Currency market in context from Uncle Sasha. The CIA - the foreign exchange market in the context. How the Forex currency market works

The variability of the exchange rate (volatility) and the high liquidity of the foreign exchange market are a powerful attractive force that allows Forex players to feel free and obtain significant income in a short time. And since it is possible to extract profits both at the increase and on the decline in exchange rates, even in the period economic recession A talented trader is able to secure a stable income.

But we should not forget that the greater the potential benefit, the higher the risks, and in the absence of proper excerpt, knowledge and experience can be left at a broken trough.

How the Forex currency market works

International monetary forex market (FX) is a platform for free exchange of currencies and profit from the course difference. Changes in courses are regulated only by supply and demand. Forex is not tied to any geographic point and works around the clock.

The daily turnover of the Forex currency market exceeds four trillion dollars. The main currencies used are American dollar, euro, pound sterling, yen and swiss franc. Operations on financial trading platforms are among the main sources of income of the world's largest financial institutions. In particular, up to 80% of the profits of the famous Swiss bank Union Bank of Switzerland provide trading on Forex.

Main participants in trading processes - commercial and central banks, investment funds, companies that are engaged in import and export, transnational corporations, national stock exchanges, brokers (mediators between buyers and sellers who receive interest from transactions), dealers and individuals who carry out financial operations In order to extract profits (traders).

It is believed that in our time everyone can realize himself as a trader. Indeed, this does not require a diploma, only analytical abilities are needed, the ability to "feel" market changes, and also need a deposit - start-up capital, minimum size which is determined by the broker.

This statement is true, and erroneously simultaneously. Despite the fact that any adult citizen without a diploma of economic education can become a trader, the player should take care of his continuous profile training (usually by self-education) and increasing experience.

The main advantages of the world foreign exchange market Forex are high liquidity and globality. For a trader, there is another important advantage of trading on Forex - the presence of a leverage provided by brokers. The leverage allows you to carry out operations in the absence of the required amount or to increase the transaction volume in order to increase your potential benefits (but at the same time - and risk!) From the difference of the exchange rate. Naturally, the more the amount spent, the topics and the winning (or loss) will be more significant.

Acquaintance with the forex currency market: Tools Trader

Acquaintance with the forex currency market begins with the study of basic concepts and trade tools. The success or failure of the trader directly depends on the ability to analyze the current market situation and competently build the game strategy.

Transactions

The main tool of any business is the transaction. Forex is no exception, there are several own, specific, types of transactions on this over-the-counter foreign exchange market. Consider the Toolkit of the trader.

• Spot - instant transaction, but in interbank practice the calculation on it is made in Real Currency for up to two days. Therefore, a spot deal also carries the name "Cash", "Cash", "T + 2" (Time + 2 days). The varieties of spot transactions also include TOD (Today - today) and Tom (Tomorrow - tomorrow). The exchange rate is fixed At the time of the conclusion of the transaction , not on the day of delivery of the currency - "Today", "Tomorrow", "on the second day". Present Current Conversion operations ("spot"), as well as all other types of currency transactions are carried out by non-cash and even a virtual method, although the meaning of transactions and their terminology on the spot market remained the same.
  In this way, Spot price (or Spot-course) - This is the price of real goods (currency) sold here and now on the terms Immediate fulfillment of obligations (supplies). The spot rate is determined automatically as a result of trading, but may be negotiated individually counterparties - participants in the currency exchange agreement. This happens when performing particularly large transactions.

The term "urgent market" - does not carry the meaning of "immediate", on the contrary, he suggests that all transactions in this market are committed with a deferment of the fulfillment of obligations (delivery of currency) for more than two days. This urgent market is opposed to a spot market involving the immediate fulfillment of obligations. Tools game on urgent market, or types of transactions (contracts), are forwards, futures, options and other derivatives.

• Forward - Trade tool in the Forex market, which suggests fixing the currency rate to the future date (supply). As a transaction (contract) striker cannot be broken, and is required to execute under established conditions. That is, by the time of fulfillment of obligations, the currency rate may change to a large or smaller side, but regardless of this, the exchange will be made at the rate at the time of the conclusion of the transaction. The transaction can be concluded for a period of 3 days to 5 years. The participant gets the opportunity to pick up money only after this period is expired. Forwards are to play on the difference of exchange rates, they not Standardized and used in over-the-counter markets, and therefore less liquid than other types of transactions.
  Forward-price (forward-course) , usually always above spot prices (spot course), because until the calculations can be put up, relatively speaking, deposit to the bank where additional interest on the amount of the contract. The size of the forward price is calculated by two methods: either by adding a premium to a spot price or subtraction from the spot price of the discount. But first it is necessary to determine the size of a premium or discount:
  Where: P is a bonus; D - discount; S ($ / €) - current spot course (price); R €, R $ - percentage banknotes on deposits in currency € and $, respectively (or in currencies from any other currency pools); n - the validity of the forward transaction.

  In special newsletters you can find forward courses for different dates, already calculated using interest rates LIBER. For analyzing and comparing the effectiveness of investment in forward-price at the international and domestic foreign exchange markets, the forward course can be defined as the ratio of interest rates taken on the interbank loan multiplied by the spot course.
  

  

  Where: Fn ($ / €) is a currency forward course (price); S ($ / €) - current spot course (price); R is the interest rate at the interbank domestic market; L - Interbank bid LIBOR.
• Futures (Zharg. - "Fuche") . A similar deal has similarities with forward, moreover - this is a type of striker with the difference that she Standardized According to the size and timing of circulation and wears a repeating, not one-time (unique) character. Futures means the exchange of concrete currencies on a particular day at a predetermined course. Futures transactions are concluded for individual lots. If necessary, the right to futures can be resold to another person. Currency futures have differences from currency pairs in the form of a ticker, a trading platform and the date of the expiration of the contract, they allow you to analyze the volume exchange tradesthat in itself very valuable. In other aspects, they are identical to the currency pair - even the futures schedule repeats the currency pair schedule.
  Futures price Based on the price of striker and spot and is usually identical to the first, if it does not distort the differences in tax legislation different countries, Warranty payments and some other factors. The difference between the spot price and the price of futures is customary to be called a "basis" or "base", which are usually positive (the state of "Contango"), but may also take a negative value (the state of the backfall). The situation of backfills occurs when the price of futures turns out to be below spot prices.
  Historically, the futures price is expressed in US dollars, more precisely - these transactions are held in global currencies to the dollar. In addition to Forex, futures are widely addressed on Chicago sites (Matif), Singapore (Simex), Tokyo (TIFF), London (Liffe), Toronta (TFE) and Sydney (SFE), used in interbank trading ( OVER-THE-COUNTER).
• Option - This is a kind of "deal on the transaction." Or rather - the provision of its buyer's option to the seller of the option, or the rights (but not obligations!), Conclude a specific deal on a deliberately agreed currency rate at the set date or period of time. At the same time, the seller of such a right (contract) takes a complete obligation to make a deal according to the terms of the option, and the trader, at its own discretion, may not be used by the bought right.
  Considering that the transaction can wear a multidirectional character, FX-options are for sale ( Put Option) - are purchased in anticipation of the fall of the currency pair price, or on the purchase ( Call Option) - in demand with the estimated growth of its prices, as well as bilateral ( Double Option). There are also exotic types of contracts for a transaction, such as barrier options ( Barrier Options.), also called trigger, or options with obstacles. Their essence lies in the fact that payments for these contracts "are included" ( Knock-in) When a trigger point is reached - a certain level of the base asset price, and "switched out" ( Knock-Out.) - When falling the price of the basic asset. Basic asset may be a currency pair. Barrier Options and their variations (Up & In, Up & Out, Down & In, Down & Out) make it possible to build complex and incredibly complex market strategies (for example, a "bull spread"), which are used by sophisticated traders.
  FX options are a more liquid tool than stock options, since the Forex meets contracts in the length of just a few days, while the Execution timing can reach many months. At the retail level of Forex, they became available to traders only in 2009. Options, from the point of view of the dates of the currency (execution of obligations), are distributed during the year by month of delivery, and contracts with the most close to the closure month accounts for the maximum activity of the Forex market. In this context, the options market begins to behave as a spot. And if you have a desire to keep the position of the couple, say USD / EUR after June, then you will have to sell it and simultaneously buy July USD / EUR. There are no reasons for spot transactions for this, since all positions are transferred to the next business day by automatt due to overnight (see below).
  The profit of the Seller's option (ratera) is a premium paid by the buyer for the opportunity to take advantage of a beneficial transaction, the size of which, in turn, changes on the basis of market conditions. The main plus for the buyer of the option is that the risk is limited to the option price, minus - which is paid to the premium for the transfer of this risk to the other party. In this key, options can be viewed as a kind of insurance policy.
  So, FX options are used not only as a trading tool, but also an insurance tool (hedge) to control the risk in cash transaction.
• Currency swap , or Roll-Over, StoreJ, Overnight . In its essence is monetary operation In the Forex market, not a conversion transaction, although it looks like that. It is the simultaneous purchase and sale of currency on equivalent The amount, but with two different dates of the currency (duration of delivery of currency, fulfillment of obligations).
  An example of a standard swap: Counterparty (Bank, broker, trader) bought 1 million EUR against USD on a spot currency conditions (immediately, up to two days) and simultaneously sold it on a three-month striker, that is, produced three-month EUR swap in USD. Here the goal is the ability to "step over night" - hence the name Overnight - through a trading session, through the end of the delivery time, Saving a trading position and also reduce currency risks, reduce costs on the loan money In another currency. The swap operations are predominantly large market players.
  And it is important to understand the ordinary trader to understand that these operations pass in automatic mode at 21:00 on Greenwich through the broker using the installed trading platform and for the client are practically imperceptible - everything looks like a continuation of the rates. As a result, the currency swap (overnight) is the funds held or added to the client (depends on the difference in interest rates in various currencies) for prolongation (transfer) of unclosed position the next day. In many brokerage companies, this service has a fixed fee, which stimulates customers (traders) to keep short strategies and close positions during the day. By itself that overnight can be held only if you use credit shoulder, i.e credit funds Broker, and not completely with its own money.

So, only when you first get acquainted, the above types of transactions and operations may seem intimidating. In fact, they are quite simple, although they will have to spend some time on their assimilation, carefully working on the demosachete to get used to and get used. It is much more difficult for the case of the skills of analyzing the market situation and the development of a trading strategy, especially using FX options. Since Forex by definition is a spot market (over 90% of all transactions are closed within 48 hours), then the start of any operations follows from spot transactions. And to open positions in the derivative market, also part of Forex, where forwards, futures, options and other types of derivatives, better after a couple of years, when personal professional experience is accumulated.

Analysis

To conclude transactions with maximum benefits, it is important to understand how the Forex currency market works, which is part of the global financial and economic system. Beginning trader needs to pay attention Fundamental (Fa) and Technical analysis (TA) .

The first of them involves the study of relationships economic processesrequires knowledge of deep bases global economy and politicians. A trading participant needs to know how macroeconomic and inseparably associated political factors affect the situation in the economy of individual countries and regions, to take into account that the defining effects may have force majeure circumstances (natural and technogenic cataclysms, terrorist attacks, local wars, political coup. ) And the psychology of the masses (expectations, rumors, self-feeding panic sentiment).

The fundamental difference between the fundamental analysis from the technical consists in the approach: FA proceeds from the fact that the cost of currencies, like any product, is regulated by the law of supply and demand. And supply and supply depend on a number of fundamental economic factors: states and growth national Economy, changes in the accounting rate and monetary policy, trade dynamics, the policies of the Central Bank, etc. Consequently, the cost of currencies can be influenced by certain economic and political measures. For FA, indicators are not in absolute, but in relative terms, that is, consumer price and mood indices, labor prices, unemployment, GDP growth and others. In order to predict the Forex market, the most important events and news (expected and planned, unexpected and random ), which can be:

• trade and economic and political negotiations;
• agreements and solutions of interstate and sectoral unions, alliances, cartels;
• meetings of the Fed and other central banks;
• statements leading public faces on economic I. political topic;
• performances, reports and forecasts of leading economists, political scientists, rating agencies, large commercial banks, etc.

The national economy has one important property: it is inertia and cannot quickly slow down, turn around or accelerate, reminding severe icebreaker. But the prerequisites for future phenomena are laid today. Therefore, the FA is needed when building medium and long-term trading strategies At Forex, which simply impossible to be implemented without it.

To carry out the FA, it is required to "include a filter" and understand the true significance of the events occurring - one of them, seemingly decisive, may not have any effect on the movement of currencies, others, almost invisible, can lead to reversal of existing trends. This is a complex task requiring extremely high qualifications - understanding of the communication channels and the mutual influence of currencies and competing with them investment instruments, the historical development of interstate relations and national monetary systems - therefore, the FA may afford only major participants in Forex market: banks, investment funds, transnational corporations, some brokerage companies and outstanding traders.

But even if you have the necessary experience and education necessary for FA, this will be not enough. Fa is not applicable and even useless for short-term and outdoor strategies By virtue of the above factors. And for the game in the "long", in addition to knowledge and skills, there is a significant capital to put the stop orders for the months and to endure losses in open positions in several figures on the chart, which is meant by the use of long-term trends.

But the technical analysis doctrine is diametrically the opposite of the FA and extremely laconic: a real-time schedule for currency price changes already takes into account The factors of influence described above are economic, political and psychological, and therefore, for success, it should be simply analyzed by this schedule. It shows a retrospective of price movement and contains all the necessary prompts (signals) in relation to the change of trends (bovine, bearish, side, etc.). Since, according to the postulate, the psychology of the crowd is stable, its past behavior is repeated in the future and is reflected in certain graphic figures of the graph, the nature of its movement. The trader with the help of the rich toolkit ("Waves of Elliott", "Japanese candles", MACD, RSI, etc.) must choose the prediction horizon, in this time cut correctly build a trend, determine its strength and points of the possible reversal, and therefore - Market entry points and closing transactions. As a result of technical forx analysis There is an opportunity to say when, in what borders and with what probability there will be a change of trend, how much will the new direction of price movement will last.

The information base of analysts are graphical and mathematical means to analyze the dynamics of prices, as well as statistical data and principles of probability theory. Graphic display of the price can be represented in the form of graphs, histograms, charts and "Japanese candles".

The beginning of the trader is important not only to know the basics of analysis, but also use the complex tool available, and first of all indicators based on algorithms that allow calculating fluctuations market prices. The indicator gives the trader the opportunity to go into auction with the smallest risk and timely close the position. Of course, the use of indicators cannot give and does not allow one hundred percent warranty of success, but allows you to minimize possible losses. The main advantage of the indicators is that they are eliminated from the need to carry out the calculations manually, but these are capable of putting the vigilance of the trader.

There is a huge number of copyright indicators, but MACD is the most popular ones and the most popular ones (uses three medium sliding), "Intoku" (uses five lines), RSI (determines the trend force and the likelihood of its change) and ADX (trend pointer).

So, fundamental and technical tests, on the one hand, are antipodes, on the other, are inextricably linked and complemented by each other. Technical analysisAs a small evil dog, trying to reject the postulates of fundamental analysis, which, in turn, does not comment in any way comment on the technical analysis tools. It is like in physics: the laws of micro and macromir - they differ, and sometimes mutually contradict, but at the same time act in a single space and time. In any case, the trader has no other means except for that when playing short distances, and there is nothing better than the FA when building long-term strategies.

Strategy

Prerequisite successful trading For Forex is the right building tactics of your actions. Knowledge of strategies facilitates the understanding of the market and the peculiarities of its movement, and accordingly, helps to choose the right time and direction of opening the transaction. Strategies are simple (based on the rules of entry on Forex and exit from it), as well as indicator (their base is the interaction of indicators) and non-symcable (based on graphic elements, their indicator is the price).

Indicator strategies Most convenient for beginners, as the forecasts for changing courses are generated automatically. Traders in this case line up their own trading scheme based on multiple indicators. However, it is important for beginners not to get involved and use no more than three-five indicators, because otherwise variables for analysis becomes too much.

The main advantage of unconishing strategies is the ability to effectively predict price changes, and accordingly, high profitability at minimum risks. However, the use of this strategy requires certain skills and composure. Experts recommend running it during the period of the weak motion of the market.

There are also processed strategies that are based on the principle of a breakdown of maxima and minima costs, and strategies on Martingale, which implies the simultaneous conclusion of several multidirectional transactions with a magnifying lot.

From non-professional people or frank fraudsters, you can hear that some definite strategies for Forex trading are win-win, since even several unprofitable deals will be achieved by a general positive result. This is not true. There are no universal strategies, as well as common conditions for their use.

For successful trading, it is necessary to own two and more strategies and skillfully apply them. The most popular of them can be attributed to:

• Strategy for ADX and MACD Indicators . Simple strategyin which the indicators of the MACD indicator are used as indicators of the trading direction (price schedule in this case is not used). Ideal for a 15-minute price graph;
• Strategy "Scroll nails" . In this universal strategy, Parabolik indicators, Awesome Oscillator and Accelerator Oscillator are used;
• Skalping Strategy "Waves MA" characterized by simplicity and aesthetics. It is based on the MOVING AVERAGE indicators. The work is carried out by major trading pairs with a reduced spread (up to 1.5-2 on four-digit quotes);
• The7 Strategy for Day Charts characterized by simplicity and power. A moving average and cost schedule are used for operation.

Software

Analysis large number Information and efficiency of actions in the foreign exchange market are ensured by special applications for PCs and mobile devices. These software are called trading platformsAnd their user applications are terminals. They are supplied with tools for conducting technical analysis, news ribbon and various options. The most popular platforms - MetaTrader 4. and 5, MetaStock. and OmegaReSearchProsuite 2000i. . Many traders use several terminals at the same time, which expands the possibilities for technical and fundamental analyzes, but we do not advise to act in a similar way. At least until you reach a certain professional level.

Although the capabilities of the platforms are quite wide, the traders do not always happen to be enough. For comfortable work on Forex, special scripts are intended - small programs that allow you to set postponed orders, to simultaneously close all orders, calculate the level without loss, manage open positions and perform other operations.

Always be aware of Forex news allow the site informers. From these self-renewable sources, you can learn about the course of trading and income of large companies, as well as obtain an analysis of currency pairs, shares and indices.

Finally, Demoschet. Brokers usually offer the opportunity to get acquainted with the trading terminal, analyzing tools and transactions on Forex using the discovery of a demomachete, which allows you to train on the market with the same software functionality, but without real money investments.

Books I. information portals About currency market

Trading in the foreign exchange market Forex provides continuous development - expansion of the knowledge base and skills. Experienced players are constantly learning specialized literature, forums and blogs. Newbie should be started with acquaintance with works who have been classic, for example, under the authorship of Alexander Elder ("How to play and win on the stock exchange", "Trading with Dr. Elder: Encyclopedia of the Exciko game", "Basics of Exchange Trade"), John Morphy ("Technical Analysis Futures Markets: Theory and Practice "), Lewis Borsselino (" Datejiding Textbook "," Takenker on Datrayding "), Jack Schwagger (" Technical Analysis. Full course "). Help the novice trader and portals about Forex, such as www.financemagnates.com, www.forex.ru, www.mt5.com, www.fortrader.org, www.forexmaster.ru other.

Successful trade rules on the Forex foreign exchange market

Many players are disappointed in Forex after the first unsuccessful steps. So that this does not happen, the beginning of the trader needs to adhere to simple rules that will help avoid losses and make the market work in interesting and efficient:

1. Learn specialized literature, be sure to get acquainted with the principle of the organization of trading forex and deal in the mechanisms of triggering transactions.
2. Start trading on the study account (Demoschet), which is a simulator real trades And allows you to push your skills. And only having tried various tools and strategies, go to real money.
3. Trade in small amounts, do not risk all the deposit. Try to use no more than 10-30% deposit.
4. Studies from brokers, take part in webinars, attend courses.
5. Use additional featuresFor example, insert themselves in joint accounts (PAMM), and also earn on affiliate programs.
6. Control your emotions and do not chase rapid profit. Soberly assess the situation and do not fall into a panic because of the loss; Competently distribute time.
7. Use indicators and advisors. They will help analyze the market and time from time to time transactions in automatic mode.

Thorough preparation, thoughtful analysis and composure - is what the beginning trader needs to trade for successful trading on Forex. Master this way to earn money for anyone who wants. Authoritative brokerage companies provide broad information capabilities and training programs that will help to understand the intricacies of bidding and learn to plan their actions.

A warning : The contracts or financial instruments proposed for the conclusion are highly adjusted and can lead to the loss of funds made in full. Before making transactions, you should familiarize yourself with the risks with which they are connected.

According to forecasts, the pace gDP growth In the United States will gradually decline in 2007, however, while consuming will decline much faster on the background of cooling in the housing market. What way the trajectory of consumer and capital expenditures in the United States will affect the currency courses? Problems in the United States will also entail the problems in Japan, China and the rest of the Asian region; However, if these problems are more due to a reduction in consumption, China is most serious, China will suffer.

State of the US economy

Managing Fed Bernanke in his speech in Congress (on Wednesday, July 19) presented a completely adequate forecast for the US economy. The discharge of domestic demand, fed to the last time from the housing market, against the background of the inflation risks present, was reflected in the beige book. While it is still difficult to say whether the rate will stop on federal funds at a rate of 5.25%, or will continue to increase to 5.75%. However, it is obvious that reducing consumption and growth capital costs In different ways, they will affect the economies of other countries and their currencies.

Key idea

Different countries have a different export structure. Where exports of consumer goods prevailing, theoretically, weakening as a result of reducing consumption in the United States, or in the world as a whole should lead to more significant negative consequences. At the same time, countries specializing in exporting means of production in this case will suffer to a lesser extent. In accordance with this criterion, Japan, Germany and Korea are focused on exporting means of production, while Spain, "Hong Kong" and Italy export mainly consumer goods. Hong Kong is not accidentally taken in quotes, because trade data includes transit from China. Since we have no reliable data in China, you can use information on Hong Kong as a reasonably reasonable substitution. In other words, from the position common sense It can be concluded that China specializes in consumer goods.

Thus, if world demand and, in particular, the demand in the United States will decline in consumption, and not in terms of costs of production, Spain, China and Italy, theoretically, will suffer stronger than Germany or Japan. However, in order to more accurately assess the exposure of various economies and their currencies with the impact of consumption in the United States, it is necessary to take into account (i) the dependence of the country's exports from demand in the USA, and (ii) dependence economic growth Export countries.

Observation 1. If the state of the US economy deteriorates, Mexico, Japan, China and the Asian countries are most affected.

About 80% of Mexican exports goes to the United States. Thus, weakening american economy will have negative consequences for Mexican Peso. Also, quite strongly depend on American demand Japan, China and the countries of the Asian region. Therefore, their currencies will also suffer. Here you need to turn special attention Two aspects. First, currencies of countries with a deficit are under pressure during periods of development of risk evasion strategy against the background of reducing world demand, however, the currencies of countries with surplus may experience exactly the same difficulties. In other words, countries with a surplus, it is usually an economy with a higher beta coefficient and, in principle, more sensitive to changes in real demand. And countries with a deficit are more sensitive to nominal factors, such as world liquidity. Thus, the problem is about the fact that currencies of countries with surplus will feel more confident than the currency of countries with a deficit, requires verification.

Secondly, in this case the concept of "dollar smiles" is applicable. The USA's soft landing can determine the preservation of risky strategies, and the USD / Asia pairs will bargain with a decrease. However, if investors will suspect that the weakening of the state's economy will take a wider scale, a tendency to reduce risk can begin, in this case, the downward trend on USD pairs / Asia will face serious difficulties.

Observation 2. China is most vulnerable in Asia.

Despite the fact that all Asian countries depends on demand in the United States, China is perhaps more sensitive to changes in the level of consumption in this country, and Japan and Korea are more stable, as they export twice as many means of production than consumption goods. This is another reason to assume that this period of weakening the US economy will be less painful for Japan than previous ones. In addition, China's vulnerability can also be strengthened by Beijing restrictive politicians against the yuan. In this aspect, it is necessary to control non-net exports, but capital costs and speculation in the housing market. If the US economy will slow down the topics of growth, Beijing will be in complex situation, in the face of the need to tighten politics in the situation of weakening the global economy. However, at the same time, the blow to export volumes can reduce the pressure on the yuan. But at the same time, Chinese exports can remain high enough, receiving support from Europe and Japan. But in general, this particular type of weakening will definitely become a knife in the back of Asian economies.

Observation 3. European inequality.

Germany is a mansion among other European countries. It is more different dependent on exporting means of production. The discrepancy between world consumption cycles and capital expenditures can only strengthen the divergence in Europe and complicate the decision-making policy decisions.

Our forecast for USD / Asia

Stephen Yen, Morgan Stanley

Currency market Forex - This is the interbank market on which the free exchange of currencies occurs, without any fixed values. Name of the foreign exchange market - Forex - translated from English means "Currency exchange" (Foreign Exchange). Trade conditions in the foreign exchange market are the same for Russia and Ukraine: free trade and the possibility of buying and selling currency at the best price.

The history of the Forex foreign exchange market began in 1971, when the US president decided to refuse the Golden Standard. All this proven to the final collapse of the Bretton Woods currency system and led to the possibility of free changes in currency courses. As a result of these changes, a new type of activity was born - currency trading, which began to be carried out in the international foreign exchange market.

Trade turnover in the international foreign exchange market, including the market of Ukraine and Russia, is more than 4 trillion. Dollars daily. Small sums Forex are not converted, so it was and remains primarily by the interbank foreign exchange market. Among its participants - Central, Investment, Commercial Banks, Dealers, Brokers, Various Funds, Insurance and Large Transnational Companies. Private traders of Ukraine or Russia, who want to make money on Forex, is easier to get to the interbank through brokerage companyoffering favorable terms of cooperation.

Most currency systems of certain states, including the Russia's foreign exchange market, build their activities with a look at Forex. Control over the access and features of the work on Forex is carried out by the Central Bank. FEATURES OF TAXATION OF ACTIVITIES FOR FOREX The NDFL - if the broker is the Russian company, it should also take on the functions of the client tax agent if not - the trader is obliged to calculate the tax and draw up a declaration independently.

Investment accounts in their essence suggest that the depositor replies to the management of its finances in third hands - it can turn into both profit and a significant loss, since the risk of such an investment is very large. Playing for Forex, you manage your finances, making decisions yourself. Investment accounts also imply the impossibility of independent management.

Benefits of Forex trading before currency deposits Obvious:

• You decide when picking money. While on the Russian market and Ukraine, banks put restrictions on early removal of funds - the bank takes back part of the profit.
• Currency deposits allow you to keep means in one, maximum in two currencies. Trading on Forex allows you to trade at once in several accounts (more than 120 currency pairs).
• You can make an online trading with your profession and receive income without restrictions.

Not so long ago, we published an article in which they told about, gave the basic concepts of this term, disassembled its functions. One of the component of the global investment market is currency marketwhich we will talk about today and talk.

I am sure that many of you have heard such a term as the "currency market", but not all fully understand that this is what it can be useful, and for which they generally focus in these economic processes.

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Foreign exchange market: simple words about complex concepts

If you look at Wikipedia, you can find such a definition:

« Currency market (English. Foreign Exchange Market, Currency Market) is a system of sustainable economic and organizational relations arising from the implementation of operations for the purchase and / or sale of foreign currency, payment documents in foreign currencies, as well as operations on the movement of foreign investors' capital "

Currency market Very multifaceted. Many economists still argue, how to properly interpret this concept. There are dozens, or even hundreds of definitions of the foreign exchange market, each of which has its own feature. As they say, how many people, so much opinion. But no matter how you understand, did not interpret the concept of the "currency market", it will not change its essence, it will still have clear functions and perform the tasks set economically. If we speak in a simple language, then the foreign exchange market is a place where investors, sellers and buyers of currency values \u200b\u200bcome to a certain agreed opinion.

Perhaps this article was written much later, but the situation that is going on in the foreign exchange market as Russia and Ukraine, made us to deal in more detail with some concepts, to understand why significant races of the dollar and euro rate occur on these changes. How can I protect yourself from the loss of money. Of course, within the framework of one article it will be difficult to consider general concepts, give an analysis to what is happening, and also to deepen in financial analytics. But we will try as quickly as possible and informatively answering many questions that arise.

Currency market: What is it?

As you already understood, the currency market is a special system. economic relationswhich are built on the sale and purchase of currency values. This market has all the attributes of the usual market: subjects and objects, demand and supply, structure, communications, price for goods, even their speculators and dishonest players. The most important difference is in a specific product. Here, as a foundation, the currency values \u200b\u200band the currency itself are the currency of different countries of the world.

Modern currency markets arose not by chance, but as a result of the evolution of society and economic relations. It is worth noting that the purchase, sale, sales and exchange of currency existed in ancient Rome, and there were even special changes in Russia that the money was exchanged, taking a small fee for this. But the first foreign markets, which became the "great-grandfathers" of modern, appeared in the 19th century. Economists allocate such basic prerequisites for the formation of the currency market:

• Development and formation economic connections Between different states
• Creating international currency systemwhich was designed to regulate global currency relations.
• The distribution of lending is not only among the population of a particular country, as well as lending to one state to others.
• Development banking system and interaction of banks of different countries
• Development information technologies (Telegraph, phone), which allowed to be promptly involved in market participants among themselves, to negotiate and reach agreements.

It all started with national currency markets, the development that allowed to form the world, the global currency market, in which each willing, fulfilling certain conditions, could buy funds from leading countries in the world.

It is clear that now the currency market has no borders or restrictions. World network Internet allowed participants to buy and sell currency in seconds, being in different parts of the planet.

Foreign exchange market: Main features, characteristics and functions

The foreign exchange market has certain features that allocate it among others. financial markets. Modern market Characterized by such features:

• Internationalization and use of all sorts electronic means For work in the currency market. As mentioned earlier, the development of the Internet has made it possible to significantly accelerate the work in the foreign exchange market, and allow many people to trade with currency values \u200b\u200bwithout leaving the house.
• 24-hour and continuous work. The foreign exchange market is a mechanism that does not stop. It always works, at any time, in all parts of the world.
• Unification of all currency transactions
• Operations in the foreign exchange market are used for financial protection from all kinds of financial risks. For this use hedging.
• A huge number of speculative transactions that are directed only to buy and sell it even more profitable. And not only speculate large companies And huge banks, but also legally and individuals.
• Static a currency rate that does not always depends on real economic indicators.

Currency market - This is a multifaceted and a complex system, understand which in a few days will not work. Many experts are studying the specifics of working with the market, the influence of certain factors on the course, the causes and consequences of sharp jumps and collaps. But if you become a specialist, then this kind of work can bring millions of dollars in a short period of time.

Without the foreign exchange market, it is already hard to present the functioning of the economy. He, first of all, provides the right and uninterrupted economic cooperation between the countries partners, but also performs a number of other functions:

• Providing timely international settlements on financial obligations
• Creates protection opportunities from currency and credit risks
• Thanks to the global currency market, the currency markets of various states
• Creates opportunities to expand the currency reserves of states (purchase of the required number of foreign currency).
• Currency rate regulation due to supply and demand
• The foreign exchange market allows you to implement the state's currency policy as an integral part of the general economic Policy development.
• Provides the opportunity to make money due to speculation on the growth and decline in the currency rate

Many people know about the foreign exchange market only thanks to the 7th function. But, as you can see, this is a very multifaceted concept, which, first of all, is designed to be a regulator and guarantor economic Development and the interaction of states and major international companies.

Foreign exchange market: And who participants?

Like any other market, the currency has its own participants, subjects. These include:

1. 1. Central banks.

Central banks are essential regulators of the country's foreign exchange market, are responsible for economic and financial stability. The Central Bank act as the subjects of the foreign exchange market, buying and selling the currency on their need.

1. 2. Commercial banks

Banks are concentrators of the country's population, conduct the bulk of foreign exchange operations within the state. Many market participants have their personal accounts in commercial banks through which the purchase and sale of various currency values \u200b\u200bare carried out.

It can be said that banks are the subject of the foreign exchange market as directly when they buy and sell currency and indirectly when buying, selling, currency exchange owned by individuals and legal entities.

Companies

Mainly international companieswho collaborate with firms from other countries. Both importers and product exporters need the currency of the country with which they cooperate. This creates certain demand and supply in the foreign exchange market.

By the way, the races of the dollar's course are primarily beneficial russian companieswhich sell their products in dollar price tags abroad, and employees pay in rubles.

• International investment companies, Pension and hedge funds, insurance companies.
• Currency exchanges

In many countries, there are internal currency exchanges, designed to ensure the country's population with the necessary demand for foreign currency. The state regulates the activities of these exchanges, because from a properly built policy of response to demand and proposal for currency depends economic situation in the country.

Currency brokers

These are people who are engaged in buying and selling values \u200b\u200bin the foreign exchange market. Their main function is the information of the buyer and the seller, the conclusion of the contract and the implementation of the transaction. For such work, the broker takes a certain% of the amount of the transaction. But the amount of this commission is often less than the difference between the bank's loan percentage and the rate of banking Deposit. Banks can also perform this feature. In this case, they do not give out a loan and do not carry the corresponding risks.

Private faces

These are the smallest participants in the foreign exchange market. Each person when shares, buys and sells currency, is part of the global currency market. Let the transaction transactions are relatively not large, but the total set can be a very large part of all transactions carried out in the domestic foreign exchange market.

Operations that are carried out in the foreign exchange market

And the most recent, with which I would like to figure it out, so it is with operations that different participants can conduct in the foreign exchange market. These basic operations can be distinguished:

Spot - currency operation Immediate delivery

Under this term means the implementation of such a type of operations that are implemented immediately. Banks undertake to put the currency no later than the end of the second day after the conclusion of the transaction. Spot is very convenient if needed large sum money in a very short period of time. But such operations encloses a certain risk, because the course is the magnitude of the floating, and buying today at one price, tomorrow, at the time of delivery, the price can at times fall.

With the help of the SPOT operation, banks ensure the needs of their customers in foreign currency, overflow of capital, including "hot" money, from one currency to another, carry out arbitration and speculative operations.

Urgent transactions with foreign currency

• Forward transactions. Their feature is that the contract is signed in this moment, and the course is fixed at the time of signing, but the delivery of the currency is planned for the future.
• Futures transactions. These are standard contracts that subscribe to the stock exchanges and currency sales. Futures have the standard deadlines for the fulfillment of obligations. Three-month futures is the most common.
• Options. it financial instrumentwhich is that the seller receives the right, but not the obligation, to sell a certain amount of currency at a fixed price in the future.
• Currency swap. This is an operation that combines at the same time and buy and sell different currencies with immediate delivery.

So we briefly reviewed the basic concepts regarding the foreign exchange market. As already mentioned more than once, the topic is very extensive and multifaceted, therefore, within one article, it is very difficult to analyze all possible aspects. Well we gave the base, where you can start the study of the foreign exchange market.

And at the end of the article, we offer two fairly interesting videos that will further replenish your knowledge luggage about foreign exchange markets, their structure, interaction, features of operation and development.

We also advise you to see another rather interesting video about the foreign exchange market. We are confident that you can discover new concepts, as well as find answers to dozens of questions regarding work and earnings in the foreign exchange market.