Probably, you had such impression that exchange trade is a big hall, as in the American films where shout and stockbrokers rush about to seize a titbit. But for today it is not anymore that system – the markets have united also system became electronic that allows to make operation (purchase and sale) for few seconds and from different corners of light thanks to the computer trading terminals united by the Internet. Such is a principle of work of world currency market Forex (Foreign exchange market).
Forex gives the chance to earn and not only to earn but to make so that money worked without you.
Forex is the world currency market which has resulted change of stable rates of exchange swimming. Market Forex has no certain place of trade and operations can be made round the clock. Simultaneously transactions can be made in hundreds banks all over the world. In trading operations by the basic currencies the US dollar, euro, the Swiss franc, English pound sterling, Japanese yen are. Work in market Forex consists in buying currency more cheaply, and to sell more expensively. Insignificant fluctuations of currencies give the chance to get high profit.
If earlier Forex was inaccessible to “mere mortals” in connection with a high financial introductory threshold (to open the account at the broker, the minimum sum which was necessary for bringing on the deposit, made $1.000 and more) now joins currency gamble almost any person (many brokers give access to the currency market with the deposit from one dollar) can. On the one hand, yes, Forex became more accessible to beginning traders (after all to allocate from the budget of $1, I think, presumes everyone); from other party, it has led to that on Forex began to appear much more laymans who concern the currency market simply as to gambling. As a result, they, certainly, lose the cheap deposits and start to say at every turn that all Forex is a deceit, continuous fraud, etc. Actually, to achieve success on Forex, it is necessary to be engaged not one hour to understand how the system works and will start to earn. Therefore it is necessary to have patience and understand financial definitions to begin with.
The rate of exchange is the price of monetary unit of one country in relation to monetary unit of other country at the purchase and sale transaction.
The currency quotation is fixing of one currency in relation to another according to operating legislative norms.
Currency quotations happen the following:
Straight line is quantity of units of national currency for one unit of foreign currency.
Return is quantity of units of foreign currency for one unit of national currency.
Cross-rate is a course parity between two currencies, defined on the basis of a course of these currencies in relation to thirds to currency. Thirds currency, basically, the US dollar acts.
Currency pair is record of the currency quotation.
The base currency (traded currency) in each currency pair registers the first.
The quoted currency in each currency pair registers the second.
Point (pips) is an admissible minimum of instability of prices. For example, the prices with 1,3565 to 1,3570 – fluctuation is equal 5 pips.
Spread is a difference between purchase price and selling. For example, 1,4658/1,4651=7 pips.
ASK – a course on which the bank sells base currency. For example, at quotation USD/CHF=1,4670/75 at the rate of 1,4675 (ask) sale of dollars by bank or purchase of dollars by the client is carried out.
BID – a course on which the bank buys base currency. For example, at quotation USD/CHF=1,4670/75 at the rate of 1,4670 (bid) purchase of dollars by bank or sale of dollars by the client is carried out.
Margin is demanded cash security for support of open positions.
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