Forex glossary | Brokerscout.ai

Glossary

Resistance A price level at which the growth of a financial instrument's value is expected to stop in case of a trend reversal. The opposite value of resistance is support.

Example:

A trader has identified a resistance level on the price chart where the asset has historically started to decline and has decided to reduce his long position, fearing that prices may have difficulty overcoming this level.
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Short position (short) In stock exchange terminology, a short position means a deal for sale, or in another way a short (from English short - "short"). The concept is also used in the over-the-counter forex market, where currencies are bought and sold, so it is a short currency position.

Example:

A trader has decided to open a short position, expecting a decline in a valuable asset and planning to profit from the price difference at the close of the transaction.
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Short Selling In the Forex market, short selling means selling the base currency and buying the secondary currency. For example, if you short sell GBP/USD, you are selling the British pound sterling and buying the US dollar.

Example:

The investor has decided to take advantage of short selling by selling an asset that they do not currently own, with the intention of buying it back at a lower price in the future and capitalising on the difference.
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Spot Spot - a transaction on purchase/sale of one currency for another currency, the settlements on which are made on the second working day from the day of conclusion of the transaction.

Example:

A trader has conducted a transaction on the spot market by buying or selling currency at the current market rate with the intention of conducting a financial transaction immediately or within two business days.
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Spread Spread is one of the fundamental concepts on the currency market, without knowledge of which it is difficult to imagine a trader's work. It denotes the difference between the current buy and sell prices of a financial instrument and is the main source of income for brokers, who take a small part of the spread as a kind of commission for providing services.

Example:

A trader pays attention to the level of spread between the buy and sell prices in an attempt to minimise transaction costs when making transactions on the financial market.
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Risk Warning

Before embarking on Forex trading, it is essential to thoroughly evaluate your investment objectives, level of experience, and risk tolerance. Never allocate funds that you cannot afford to lose.

Off-exchange foreign exchange transactions carry significant risks, encompassing leverage, credit risk, limited regulatory protections, and market volatility. These factors can significantly influence currency prices and liquidity.

Furthermore, the leverage inherent in forex trading means that market fluctuations can result in substantial gains or losses relative to your initial investment. If market conditions go against you, you may risk losing your entire initial margin and be required to inject additional funds to maintain your position. Failure to meet margin requirements may lead to position liquidation and subsequent losses for which you bear responsibility

Before embarking on Forex trading, it is essential to thoroughly evaluate your investment objectives, level of experience, and risk tolerance. Never allocate funds that you cannot afford to lose.

Off-exchange foreign exchange transactions carry significant risks, encompassing leverage, credit risk, limited regulatory protections, and market volatility. These factors can significantly influence currency prices and liquidity.

Furthermore, the leverage inherent in forex trading means that market fluctuations can result in substantial gains or losses relative to your initial investment. If market conditions go against you, you may risk losing your entire initial margin and be required to inject additional funds to maintain your position. Failure to meet margin requirements may lead to position liquidation and subsequent losses for which you bear responsibility