How to understand the Interbank foreign exchange market?
to understand the Interbank foreign exchange market, it is necessary to know first of all what is it, than there trade, and the basic concepts accepted in his environment.
So what is the Interbank foreign exchange market? It is the market once created for various operations on currency exchange among banks. The reason of its education was the fact that the US dollar ceased to be provided with gold. Therefore, its price did not depend on the price of this metal more. But we will not press in history.
Trade in this market in currency or monetary units of the different countries. And its popularity is caused by several factors:
1. High liquidity, i.e. price. The knowing people earn solid money.
2. Reliability. This factor is caused, first of all, by the fact that solid brokers and competent investors store money in banks with a class AAA rating. For comparison: Sberbank has V.`s
3 rating. Availability. Any who has the sum of $3 000 - 5 000 can participate in the auction in this market.
4. Lack of taxes. It is very unexpected and pleasant, but in a number of the countries, including and in Russia, this type of income is not taxed.
5. Kruglosutochnost. At any moment, in any country of the world money is necessary. Geography at our world round-the-clock, without lunch breaks and a dream.
Will or bondage, but participants of a similar live exchange became:
1. Exporters and importers. This category participates more likely involuntarily. Just they need to exchange currency, respectively, to buy - to sell and by that to raise and lower supply and demand.
2. Large banks. To them - that god ordered, for them the market also was created.
3. Investors. It is a little of them, but the capitals at them big, here also influence they policy of the market well.
4. Speculators. These are those who have sums and small turns, but they exert impact on the market the mass character. There is a lot of them.
In the foreign exchange market it is possible to sell and buy any currency, but there are also those which are the main :
1. USD - US dollar.
2. EUR - euro.
3. GBP - the British pound sterling.
4. CHF - Swiss franc.
5. JPY - the Japanese yen.
6. AUD - dollar of Australia.
7. NZD - dollar of New Zealand.
8. CAD - dollar of Canada.
Any trade in currency is possible only in couple, i.e. currency of one country and currency another.
There is such concept as the main couples is:
And cross-country - couples :
4. If we take GBP/JPY
I any couple, for example, of EUR/USD, then the first currency in couple will be considered basic, and the second as quoted. The quotation is the price, i.e. the price of monetary unit of one country expressed through monetary unit of other country. In this case the price of euro is a certain quantity of US dollars.
It is only necessary to remember that all operations in the foreign exchange market are made with basic currency .
Still there is such concept as point . Point is minimum possible change in price. Let`s give a simple example. The handle costs 12 rubles 16 kopeks. Minimum possible change of its price of 1 kopek.
The price of euro is equal in EUR/USD steam, we will present, 1,3171 dollars. The last figure after a comma will also be point, i.e. minimum possible change in price of euro 0,0001 dollars.
In the market one point is equal to ten dollars. So if your position grew by one point, so you earned ten dollars. Fell - lost.
In order that something to buy or sell , two short concepts are used:
1. To buy - Buy, or to rise in a long position (long).
2. To sell - Sell, or to rise in a short position (short).
The minimum size of the contract , i.e. the quantity of the bought currency, makes of 100 000 basic units and this Lot is called. You ask how we can buy 100 000 euros if on our account of only $5 000. Everything is simple.
The matter is that banks provide us leverage. For 1 our dollar give us 100. However to get on credit all of us - cannot. At the conclusion of the transaction we give marginal providing, i.e. some quantity of our means. If we earn from the transaction, then our means remain with us and to the sum of our account the sum earned increases. If we for any reasons incur losses, then as soon as the sum of losses brings closer our account to zero, all our transactions are automatically closed. It turns out that we it seems as well as borrow, but we remain at the.
The only thing that we pay, it is some percent and the commissions to banks for transactions.
Spread - the transaction commission of bank, or is a difference between courses towards purchase and towards sale.
A swap - percent of bank for transfer of a position next day.
All this can seem difficult, but until you begin to study a subject. Good luck be also reasonable.