F

Factory Orders An economic indicator that refers to total orders for

durable and nondurable goods. The nondurable goods orders consist

of food, clothing, light industrial products, and products designed for

the maintenance of the durable goods.

FASB # 8 (Financial Accounting Standards Board's Statement Number 8)

The original accounting rules regarding foreign exchange were

standardized in 1975, which set the procedures for foreign currency

translations into U.S. dollars in the consolidated balance sheets of

U.S. multinational corporations.

FASB # 52 (Financial Accounting Standards Board's Statement Number 52)

A complex set of rules designed in 1981, whose main objective is to

move the foreign exchange P&L from current income into

shareholders' equity.

Federal funds (Fed funds) Immediately available reserve balances at

the federal reserves. The Fed funds are widely used by commercial

banks or large corporations to lend to each other on an overnight

basis. Although their level is established by the Fed, the prices

fluctuate because they are traded in the market.

Federal Open Market Committee (FOMC) A committee established in

1935, through the Banking Act, to replace the Open Market Policy

Conference (OMPC.) Currently active.

Federal Reserve The central bank of the United States. It was

established in 1913 when Congress passed the Federal Reserve Act.

The Act held that role of the Federal Reserve was "to furnish an

elastic currency, to afford the means of rediscounting commercial

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 128

paper, to establish a more effective supervision of banking in the

United States, and for other purposes."

Federal Reserve Board The board consists of a Governor and four other

regular members. The Secretary of the Treasury and the Comptroller

of the Currency are closely consulted. The 12 regional Federal

Reserve Banks around the country have sufficient autonomy to

manage financial conditions in their districts. They are also managed

by governors.

Fedwire An automated communications and settlement system

linking the Federal Reserve banks with other banks and with

depository institutions.

Fence A compound option strategy that consists of either a long

currency position—a long out-of-money put and a short out-of-themoney

call, where the options have the same expiration date (risk

conversion); or a short currency position—a short out-of-the-money

put and a long out-of-the-money call, where the options have the

same expiration date (risk reversal).

Fibonacci percentage retracements Price retracements of 0.382

and 0.618, or approximately 38 percent and 62 percent.

Fibonacci ratio 0.618 and 0.312.

Fibonacci sequence Takes a sequence of numbers that begins with 1

and adds 1 to it, then takes the sum of this operation (2) and adds it

to the previous term in the sequence (1). Next it takes the sum of

the second operation (3) and adds it to the previous term in the

sequence (the sum of the first operation, i.e., 2). The Fibonacci

sequence continues iterating in this manner, adding the most recent

sum to the previous term, which is itself the sum of the two previous

terms, etc. This yields the following series of numbers: 1 1 2 3 5 8 13

21 34 55 89 144 233 377 610 987 1597 2584 4181 (etc.).

FINEX A currency market that is part of the New York Cotton

Exchange (NYCE), the oldest futures exchange in New York. The

exchange lists futures on the European Currency Unit and the USDX,

a basket of ten currencies: deutsche mark, Japanese yen, French

franc, British pound, Canadian dollar, Italian lira, Dutch guilder,

Belgian franc, Swedish krona, and Swiss franc.

Fisher effect A theory holding that die nominal interest rate consists

of the real interest rate plus the expected rate of inflation.

Flag A continuation formation that resembles the outline of a

flag. It consists of a brief consolidation period within a solid and

steep upward trend or downward trend. The consolidation itself

tends to be sloped in the opposite direction from the slope of the

original trend, or simply flat. The consolidation is bordered by a

support line and a resistance line, which are parallel to each other or

very mildly converging, making it look like a flag (parallelogram). The

previous sharp trend is known as the flagpole. When the currency

resumes its original trend by breaking out of the consolidation, the

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 129

price objective is the total length of the flagpole, measured from the

breakout price level.

Floor brokers Any individuals on the exchange floor engaged in

executing orders for another person. They may also trade for their

own accounts, with the primary responsibility of executing the

customers' orders first. Brokers are licensed by the federal

government.

Floor traders (locals) Exchange members who execute their own

trades by being physically present in the pit, or place for futures

trading.

Foreign exchange The mechanism that values foreign currencies in

terms of another currency.

Foreign exchange brokers Intermediaries among banks who bring

together buyers and sellers to the market, optimize the prices they

show to their customers, and do not take positions for themselves.

Foreign exchange exposure The potential effect of currency

fluctuations on shareholders' equity.

Foreign exchange rate The price of one currency in terms of another.

Forward outright Foreign exchange deal that matures at a day past the spot

delivery date (generally two business days).

Forward spread (forward points or forward pips) Forward price used to

adjust a spot price to calculate a forward price. It is based on the

current spot exchange rate, the interest rate differential, and the

number of days to delivery.

Fractal geometry Geometry theory that refers to the fact that certain

irregular objects have a fractal number of dimensions. In other

words, an object cannot fill an integer number of dimensions.

French-West German Treaty of Cooperation A treaty signed in 1963

by President Charles de Gaulle and Chancellor Konrad Adenauer,

which established that West Germany would lead economically

through the cold war and France, the former diplomatic powerhouse,

would provide the political leadership.

Fuzzy logic Method that attempts to weigh the quality of the patterns

recognized by neural networks. Because not all patterns have equal

financial significance for foreign currency forecasting, this method

qualifies the degree of certainty of the results.

Factory Orders An economic indicator that refers to total orders for

durable and nondurable goods. The nondurable goods orders consist

of food, clothing, light industrial products, and products designed for

the maintenance of the durable goods.

FASB # 8 (Financial Accounting Standards Board's Statement Number 8)

The original accounting rules regarding foreign exchange were

standardized in 1975, which set the procedures for foreign currency

translations into U.S. dollars in the consolidated balance sheets of

U.S. multinational corporations.

FASB # 52 (Financial Accounting Standards Board's Statement Number 52)

A complex set of rules designed in 1981, whose main objective is to

move the foreign exchange P&L from current income into

shareholders' equity.

Federal funds (Fed funds) Immediately available reserve balances at

the federal reserves. The Fed funds are widely used by commercial

banks or large corporations to lend to each other on an overnight

basis. Although their level is established by the Fed, the prices

fluctuate because they are traded in the market.

Federal Open Market Committee (FOMC) A committee established in

1935, through the Banking Act, to replace the Open Market Policy

Conference (OMPC.) Currently active.

Federal Reserve The central bank of the United States. It was

established in 1913 when Congress passed the Federal Reserve Act.

The Act held that role of the Federal Reserve was "to furnish an

elastic currency, to afford the means of rediscounting commercial

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 128

paper, to establish a more effective supervision of banking in the

United States, and for other purposes."

Federal Reserve Board The board consists of a Governor and four other

regular members. The Secretary of the Treasury and the Comptroller

of the Currency are closely consulted. The 12 regional Federal

Reserve Banks around the country have sufficient autonomy to

manage financial conditions in their districts. They are also managed

by governors.

Fedwire An automated communications and settlement system

linking the Federal Reserve banks with other banks and with

depository institutions.

Fence A compound option strategy that consists of either a long

currency position—a long out-of-money put and a short out-of-themoney

call, where the options have the same expiration date (risk

conversion); or a short currency position—a short out-of-the-money

put and a long out-of-the-money call, where the options have the

same expiration date (risk reversal).

Fibonacci percentage retracements Price retracements of 0.382

and 0.618, or approximately 38 percent and 62 percent.

Fibonacci ratio 0.618 and 0.312.

Fibonacci sequence Takes a sequence of numbers that begins with 1

and adds 1 to it, then takes the sum of this operation (2) and adds it

to the previous term in the sequence (1). Next it takes the sum of

the second operation (3) and adds it to the previous term in the

sequence (the sum of the first operation, i.e., 2). The Fibonacci

sequence continues iterating in this manner, adding the most recent

sum to the previous term, which is itself the sum of the two previous

terms, etc. This yields the following series of numbers: 1 1 2 3 5 8 13

21 34 55 89 144 233 377 610 987 1597 2584 4181 (etc.).

FINEX A currency market that is part of the New York Cotton

Exchange (NYCE), the oldest futures exchange in New York. The

exchange lists futures on the European Currency Unit and the USDX,

a basket of ten currencies: deutsche mark, Japanese yen, French

franc, British pound, Canadian dollar, Italian lira, Dutch guilder,

Belgian franc, Swedish krona, and Swiss franc.

Fisher effect A theory holding that die nominal interest rate consists

of the real interest rate plus the expected rate of inflation.

Flag A continuation formation that resembles the outline of a

flag. It consists of a brief consolidation period within a solid and

steep upward trend or downward trend. The consolidation itself

tends to be sloped in the opposite direction from the slope of the

original trend, or simply flat. The consolidation is bordered by a

support line and a resistance line, which are parallel to each other or

very mildly converging, making it look like a flag (parallelogram). The

previous sharp trend is known as the flagpole. When the currency

resumes its original trend by breaking out of the consolidation, the

forexSwiss.com Глоссарий и специальные термины

ФОРЕКС. Электронное руководство для успешной торговли на валютном рынке 129

price objective is the total length of the flagpole, measured from the

breakout price level.

Floor brokers Any individuals on the exchange floor engaged in

executing orders for another person. They may also trade for their

own accounts, with the primary responsibility of executing the

customers' orders first. Brokers are licensed by the federal

government.

Floor traders (locals) Exchange members who execute their own

trades by being physically present in the pit, or place for futures

trading.

Foreign exchange The mechanism that values foreign currencies in

terms of another currency.

Foreign exchange brokers Intermediaries among banks who bring

together buyers and sellers to the market, optimize the prices they

show to their customers, and do not take positions for themselves.

Foreign exchange exposure The potential effect of currency

fluctuations on shareholders' equity.

Foreign exchange rate The price of one currency in terms of another.

Forward outright Foreign exchange deal that matures at a day past the spot

delivery date (generally two business days).

Forward spread (forward points or forward pips) Forward price used to

adjust a spot price to calculate a forward price. It is based on the

current spot exchange rate, the interest rate differential, and the

number of days to delivery.

Fractal geometry Geometry theory that refers to the fact that certain

irregular objects have a fractal number of dimensions. In other

words, an object cannot fill an integer number of dimensions.

French-West German Treaty of Cooperation A treaty signed in 1963

by President Charles de Gaulle and Chancellor Konrad Adenauer,

which established that West Germany would lead economically

through the cold war and France, the former diplomatic powerhouse,

would provide the political leadership.

Fuzzy logic Method that attempts to weigh the quality of the patterns

recognized by neural networks. Because not all patterns have equal

financial significance for foreign currency forecasting, this method

qualifies the degree of certainty of the results.