Forex international exchange market represents a particular version of the world financial market. The Forex traders (traders, market participants, able to present some company or trade at their own cost) are targeted to make a profit as a result of the purchase and sale of a foreign currency.
All currencies exchange rate, which is in the market turnover, change continuously due to the demand and supply fluctuations, influenced significantly by any essential events for a human community in economic, political and environmental sectors. Consequently, the foreign currency price moves one or another way, for instance, dollar-denominated.
Using this movement with the common Forex market
cliché «Buy cheap, sell expensive», the traders draw income. The Forex market
may be distinguished among other financial market sectors because of a fast
reaction to the tearing dynamics of
numerous externalities:
-
immensely
high trade transactions easy of access for any singular or company-wide players, which ensures the currency turn-round
liquidity (a possibility of purchase or sale execution of any currency or other
financial assets in demanded volume).
-
24-hour
performance, enabling the traders to work out of usual operating bounds and
during the national holidays in their countries, using foreign markets working
at this time.
As it happens in any other market,
in addition to the extremely high profitableness of the Forex trading, it is
interfaced to a great risk. The advancement may be achieved only in the case of
obtaining a certain background, including the familiarization with the Forex
variability and structure, the currency price-setting policy, the factor
influencing the price and risk level adjustments during the deals, information
provider for recording these agencies, analysis and market trends forecast
methods, the trading guidance and
instruments.
During the preparation, the period before the trading on Forex, training on demo accounts is of a great
concern, that allows to adapt the gained theoretical skills in practice and
acquire the trading experience minimum without any pecuniary losses.
The currency exchange
has a centuries-long history coming from the Ancient East. In the Middle Ages, the period began the eventual currency market build-up when the emerged
international banks introduced the exchange payment facilities, available for
third parties that improved the flexibility and the trading deals quantity.
A rapid industrial and commercial development in Mediaeval
In Medieval
It was more compound to determine the quotations of gold and silver
coins. A bullion dealer should concatenate the gold and silver prices quickly
and correctly.
Local gold and silver prices adjustments made it possible to carry on arbitrage operations. The earning capacity from the arb business was measured by exchange transactions volume and accuracy of the information, held by a jeweller.
The calculation errors were unlucrative for a money jobber, so the raising of weighting process precision was indispensable for further professional improvement. It’s interesting to know that the word “burse” came out from the Italian word «boro» meaning the wallet of moneychanger.
Using a
modern economic language, the exchange transactions of medieval jewellers were arranged
in the form of a dealer market, which remains in force till now and performs as
an OTC (over-the-counter) market - an alternate exchanging
market.
An existent currency the market took shape in the late 18th century and was juristically confirmed in
The exchange rate was almost fixed. A major currency turned out to be the British pound.
The Paris Agreement period left its mark in the form of “Gold Standard” in the history of currency
system development.
Owing to the monetary system
expanding in
The FOREX market improved further de facto in the early 70-s when almost all leading capitalistic countries began using a floating rate.
In 1976 on
The FOREX market is a decentralized system consolidating
all the participants by various connection means. With the development of
advanced telecommunication resources apart from traditional phone dealing also
emerged the electronic dealing systems. (The first electronic dealing system
was developed by REUTERS Company in 1981). Nowadays, there is a great variety
of trading systems using satellite-assisted information channels and the Internet means.
The present FOREX market insiders may be classified in
the following way:
Central banks:
-
FED - the
Federal Reserve System of the
-
ECB
– the European Central Bank;
-
BoE
– Bank of England, the oldest bank in the world (“Old Lady”);
-
BoJ
– Bank of
-
BB
– Deutsche Bundesbank of
-
BoF – Bank of France;
-
BoC
– Bank of Canada etc.
Commercial banks:
Banks-market makers (banks, which “make” the market,
the price set is made up by reference to their quotations) are actively
engaged with the market not only concerning the clients’ requests but also
accomplishing its own strategies.
Banks-market users (banks using market rates) basically
specialize in work on clients’ requests.
The biggest among them are:
CitiGroup (USA), HSBC (UK), Deutsche Bank (
Bourses:
-
NZХ –
-
ASX
– Australian Securities Exchange;
-
TSE –
-
HKE
-
-
SES
- Stock Exchange of
-
DBG
–
-
TLSE
-
-
SWX -
Swiss Stock Exchange;
-
PSE -
-
LSE -
-
NYSE
-
-
CHX - Chicago Stock Exchange;
- PCX - Pacific Exchange
Financial institutions:
Different consulting organizations, mutual funds and hedging companies.
Transnational companies: XEROX, IBM, CrowCork etc.
Non-institutional investors: charitable trusts and copartnerships.
Brokerage/Dealing service – firms, carrying out the trading mediation at its own costs and on its own behalf, the client base consists mostly of private investors.
Worth pointing out that the last 4 items are working
through their banks for the most part.
The Forex market is in operation day and night from
FOREX market working hours (24
hours a day)
|
Location |
City |
Opening time |
Closing time |
|
ASIA |
|
03:00 |
12:00 |
|
|
04:00 |
13:00 |
|
|
Singapore |
04:00 |
12:00 |
|
|
EUROPA |
|
09:00 |
17:00 |
|
|
10:00 |
18:00 |
|
|
AMERICA |
|
16:00 |
24:00 |
|
|
17:00 |
01:00 |
|
|
PACIFIC |
Wellington |
00:00 |
08:00 |
|
|
01:00 |
09:00 |
More detailed information - at our website in the
Financial world rings section:
http://instaforex.com/clocks.php?lang=en
The market activity is differential, the most
aggressive are American and Asian sessions and the biggest trading volume is
recorded in the European one.
It is due to that during these sessions there are not many participants in the market, most of the – Australian and NZ banks and financial organizations.
With the Asian session opening the situation becomes
more intense, where the yen is a dominating currency and economic climate news
from
The main European session events take their rise in
But the most essential doings take place in the American trading arena, where a great many market participants get their long-awaited data. As a rule, these news has a deep influence on the traders and on the currency rates, consequently.
Facing the financial markets concepts and opportunity
of gaining from trading with assets, a lot of people put a question – whether
everybody can assimilate this wisdom, will I be able to become a successful
trader and earn my living by this activity. To answer these questions here is
an example, known worldwide:
In late
To catch on the sensationalism of this advertisement it should be taken into account that Richard was entitled the "Prince of the Pit" (Pit - a section of an exchange where trading in a specific commodity is carried on.) He began trading when he was 17 with a start-up capital of $1200 and at 25 he made up his first million.
Dennis chose 14 persons out of those who came – among them was an actor, a guardian, two professional card players, a low-paid accountant, a pair of not too lucky traders, a financial consultant, a boy who has just left school, a woman – former bourse clerk and even a fantasy games designer.
During two weeks Richard was teaching the future traders, after that he allocated a limit for trading out of his company’s capital. That was the beginning of Turtles history. And it is legendary. All of these people without exceptions managed to earn millions. They had become extremely successful traders. All of them opened their own firms, operating with more than 1 million dollar capital.
Turtles came into being after a bet between two traders. The dispute core consisted in, whether it is possible to learn to trade. Two old friends and business partners were arguing, one considered that for profitable trading, a person must have some kind of sixth sense, like an animal instinct for-profit and the other one considered everything to be more simple with the trading methods, which can be passed from one prosperous trader to another.
They were arguing for several years until they made a bet
on $1. They decided to form a group of people and teach them everything they
know. The results of these newly trained specialists were to give an answer to
the question – is it possible to learn how to conduct advantageous trading.
The end of the experiment was described earlier and this history has become incontrovertible evidence of some facts:
Firstly, an auspicious trade doesn’t depend on
inherent peculiarities, to the contrary, every person has an opportunity to
trade profitably having just average intellectual faculties – more essential is
to have a good teacher.
Secondly, a recipe for success lies in a consequent
following the profit strategy, where a consequence performs as a determinant
factor.
A knowledge necessity, at least concerning the main
financial markets principles are indisputable.
Even if a person doesn’t aim to be a trader in the future, in any case, he has to know what is it a price trend, which financial instruments exist, how to hedge currency risk and many other issues, which are used on Forex and in all financial market sectors.
It’s impossible to
overestimate these skills, often happens when accomplished businessmen ask
about – how to avoid the losses, emerging from rising or fall of currencies, how
to develop a hedging strategy, how to comprehend this or that nuance of the
financial market etc.
This course, alongside an opportunity of
obtaining a new trader specialization, also oriented to carry out one of the
most goals of our company – to help a person gain knowledge in the financial
markets field, which will increase confidence while sorting out the financial
issues across the board.
A broker appears to be a stakeholder between you and a market. An entrance to the financial market without a broker is almost impossible.
Trading at the stock exchange is also impossible – the
bourse accredits as its participants only certified individuals and corporate
bodies checked up by the supervisory authorities. As a private individual, you can sell and buy the stocks only amid these companies’ broking.
A trader usually cooperates with his broker using the trading terminal – a program installed on the computer connecting to the Internet. This gives a trader full information support (quotations, news), an opportunity of making deals with different financial instruments and receiving closed deals data, orders data etc. The convenience of using the trading terminal is one of the crucial factors in choosing a broker. Nowadays, most of all broker operates with MetaTrader4 terminal. The terminal provides means of settling the bargains with the help of the Internet, obtain the rates online, look through the history of opened positions, deals and orders, monitor the situation at the graphs using the technical indicators and many other facilities.
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