Forex Glossary - R -

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Random Walk Theory: An efficient market hypothesis, stating that prices move randomly versus their intrinsic value. Therefore, no one can forecast market activity based on the available information

Rally: A sudden price recovery after a substantial decline in price.

Rate: Price of one currency against another currency.

Rate of Change: A momentum oscillator where by the oldest closing price is divided into the most recent one.

Ratio Spread: A compound option strategy where the number of long options is different from the number of short options.

Reserves: Funds set aside by government for future use. They constitute of a mixture of convertible foreign currency, gold and SDR.

Reserve Currency: Currency kept in reserve by the government in paying international debt. These are normally dollar, euro and the sterling.

Resistance: The level where price bounces back and fourth forming a strong opposition not allowing price to break above that level.

Revaluation: Is the increase in a country’s fixed exchange rate.

Reversal: This occurs at the end of a trend where price starts to charge direction in an upward or downward movement.

Risk: Is the degree of uncertainty in relation to an investment where high volatility and leverage contributes to riskiness.

Risk/Return: The amount of money an investor is ready to risk to profit from the market.

Risk Management: These are techniques used by investors to minimize risk and substantial loss of money.

Rollover: Referred to as an overnight swap where open position is forwarded to the next valid value date.