Forex (Foreign Exchange or, simply, FX) is the largest market in the world. It relates to the trading of one currency for another. Forex market involves several key players, namely, the brokers, the banks, the regulators, institutions and the traders.
Scalping is the name given to a trading strategy in which traders profit with small price changes that occur frequently in the market. Scalpers are the traders that typically employ this strategy and execute tens or even a few hundreds of trades per day in the market. The trader can accumulate several small profits and benefit largely if an appropriate exit strategy is put into practice to avoid large losses.
Hedging is a risk management strategy employed to attenuate losses in investments by opening an opposite position in a related asset. Even though with hedging strategies the risk of losses is reduced, it typically also results in a reduction in potential profits. The strategies commonly applied in hedging typically involve derivatives, such as options and futures contracts.
Day trading is a strategy in which operations in the market are done intraday to profit off of price changes for a given asset. Day trading employs a variety of techniques and strategies to benefit from perceived market inefficiencies.
Swing trading is based on identifying swings in stocks, commodities, and currencies that occur over a period of days. A swing trade may work out only after a few days or few weeks. Unlike a day trader, a swing trader is not likely to make trading a full-time career, though a trader might choose to be a day trader and a swing trader.
News-based trading typically revolves around trading opportunities from the heightened volatility around news events.
Swap fee is another designation given to the rollover rate.
Swing trading is based on identifying swings in stocks, commodities, and currencies that occur over a period of days. A swing trade may work out only after a few days or few weeks. Unlike a day trader, a swing trader is not likely to make trading a full-time career, though a trader might choose to be a day trader and a swing trader.
Leverage is an investment strategy applied to increase the potential return of an investment. Of course, with leverage the potential risk of losses is also increased as the same multiplication effect is applied but in a direction opposite to the profitable one.
When you open a “buy” position, you are essentially buying an asset from the market. And when you close your position, you 'sell' it back to the market. A trader typically buys a position when he envisages that the investment will turn profitable in the future, i.e., he will be able to close the position at a price higher than the one he paid for buying. It is also possible to make profit when the asset price drops. In this case, the trader should open a “sell” position..
A bull market is one that is rising and where the economy is sound; while a bear market exists in an economy that is receding, where most assets are declining in value. A bullish asset is one that experts and investors think is about to outperform and likely increase in value. It makes a good investment if you get in before that price increase happens. A bearish stock is one that the experts think is going to underperform and decrease in value.
An Islamic Forex account is a halal trading account that is offered to traders who respect the Quran and desire to invest in the Islamic stock market following the principles of Islamic finance. As Sharia law prohibits the accumulation of interest, traders with Islamic accounts do not receive or pay interest rates.
MetaTrader4 (MT4) is a popular online trading platform that can be used to automate trading actions. It has a simple user interface that gives access to advanced technical analysis and flexible trading system
MT5 is the next level in the trading platforms. MT4 was specifically built for forex trading, while MT5 was designed to provide traders with access to CFDs, stocks and futures. Experienced traders can benefit from rich analysis tools and indicators. Automated trading is also possible through expert advisors (EA) and signals.
A Virtual Private Server (VPS), is a virtual computer that functions independently, just as a real computer does. A VPS can be specifically designed according to the needs of a forex trader and is especially beneficial because of the security and flexibility it provides. Using Forex VPS hosting, a trader can access its virtual platform by using a network connection. This allows trading to be performed very simply from anywhere and at any time. With automated trading, the trades will automatically continue even if electricity outages occur.
In the context of forex brokers, ECN stands for Electronic Communications Network mening that these brokers allow their clients to have direct access to other stakeholders in the forex market. To better understand this concept, please, refer to section " No Dealing Desk Brokers: ECN" in our article “What makes a good forex broker? What is the difference between Market Maker, ECN and STP?”
Brokers of the STP (Straight Through Processing) type operate with direct processing, profiting from the spreads or commissions, depending on the broker. The operations of the clients are forwarded to liquidity providers, which in turn execute the order. In order to know more about this topic, please, refer to section " No Dealing Desk Brokers: STP" in our article “What makes a good forex broker? What is the difference between Market Maker, ECN and STP?”