Forex is an international currency market that produces free currency trade. The main difference from the stock market (exchange) is that Forex trades in currency, and on the exchange securities. In addition, Forex operates 24 hours a day throughout the working week and has no specific physical address.

With some Forex brokers, you can start trading in the Forex market already with $1. Usually, the minimum amount ranges from $100 to $10,000 ($100,000 or more for trading on the interbank market).

Forex margin is designed to maximize profits in the foreign exchange market, forex margin trading with the successful development of events significantly increases the profitability of trader transactions. Forex margin implies that for trading, a broker provides his client with a leverage or otherwise, it is also called a dealing leverage. The amount of the deposit for which a loan is granted is called forex margin. The amount of leverage each broker sets on their own, usually it varies from 10 to 500, for example, you open a deposit of $100 with a leverage of 1:500, now to trade you available $50,000, it is clear that to trade with this amount is much nicer.

Margin Call is a warning from a broker to a trader about a small amount of free funds. The trader’s transactions can go into the minus so much that there may be very little funds to secure collateral under them. Then the broker will require to replenish the deposit or close part of the transactions. If the trader does nothing and the minus on transactions continues to grow, a stop out will occur.

Stop Out is the forced closing of trader transactions by a broker. Closing deals may be full or partial. The broker does this because he does not want to be responsible for the open trades of the trader. It is the responsibility of the trader to provide collateral for his transactions.

The sizes of margin call and stop out are set as a percentage of the deposit and are always indicated on the broker’s website. Before you start trading with a particular broker, you should ask about the size of these tools.

Cross rate is one of the currency pairs that does not include the American dollar. The cross rate is expressed in the ratio of each currency to the US dollar. Example: EUR/CAD starts a growth movement, respectively EUR/USD is growing faster than the CAD/USD currency pair.

Volatility is a characteristic that determines the strength of a change in the value of an asset (currency, product, stock, etc). In other words, volatility is the amplitude of price fluctuations, the difference between the highest and lowest prices. Volatility is measured in % of the asset price. 1-2% is low volatility, 10% and higher is big volatility.

Let’s review an example. Of course, we all know what is cryptocurrency and this cryptocurrency has very high volatility because the course is affected by supply and demand, the emergence of new cryptocurrencies, and floating countries’ loyalty to this type of digital money. As a result, we see a special lack of trust of the state and ordinary citizens in the crypto industry.

The most valuable tools for risk management are the orders «limit order» and «stop loss order». «Limit order» limits the maximum price that will be paid, or the minimum price that will be received upon completion of the transaction. «Stop loss order» guarantees the automatic liquidation of a certain position when the price reaches a predetermined level in order to limit potential losses if the market moves against the position of the investor. The liquidity of the Forex market increases the chance of the execution of orders «limit order» and «stop loss order».

ECN (Electronic Communication Network) is an electronic communication network through which applications for the buy/sell of trading instruments of retail clients trading on ECN, as well as large banks and brokers, are displayed. One of the most important arguments in favor of an ECN account is that customer positions are directly transferred to liquidity providers (Straight Through Processing or STP), and the ECN broker does not interfere with the trading process.

Demo account – a virtual trading account. Designed to study the trading terminal, study and develop trading strategies, obtain sustainable trading skills without the risk of losing real money.

A term that is used to refer to the reverse purchase of previously sold contracts or shares, called short item coverage. Coverage, or liquidation, of short positions is carried out if the market participant no longer expects a fall in the prices of the respective contracts.

Principle is very simple: buy cheaper – sell more expensive. And vice versa: sell more expensive – buy cheaper. Exchange rates are constantly changing, and you can always make good money on this difference. The fact is that many large traders do not play, but only fulfill orders of large clients – trading organizations, banks, financial institutions, which for some reason, just need to transfer one currency to another. And what exactly is the course on the market, they absolutely do not care, that is, de facto they are ready to give money to those who constantly trade on Forex.

Currency traders make decisions using technical and fundamental analysis. Traders using technical analysis to identify trading trends use charts, trend lines, support and resistance levels, a lot of patterns and mathematical schemes, while traders using fundamental analysis predict quotes moving, interpreting various economic information, including news, issued government statistics and even rumors. However, the most powerful movement of quotes is given by unexpected events, which may come from the Central Bank raising interest rates due to political elections or even war. However, more often than not, the expectation of an event has a greater impact than the event itself.

These are any market assets available for trading in a company in which you have a trading account, including currencies, CFD contracts for securities, commodity assets, interest rates and debt instruments, indices, basic and precious metals.

Arbitrage – a type of trading with minimal risk. The same currency is simultaneously bought and sold against the other from two counterparties for profit due to the difference in prices.