In the forex market, a broker is able to
provide a client with leverage; this allows investors to take greater
advantage of fluctuations in exchange rates than they could have on
their own. If a broker offers leverage up to 1:1000 for example, a
trader's buying power is magnified 1000 times.Leveraged products do
carry risk since there is a possibility for losses greater than the
amount invested.
Technical analysis is used by traders in an
attempt to predict the direction that the market is bound to take.
Common components of technical analysis are charts which record market
activity.
Fundamental analysis refers to the way
political and economic events affect the health of the market and
influence the direction it takes.
The definition of a bearish outlook is when a
trader adopts a negative outlook about the economy, predicting that the
market will decrease and that the prices of certain assets will fall.
The definition of a bullish outlook is when a
trader adopts a positive outlook about the economy, predicting that the
market will rise and that the prices of certain assets will increase.
This defines the position traders take when
they predict that the value of an asset will decrease. They sell this
asset in the hope that they will buy it later on at a lower price.
This defines the position traders take when
they predict that the value of an asset will increase. They buy this
asset in the hope that they will sell it at a higher price later on.
Spread is the difference between the bid price and the ask price of an asset.
This is the price an investor is prepared to sell an asset for.
This is the price an investor is prepared to buy an asset for.
