generates a move equal in size to the price difference

between the average height of the bottoms and the resistance line.

Double tops A bearish reversal pattern that consists of two tops of

approximately equal heights. A parallel (support) line is drawn

against a resistance line that connects the two tops. The break of the

support line generates a move equal in size to the price difference

between the average height of the tops and the support line.

Downside tasuki gap A bearish two-day candlestick combination. It

consists of a second-day blank bar that closes an overnight gap

opened on the previous day by a black bar.

Downward breakout of a bearish support line A bearish point-andfigure

chart formation that confirms the currency's breakout of a

support line the third time it reaches it.

Downward breakout of a bullish support line A bearish point-andfigure

chart formation that confirms the currency's breakout of a

support line the third time it reaches it. The support line is sloped

upward.

Downward breakout from a consolidation formation A bearish pointand-

figure chart formation that resembles the inverse flag formation.

A valid downside breakout from the consolidation formation has a

price target equal in size to the length of the previous downtrend.

Durable Goods Orders An economic indicator that measures the

changes in sales of products with a life span in excess of three years.

Daylight position limit The maximum amount of a certain currency a

trader is allowed to carry at any single time, between the regular

trading hours.

Dead cross An intersection of two consecutive moving averages that

move in opposite directions and should technically be disregarded.

Dealing systems On-line computers that link the contributing banks

around the world on a one-on-one basis.

Delta (A) (1) The change of the currency option price relative to a change

in the currency price; (2) the hedge ratio between the option

contracts and the currency futures contracts necessary to establish a

neutral hedge; (3) the theoretical or equivalent share position. In the

third case, delta is the number of currency futures contracts a call

buyer is long or a put buyer is short. Delta ranges between 0 and 1.

Descending triangle A triangle continuation formation with a flat

lower trendline and a downward-sloping upper trendline. (See

Triangle.)

Descending triple bottom Bearish point-and-figure chart formation

that suggests that the currency is likely to break a support line the

third time it reaches it. Each new bottom is lower than the previous

one.

Diagonal spread A compound option strategy that consists of several

same-type options, in which the long side and the short side have

different strike prices and different expirations.

Diamond A minor reversal pattern that resembles a diamond shape.

Direct dealing An aggressive approach in which banks contact each

other outside the brokers' market.

Directional Movement Index A signal of trend presence in the market.

The line simply rates the price directional movement on a scale of 0

to 100. The higher the number, the better the trend potential of a

movement, and vice versa.

Discount forward spread A forward price that is deducted from a

spot price to calculate a forward price. It reflects the fact that the

foreign interest rate is lower than the U.S. interest rate for that

particular period.

Discount rate The interest rate at which eligible depository

institutions may borrow funds directly from the Federal Reserve

Banks. The rate is controlled by the Federal Reserve and is not

subject to trading.

Discretion for range to trader stop-loss order A stop-loss order that

gives the trader a number of discretionary pips within which the

order has to be filled.

Double bottoms A bullish reversal pattern that consists of two bottoms

of approximately equal heights. A parallel (resistance) line is drawn

against a line that connects the two bottoms. The break of the

resistance line generates a move equal in size to the price difference

between the average height of the bottoms and the resistance line.

Double tops A bearish reversal pattern that consists of two tops of

approximately equal heights. A parallel (support) line is drawn

against a resistance line that connects the two tops. The break of the

support line generates a move equal in size to the price difference

between the average height of the tops and the support line.

Downside tasuki gap A bearish two-day candlestick combination. It

consists of a second-day blank bar that closes an overnight gap

opened on the previous day by a black bar.

Downward breakout of a bearish support line A bearish point-andfigure

chart formation that confirms the currency's breakout of a

support line the third time it reaches it.

Downward breakout of a bullish support line A bearish point-andfigure

chart formation that confirms the currency's breakout of a

support line the third time it reaches it. The support line is sloped

upward.

Downward breakout from a consolidation formation A bearish pointand-

figure chart formation that resembles the inverse flag formation.

A valid downside breakout from the consolidation formation has a

price target equal in size to the length of the previous downtrend.

Durable Goods Orders An economic indicator that measures the

changes in sales of products with a life span in excess of three years.