How to trade on Forex market
Initially, the structure of the market Forex. Like all markets - Forex - set of buyers and sellers of currencies. Call them operators Forex. These are large banks of various countries, including - central banks, the largest investment companies, pension funds (most - North American). Operators are traded between different currencies, making the transaction. The minimum value (contract item) transactions - about 1 million U.S. dollars. Operators of linked special network that allows instant conduct a transaction. What is important is that this is not the physical movement of money, that is, if napimer, the Japanese bank will buy one billion pounds for yen at the London bank, no one will rush to ship them on a plane and sent under tight security in Japan. Really, why? After a day (or few minutes) Japanese bank to sell these pounds a German bank for the euro, and that - a London bank for the yen. Do not look for a special meaning here, no wrinkle brains - this is the problem of market operators. The main thing for us - a small investor to get into this market can not in any way. As he gets there?
Yes, indirectly, what else! Banks sell because why? Or on the instructions of their clients, or speculate (Incidentally, many Western banks is almost the main way of making a profit). Literally in the last 15 - 20 years have so-called brokers or brokers who are on the one hand, customers of operators Forex (banks), on the other hand, the possibility of providing small investor to carry out transactions of purchase and sale of currencies on the Forex market is relatively small lots (tens to hundreds of thousands of U.S. dollars).Here and henceforth I will devote special terms adopted for consideration of us. Try to memorize them at once.
It is now clear - in order to be able to trade in Forex, we need a firm - the broker with whom we signed a contract to grant us access to the settlement of transactions on the Forex.About brokers talk more later, and now must embrace the whole picture, the details can then be considered.We proceed to ascertain the most important - you need to contract with a broker and what we get from a broker? First - a small digression. I hope all readers will understand that to that - you get that first must be - then invest. Of zero is obtained only zero as you did not multiply. Trading on the forex market - type (or method) of investments for profit. Moreover, this species is different investments, on the one hand, potentially unlimited amount of profit, on the other hand, the increased risk. So, if you expect to just come somewhere, sign up for Forex (contract) and to trade profitably, keep these thoughts. But those who have a couple of hundred dollars and just wants them to increase, better go to the casino or spend the money on his girlfriend - good anymore. Work on Forex - work is serious, respected, and, perhaps, respectable, which requires certain financial investments.
So, to conclude a contract with a broker to open an account or have the broker or the bank. How to do this for money? To deal with this issue, find out what the "margin trading" - the most important concept is the foundation not only monetary, but also any other market.
Please read them carefully and think about what they read, as discussed will be very important concepts.Returning to the example, to exchange the item out of 5 chapters. You needed a loan 3.04 million rubles to exchange them for $ 100 000. You came to the creditor, and he said - if a profit - fine, but if the losses, who will fill them to me? Leave a pledge, for example, one hundredth of (30 rubles), will be formed if a loss - subtract the mortgage, the lender do not have to lose money if the profits - you will receive your deposit back after the loan repayment. Here is the pledge and called the margin requirements or margin (Margin). And the ratio of credit granted for the transaction to the margin of leverage (leverage), a stricter translation of the term - leverage ratio. It is now clear to make a deal with a lot USD100, 000 in arm 100 is required margin in 1000 U.S. dollars. All clear so far?
Lender is a broker for us, it determines the rules. Already developed, that the transaction be made the "standard" size lots of 100 thousand and 1 million units traded currency, and the broker provides a shoulder 50, 100, 200. The greater the leverage, the more lots you can throw on the market, the greater the profit, respectively, can get. But the likely loss in as many times as much, therefore, with greater leverage risks increase.
Let us continue the matter any further. Uncomfortable every time you open a position (the value of this term - a little later) to put margins on account of the broker, at closing - to shoot. It is not necessary. Each broker defined minimum trading account, usually ranging in size from 1 thousand to 10 thousand dollars, some brokers - from U.S. $ 100 000. Before you start trading you have to put on your trading account an amount not less than specified in the contract, as a minimum. A possible? This is a must. Why?
Suppose, under the terms of the broker - a minimum lot - 100 000, shoulder - 100, so the required margin - $ 1,000. This amount you and put into the account. Once you have opened a position, depending on the direction of the price (exchange rate) will produce a profit or loss. Well, everything is clear at a profit, but with a loss ... If you decide to close the position - the loss be debited from your account and to again enter the market, need to add the money up to $ 1,000. Uncomfortable, even technically, as long as you look for the money, enroll at the expense of - the law of the "sandwich" miss the beautiful movements of the market and, consequently, the ability to make money. But there are even more dangerous things. But first, let's deal with this important concept, as ekyuti (Equty), or floating deposit. Suppose you deposit $ 1,000. After opening a position at the right price is moving toward you and the position of the profit, say, 105 dollars. Summing up the profit on your deposit get 1105 dollars. It happens that produced a loss, for example - the same $ 105, but with a minus sign, then ekyuti - 895 dollars. Ekyuti - is the real thing is the cost of your deposit at this moment of time, such values will be your deposit if you immediately close all positions. Obviously, if there are no open positions, is ekyuti deposit.
So, the position is open, and the growing loss (by the way, the loss will be called the loss (Loss), profit - profit (profit). So loss is increasing, decreasing ekyuti. How long can this go on? After all, if your loss exceeds the deposit, losses will be the broker already, and that he can not afford. Therefore, there is a so-called stop level, I call it "hitchhike" in overcoming this level, the broker will automatically close your position. The value of this level is usually 10 - 20% margin so that after the "hitchhiking" on the deposit you will be less than $ 100. It's called - to burn the deposit, to depart from the market, we will not tolerate.'s always better to close a position, than to wait for "hitchhiking".
Let us, for example, to deposit $ 1,000. If you have not guessed the direction and decided to wait a losing wave (it is a feasible solution, most of the time the market "swings" around certain values of the price), then, at a cost of $ 10 item, you supply only about 90 points. This is a very small, and, most likely, you suffer the "hitchhiking". That is, you do not have room to maneuver in very small deposit, I call this game - "hang on nails over the abyss." It is very hard work, trust my experience, no one would stretch out a bill. More or less quiet operation begins when the three - five times the excess, normal operation (not tape) - with a ten-fold. That is, if you want to work in one lot with $ 1,000 margin should be at 3-5 thousand dollars account, optimally - 10 thousand dollars.It should be noted that if a trader is undisciplined, blindly repeating his mistakes, he slept a deposit of any size, even a million. The case when a bank manager has lost. So the margin is important for trade, but it determines the success or failure.
In conclusion, analyze another concept. I have already began to use these words: opening position, closing position. What does this mean? Purchase (or sell) on the terms of margin trading is opening a position. You received a loan and made the transaction. After the opening position due to movement of exchange rates, profit or loss are formed. While the position is open, you "are in the market." Mandatory condition of margin trading is a closing position, ie the transaction in the opposite direction on the same amount in the same currency, that is, if you bought at the opening position of $ 100,000 for the euro, closing entries have to sell 100,000 dollars per euro. At this point, the profit or loss is recorded on your deposit and you "get out" of the market.In the next chapter we will continue to consider the relationship between broker and client and get acquainted with the principal - c our "goods", so what are traded on the Forex.
Initially, the structure of the market Forex. Like all markets - Forex - set of buyers and sellers of currencies. Call them operators Forex. These are large banks of various countries, including - central banks, the largest investment companies, pension funds (most - North American). Operators are traded between different currencies, making the transaction. The minimum value (contract item) transactions - about 1 million U.S. dollars. Operators of linked special network that allows instant conduct a transaction. What is important is that this is not the physical movement of money, that is, if napimer, the Japanese bank will buy one billion pounds for yen at the London bank, no one will rush to ship them on a plane and sent under tight security in Japan. Really, why? After a day (or few minutes) Japanese bank to sell these pounds a German bank for the euro, and that - a London bank for the yen. Do not look for a special meaning here, no wrinkle brains - this is the problem of market operators. The main thing for us - a small investor to get into this market can not in any way. As he gets there?
Yes, indirectly, what else! Banks sell because why? Or on the instructions of their clients, or speculate (Incidentally, many Western banks is almost the main way of making a profit). Literally in the last 15 - 20 years have so-called brokers or brokers who are on the one hand, customers of operators Forex (banks), on the other hand, the possibility of providing small investor to carry out transactions of purchase and sale of currencies on the Forex market is relatively small lots (tens to hundreds of thousands of U.S. dollars).Here and henceforth I will devote special terms adopted for consideration of us. Try to memorize them at once.
It is now clear - in order to be able to trade in Forex, we need a firm - the broker with whom we signed a contract to grant us access to the settlement of transactions on the Forex.About brokers talk more later, and now must embrace the whole picture, the details can then be considered.We proceed to ascertain the most important - you need to contract with a broker and what we get from a broker? First - a small digression. I hope all readers will understand that to that - you get that first must be - then invest. Of zero is obtained only zero as you did not multiply. Trading on the forex market - type (or method) of investments for profit. Moreover, this species is different investments, on the one hand, potentially unlimited amount of profit, on the other hand, the increased risk. So, if you expect to just come somewhere, sign up for Forex (contract) and to trade profitably, keep these thoughts. But those who have a couple of hundred dollars and just wants them to increase, better go to the casino or spend the money on his girlfriend - good anymore. Work on Forex - work is serious, respected, and, perhaps, respectable, which requires certain financial investments.
So, to conclude a contract with a broker to open an account or have the broker or the bank. How to do this for money? To deal with this issue, find out what the "margin trading" - the most important concept is the foundation not only monetary, but also any other market.
Please read them carefully and think about what they read, as discussed will be very important concepts.Returning to the example, to exchange the item out of 5 chapters. You needed a loan 3.04 million rubles to exchange them for $ 100 000. You came to the creditor, and he said - if a profit - fine, but if the losses, who will fill them to me? Leave a pledge, for example, one hundredth of (30 rubles), will be formed if a loss - subtract the mortgage, the lender do not have to lose money if the profits - you will receive your deposit back after the loan repayment. Here is the pledge and called the margin requirements or margin (Margin). And the ratio of credit granted for the transaction to the margin of leverage (leverage), a stricter translation of the term - leverage ratio. It is now clear to make a deal with a lot USD100, 000 in arm 100 is required margin in 1000 U.S. dollars. All clear so far?
Lender is a broker for us, it determines the rules. Already developed, that the transaction be made the "standard" size lots of 100 thousand and 1 million units traded currency, and the broker provides a shoulder 50, 100, 200. The greater the leverage, the more lots you can throw on the market, the greater the profit, respectively, can get. But the likely loss in as many times as much, therefore, with greater leverage risks increase.
Let us continue the matter any further. Uncomfortable every time you open a position (the value of this term - a little later) to put margins on account of the broker, at closing - to shoot. It is not necessary. Each broker defined minimum trading account, usually ranging in size from 1 thousand to 10 thousand dollars, some brokers - from U.S. $ 100 000. Before you start trading you have to put on your trading account an amount not less than specified in the contract, as a minimum. A possible? This is a must. Why?
Suppose, under the terms of the broker - a minimum lot - 100 000, shoulder - 100, so the required margin - $ 1,000. This amount you and put into the account. Once you have opened a position, depending on the direction of the price (exchange rate) will produce a profit or loss. Well, everything is clear at a profit, but with a loss ... If you decide to close the position - the loss be debited from your account and to again enter the market, need to add the money up to $ 1,000. Uncomfortable, even technically, as long as you look for the money, enroll at the expense of - the law of the "sandwich" miss the beautiful movements of the market and, consequently, the ability to make money. But there are even more dangerous things. But first, let's deal with this important concept, as ekyuti (Equty), or floating deposit. Suppose you deposit $ 1,000. After opening a position at the right price is moving toward you and the position of the profit, say, 105 dollars. Summing up the profit on your deposit get 1105 dollars. It happens that produced a loss, for example - the same $ 105, but with a minus sign, then ekyuti - 895 dollars. Ekyuti - is the real thing is the cost of your deposit at this moment of time, such values will be your deposit if you immediately close all positions. Obviously, if there are no open positions, is ekyuti deposit.
So, the position is open, and the growing loss (by the way, the loss will be called the loss (Loss), profit - profit (profit). So loss is increasing, decreasing ekyuti. How long can this go on? After all, if your loss exceeds the deposit, losses will be the broker already, and that he can not afford. Therefore, there is a so-called stop level, I call it "hitchhike" in overcoming this level, the broker will automatically close your position. The value of this level is usually 10 - 20% margin so that after the "hitchhiking" on the deposit you will be less than $ 100. It's called - to burn the deposit, to depart from the market, we will not tolerate.'s always better to close a position, than to wait for "hitchhiking".
Let us, for example, to deposit $ 1,000. If you have not guessed the direction and decided to wait a losing wave (it is a feasible solution, most of the time the market "swings" around certain values of the price), then, at a cost of $ 10 item, you supply only about 90 points. This is a very small, and, most likely, you suffer the "hitchhiking". That is, you do not have room to maneuver in very small deposit, I call this game - "hang on nails over the abyss." It is very hard work, trust my experience, no one would stretch out a bill. More or less quiet operation begins when the three - five times the excess, normal operation (not tape) - with a ten-fold. That is, if you want to work in one lot with $ 1,000 margin should be at 3-5 thousand dollars account, optimally - 10 thousand dollars.It should be noted that if a trader is undisciplined, blindly repeating his mistakes, he slept a deposit of any size, even a million. The case when a bank manager has lost. So the margin is important for trade, but it determines the success or failure.
In conclusion, analyze another concept. I have already began to use these words: opening position, closing position. What does this mean? Purchase (or sell) on the terms of margin trading is opening a position. You received a loan and made the transaction. After the opening position due to movement of exchange rates, profit or loss are formed. While the position is open, you "are in the market." Mandatory condition of margin trading is a closing position, ie the transaction in the opposite direction on the same amount in the same currency, that is, if you bought at the opening position of $ 100,000 for the euro, closing entries have to sell 100,000 dollars per euro. At this point, the profit or loss is recorded on your deposit and you "get out" of the market.In the next chapter we will continue to consider the relationship between broker and client and get acquainted with the principal - c our "goods", so what are traded on the Forex.
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