Forex glossary | Brokerscout.ai

Glossary

Diversification Diversification is the allocation of capital between assets with different returns and risks in order to minimise risks and reduce financial losses.

Example:

Diversification of an investment portfolio reduces risk by allocating capital between different assets or asset classes.
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Dow Jones Index The oldest American index, the Dow Jones allows you to follow the situation in the U.S. industrial sector, serving as a kind of indicator for the economy of the region. The Dow Jones Index is based on the weighted average stock prices of the 30 largest companies in the United States.
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Downtick A decrease in the value of a financial instrument by one tick or more. Many exchange platforms use the up-tick rule, according to which a trader can sell a share only if its price exceeds the value of this financial instrument at the last transaction with it.
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Exchange rate An expression of the value of one currency in units of another currency. For example, a New Zealand dollar may be worth 82 US cents or 65 Japanese yen.

Example:

A trader pays attention to the current exchange rate to determine the best moment to enter a transaction on the Forex market and exchange one currency for another.
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Floating / profit loss Floating profits losses are the trader's profit or loss during an open trade that has not yet been finally fixed

Example:

The trader closely monitored the floating profits of his open positions, ready to close the trades if market conditions changed to lock in the results.
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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

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