Forex glossary | Brokerscout.ai

Glossary

Index A numerical indicator of the cumulative change in the value of a group of stocks over a specified period of time.

Example:

An investor monitored the dynamics of an index reflecting the general state of the stock market in order to make informed decisions about his investments.
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Leverage Leverage is a term used to describe margin trading on financial markets. In simple words, it is a loan from a broker to a trader.

Example:

The trader, in an attempt to increase his potential profit, used leverage to control a much larger amount of funds in the market than he had in his account.
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Long position (long) In general, going long (long position) means to buy and going short (short position) means to sell. The value of a long position increases if the market price of an instrument increases.

Example:

Taking into account the prospects of growth, the trader decided to open a long position, hoping to profit from the increase in the value of the selected asset in the market.
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Lot An abstract name used to denote in a trading platform the amount of base currency or securities involved in a transaction.

Example:

A trader has calculated the optimal trading volume by selecting a certain number of lots when opening a position in order to effectively manage his risk and potential profit in the financial market.
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Margin Margin in trading is a part of funds in a trader's account, which is frozen when a position is opened and cannot be used for further trading until the deal is closed.

Example:

The trader decided to use leverage, thus increasing his position in the market, but was careful to monitor the margin level to avoid possible losses due to price fluctuations.
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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