First, the structure of the Forex market. Like all markets - Forex - a set of buyers and sellers of currencies. Call them the operators Forex. These are large banks of different countries, including Central banks, the major investment companies, pension funds (mostly North American). Operators trade in different currencies, effecting transactions. Minimum value (contract, lot) transactions - about US $ 1 million. The operators of linked special network of instant transactions. Significantly, there is no physical movement of money, that is, if, for example, the Japanese Bank buys billion pounds for the yen to a London Bank, nobody will rush to ship them on a plane and send under tight security in Japan. Why, indeed? After a day (or in a few minutes, the Japanese Bank will sell those pounds German Bank for euros and the - a London Bank for the yen. Not looking here a special meaning, not морщите brains is a problem of market operators. The main thing for us - the small investor in this market wouldn't get in any way. As he gets there?
Yes, through intermediaries, what else! Banks because traded why? Or on the instructions of their clients, either speculating (incidentally, many Western banks is almost the only way to get a profit). Literally in the last 15 - 20 years arose the so-called brokerage companies or brokers, clients operators Forex (banks), on the other hand, provide an opportunity for the small investor to carry out operations of purchase and sale of currencies on the Forex market is relatively small lots (in the tens and hundreds of thousands of dollars of the USA).
Here and I shall allocate special terms adopted for this activity. Try to immediately remember them.
Now it is clear - to get to trade Forex, we need firm broker with which we conclude the agreement about giving us an opportunity of access to transactions on Forex.
On brokers talk more later, now we have to cover the whole picture, details, you can then consider.
Proceed on to examine the most important - what you need to make a contract with a broker and what will we get from a broker? First - a small digression. I hope all readers know what to get something, you must something to invest. From scratch so it is just a zero, how many you did not multiply. Trading on the Forex market - type or method investments for profit. Moreover, the described type of investment is different, on the one hand, potentially of unlimited magnitude of profits, on the other hand, increased risk. Therefore, if You count just come somewhere, sign on Forex (to conclude the contract) and trade, profit, leave these thoughts. But those who has a couple of hundred dollars and just wants to multiply, it is better to go to the casino or spend the money on your favorite girl - benefits more. Work on Forex - is a serious activity, respected, and, perhaps, respectable, requires certain financial investments.
So, to conclude a contract with a broker, you should open an account, or the broker or the Bank. But for this you need money? To address this issue, find out what is the "margin trading" - the most important concept that is the Foundation, not only monetary but also any other market.
Please read and ponder read, as discussed will be very important concepts.
Let us Return, for example, to exchange paragraph 5 of the Chapter. You need a credit 3 040 000 rubles to exchange them for $ 100,000. You came to the lender, and he says - if you get a profit - well, if damages who have their fill? Leave a pledge, for example, a hundredth part (30 thousand roubles), if will be formed loss - subtract from the collateral, the creditor wasn't to lose money, if profit - get your Deposit back after the return of the credit. This pledge and called the margin requirement, or margin (Margin). While the ratio of credit granted for the transaction to the margin call leverage (leverage), a more rigorous translation of the term - translation attitude. Now it is clear to make a deal with the lot is 100 000 USD and the leverage of 100 required margin is $ 1,000. All clear so far?
we will Continue this topic further. Uncomfortable every time you open a position (the meaning of this term - a little later) put the margin on the account of the broker, the closing of the shooting. It is not required. Each broker is defined minimum level of the trading account, it usually sizes from 1 thousand up to 10 thousand dollars, some brokers - from 100 000 USD. Before you begin to trade, You need to put on your trading account with the amount not less than that specified in the contract, as a minimum. And can there be more? This is a must. Why?
Suppose, under the terms of the broker - minimal lot - 100 000 dollars, shoulder - 100, thus the required margin is $ 1000. The amount You put on the account. After You have opened a position, depending on the direction of the price movement in the exchange rate) will be generated profit or loss. Well, with a profit is there but with a loss... If You decide to close a position - loss will be deducted from Your account and again to enter the market, will need to add money to 1000 dollars. Uncomfortable even technically - while you are in search of money, credit the account according to the law of the "sandwich" miss the beautiful movements of the market and, consequently, the ability to earn money. But there is even more dangerous things. But first, let's deal with such an important concept, as equity (Equty), or a floating Deposit. Suppose You have a Deposit of $ 1,000. After opening the position, the price is moving in the necessary direction and position formed earnings, suppose $ 105. Summing profit with Your Deposit will get 1105 dollars. It happens that a loss, for example - the same 105 dollars, but with a minus sign, then екьюти - 895 dollars. Equity - thing quite real, it is the value of Your Deposit for the second time, the value of Your Deposit, if You immediately close all positions. Obviously, if there are no open positions, екьюти equal to the Deposit.
Now, the position is opened, and a growing loss ( by the way, the loss will be called loss (Loss)profit profit (profit). Now, loss grows, equity decreases. How long will it last? After all, if the loss will exceed Your Deposit, the losses will have a broker, and he cannot allow. Therefore, there is a so-called stop level, I call it "the hitchhiker", in overcoming this level broker will automatically close Your position for you. The value of this level are usually 10 to 20 % of the margin, so that after the "hitchhiking" on the Deposit You will have less $ 100. This is called " burn the Deposit, to leave the market, we won't allow. It's always better to close a position, than wait for the "hitchhiking".
Let us Return, for example, to the Deposit of 1000 dollars. If You have not guessed the direction and decided to wait a losing wave is quite feasible solution, most of the time the market "wobbles" about certain values of rates, in the value of item 10 dollars, supply a total of about 90 points. It is very small, and, most likely, You will suffer the "hitchhiking". That is, You have no room to maneuver with the very small Deposit, I call such a game - "hanging on nails over a precipice". Work hard, believe my experience, nobody pulled the account. More or less quiet work starts at around three to five times exceeded, the normal operation (and not roulette) - at tenfold. That is, if You are going to work in one lot with a margin of $ 1,000, have on the account of 3-5 thousand dollars, optimal - 10 thousand dollars.
It Should be noted that if a trader недисциплинирован, blindly repeat his mistakes, he uncover a Deposit of any size, even a million . A case is known when managing a Bank lost. So the size of the margin important for trading, but not he determines success or failure.
In conclusion, let us examine another concept. I already use such words: position opening and closing a position. What does this mean? Purchase (or sale) in terms of margin trading is called " opening positions. You got the loan and have made the transaction. After opening the position, due to movements in exchange rates are formed profit or loss. Until the position is open, you are in the market". The obligatory condition of margin trading is the closure of a position, a transaction in the opposite direction for the same amount, in the same currencies, that is, if You open a position bought 100,000 dollars for Euro, when you close positions must sell 100,000 dollars per Euro. At this point profit or loss are recorded in Your Deposit and You come out of the market.
In the next Chapter, we will continue to consider the relationship between the broker and the client and see the main - c our "goods", the trading on the Forex.
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