Forex glossary | Brokerscout.ai

Glossary

Margin (guarantee) deposit Financial funds to be deposited in a trader's account as collateral for current operations performed with the use of leverage.

Example:

In the Forex market, a trader needs to constantly monitor the level of the margin (guarantee) deposit to avoid automatic closing of positions due to lack of funds.
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Margin call The concept of margin call is familiar to every trader who trades with leverage both on the stock and derivatives exchanges, and on the Forex market. In simple words, a margin call is a warning from the broker that there are insufficient funds in the account.

Example:

The trader, fearing a possible decline in the value of his stock portfolio, purchased a margin call on these shares. Thus, he received the right to buy shares at a fixed price in the future, providing himself with protection against potential losses.
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Margin trading Margin trading is trading using borrowed funds provided by a broker. Each brokerage company has its own terms of loan allocation. Loan amounts in percentage ratio also vary.

Example:

A trader takes advantage of margin trading by buying a financial instrument on credit to increase his position in the market and potentially increase his profit, but also increasing the risk of loss.
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Market Maker Participants of transactions operating on the OTC market, directly determining and maintaining the liquidity of this market. They act as both sellers and buyers.

Example:

A market maker on a stock exchange actively participates in trading in a company's shares, providing constant quotes for buying and selling, which helps maintain liquidity and smooth out price fluctuations on the market.
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Market Mover A market mover is the largest liquid company in a sector, whose shares can be followed by the whole sector or even the market as a whole.

Example:

A strong fall in the shares of a market mover on the stock market caused significant changes in the indices and affected investors' trading strategies.
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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