Forex glossary | Brokerscout.ai

Glossary

Forex Forex is the world's currency market, the largest in terms of trading volume and revenues. Trillions of dollars are traded here every day. Based on the definition of Forex (foreign exchange) in English, it is the exchange of foreign currencies. Central and commercial banks of the world, transnational corporations, large investment companies, funds, private investors and traders participate in these currency transactions.

Example:

The trader actively participated in the forex market, analysing currency pairs and making transactions in order to profit from changes in exchange rates.
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Forex indicators Indicators in the market are technical analysis tools created to summarise information about the behaviour of the asset price. Their authors are professional traders with extensive trading experience and a penchant for analytics.

Example:

In financial markets, traders actively use forex indicators for more accurate forecasting of price movements.
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Fundamental analysis on Forex Fundamental analysis (FA) is a method of analysing and forecasting the behaviour of the currency market and other financial markets taking into account fundamental factors. As a rule, it is used for planning long-term investments.

Example:

Taking into account fundamental analysis, a trader studies economic indicators, financial condition and factors influencing the market before deciding to enter or exit a trading position.
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Futures A contract whose subject is a financial asset or commodity and whose terms require delivery at a specific date in the future.

Example:

A trader decides to take advantage of a futures contract by entering into a transaction for the future delivery of an asset at a predetermined price to fix the terms of the transaction in the financial market.
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Hedging Hedging is an action aimed at reducing the risks of an unfavourable change in the price of a certain asset.

Example:

A trader applies a hedging strategy by opening an opposite position in order to mitigate potential losses from price changes in the market and ensure a more stable financial position.
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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