Forex Terms S



Sangu (three gaps). A reversal candlestick signal applicable in either a steeply rising or falling market, when the daily limits will break the trading. The theory holds that after the third gap, the market will reverse at least to the second gap.

Sanpei (three parallel bars). A reversal candlestick combination. It refers to the similarity in direction and velocity of three consecutive bars, as otherwise all the entries are parallel. They generate a reversal formation after an extended rally. When bullish, the formation is known as the three soldiers. When bearish, the name is the three crows.

Sanpo (three methods). A candlestick combination that advises that retracements are in order before the market will reach new highs and new lows.

Sansen (three rivers) method. A reversal candlestick combination. It consists of three daily entries. The first day is a long blank bar (a bullish move), followed by a bullish but short-range one-day island. The third entry is a bearish long black line.

Sanzan (three mountains). A reversal candlestick combination. It consists of a triple-top formation.

Sashikomi. A bearish two-day candlestick combination. It consists of a modified irikubi bar. The difference is that the opening of the second day's blank bar is much lower than that of the irikubi bars. Despite the wider gap thus formed, the blank candlestick closes only slightly above the previous day's low.

Settlement risk. A form of credit risk that may occur due to the time zones separating the nations. Payment may be made to a party who will declare insolvency (or be declared insolvent) immediately after receipt, but prior to executing its own payments.

Shitakage. Lower shadow of the candlestick.

Short straddle. A compound option that consists of a short call and a short put on the same currency, at the same strike price, and with the same expiration dates. The maximum profit consists of the combined premium of the two individual options. The loss occurs when the level of the premium is over-passed by the currency swing, and the loss is unlimited.

Short strangle. A compound option that consists of a short call and a short put on the same currency, with the same expiration dates, but with different strike prices. The maximum profit consists of the combined premium of the two individual options. The loss is unlimited.

Simple moving average or arithmetic mean. An average of a predetermined number of prices over a number of days, divided by the number of entries.

Slow stochastics. A version of the original stochastic oscillator. The new, slow %K line consists of the original %D line. The new, slow %D line formula is calculated from the new %K line.

Snake. The nickname of the European Joint Float Agreement's 2.25 percent fluctuation band for the European currencies against each other, derived from its curvaceous movement.

Speed-lines. Support or resistance lines that divide the range of the trend into thirds on a vertical line. The two resulting speed-lines are plotted by using as coordinates the origin and the 1/3 and 2/3 prices respectively.

Spot deal. A foreign exchange deal that consists of a bilateral contract between a party delivering a certain amount of a currency against receiving a certain amount of another currency from a second counterparty, based on an agreed exchange rate, within two business days of the deal date. The exception is the Canadian dollar, in which the spot delivery is executed within one business day.

Spot next (S/N). A foreign exchange deal that matures one business day past the spot date, or three business days.

Sterilized intervention. A central bank intervention in the foreign exchange market that consists of a sale of government securities that offsets the reserve injection which occurs due to the foreign exchange intervention. The money market activity sterilizes the impact of the foreign exchange intervention on the money supply. Sterilized interventions have a short- to medium-term effect.

Stochastics. Oscillators that consist of two lines called %K and %D. Visualize %K as the plotted instrument and %D as its moving average. The resulting lines are plotted on a 1 to 100 scale. Just as in the case of the RSI, the 70 percent and 30 percent values are used as warning signals. The buying (bullish reversal) signals occur at under 10 percent and the selling (bearish reversal) signals come into play at above 90 percent.

Strike price. An exercise price.

Support level. The troughs representing the level at which demand exceeds supply.

Swap deal. A foreign exchange deal that consists of a spot deal and a forward outright deal. A party simultaneously buys and sells (or sells and buys) the same amount of a currency with another counterparty; the two legs of the transaction mature on different dates (one of the dates being the spot date) and are traded at different exchange rates(one of the exchange rates being the spot rate). Exceptions may be made with regard to the value dates (forward-forward) and amount (different amounts).

SWIFT (Society of Worldwide Inter-bank Financial Telecommunications). An automated system set up to send standardized payment instructions for foreign currencies among international banks.

Swing Index (SI). A momentum oscillator that is plotted on a scale of -100 to +100. The spikes reaching the extremes suggest reversal.

Symmetrical triangle. A triangle continuation formation in which the support and resistance lines are symmetrical.

Synthetic call option. A combination of a long currency and a long currency put.

Synthetic put option. A combination of a short currency and a long currency call.

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