Beginner:
- There is an opinion, what Forex it is big deceit? It is the truth?
MasterForex:
- Yes, it is the truth, but only for fools. As well as any other employment or a kind of activity Forex does not suffer nonprofessionals who break there now in search of a freebie in summary there money keeps.
Beginner:
- And why then the article "Currency Deceit or the Truth about Forex" - author Platon Emtsov passes from hand to hand and is passed by word of mouth?
MasterForex:
- To begin with I will signal, that the author of the article - manager Finam, the companies specialising on granting of service in the share market, therefore an article main objective actually - go to us.... In Finam - on the share market. It is the article has done a lot of noise on Russian forex. But she has defaulted the problem. On the share market nobody has run. Because for job with shares big enough means, unlike Forex is necessary. Beginners Forex re-read and rewrote this article from a forum in a forum and asked professionals of a forex, the truth it or not.
Beginner:
- Nevertheless it is the truth, or not?
MasterForex:
- There is no, of course, it not the truth. There are pluses and minuses at Forex. People Everywhere work, and as they say the human factor, too is present. I it that every family has its black sheep. Is not fair on a hand or as they say in language of traders - not fair on quotations.
Beginner:
- So that such Forex?
MasterForex:
- Market Forex (Foreign Exchange) - the currency market generated in 1971 when an international sales has transferred from fixed rates of currencies to the floating. Thus the rate of one currency concerning other is advanced most evidently – an exchange with that ratio between them which both parties agree. The currency auctions are a purchase of one currency and sale other. Currencies bargain steams, for example, euro/dollar (EUR/USD) or dollar/yen (USD/JPY).
Beginner:
- What is necessary to start to work to (play) on Forex?
MasterForex:
- To start to earn on Forex it is necessary only: the computer, the Internet, is a little money and huge desire.
- You earn only own mind, i.e. it is not necessary to carry on negotiations to agree or swear at partners, anybody in what to convince, all business entirely depends only on you and there is nobody more.
- Anybody and can prevent nothing to you, earn on Forex.
- You can attend to this business during any time convenient for you, plan the day. The market works all day and night (except the days off when many Forex centre do not grant the quotation. But is Forex centre which work and during week-end).
- And the most important thing - it is possible to work, not leaving the house.
Beginner:
- Anybody and can prevent nothing to you, earn on Forex. - whether it is not too hardly told?
MasterForex:
- That here means... Here imagine some millions traders of computers simultaneously sitting at screens and periodically making bargains on Forex. Now try to answer a question how, let even theoretically here the deceit is possible? Whether probably to deceive at once everything and how it to make?
Beginner:
- Millions different people worldwide! Work under the same quotations as well as who here can be deceived? But nevertheless at forums the people complain, that them have deceived - Forex centre have given other quotations.
MasterForex:
- Any of forex centres will not dare to deform a drawing of quotations of currency couples, besides because millions people worldwide watch of the same schedules. The Internet, this such place where easily enough it is possible to check up correctness of data under quotations of currency couples.
Beginner:
- Then why some traders write, what them have thrown?
MasterForex:
- As I already spoke above - every family has its black sheep. Concerning that this business is how much fair, here it is possible to add, that many analysts agree in opinion about Forex as about the most independent market in the world, thanks to great volumes of bargains which are passing in the market on it any government in the world, any bank, and furthermore the person cannot affect. Rules one for all. The market depersonalizes all its participants, here there are no either favourites, or favourites. The one who possesses art of market gamble is better wins.
Beginner:
- How to enter this situation?
MasterForex:
- It is necessary to become the professional and it is quiet, without vanity to gain money. For example from $1 to $500 US dollars daily if it will seem not so much, it is possible to earn and more, and it is much more.
Beginner:
- Why all the same sale and purchase of currencies?
MasterForex:
- For purchase and sale of currencies at least two reasons. An order of a daily turn-over of the currency market of 5 % it is necessary on activity of the state and the commercial companies which sell or acquire the goods and services for a foreign exchange, or are obliged to convert incomes in a foreign exchange to the national. The others of 95 % of a market turn-over – the speculative transactions directed on extraction of profit.
Beginner:
- With what currencies it is more favourable to work? What currency steams are used by speculators?
MasterForex:
- Speculators achieve the greatest success, trading in the most liquid currencies (The Majors). As of today over 85 % of all bargains the euro, the British pound, Swiss franc, Canadian dollar and australian dollar is made with these currencies, namely US dollar, the Japanese yen.
Beginner:
- Where there is a market?
MasterForex:
- Forex is not "market" in traditional sense of a word. Forex is considered out of exchange or an inter-bank market as bargains are inter parties carried out through an electronic network or by phone. The auctions do not pass at exchange, as in a case with shares or futures contracts.
Beginner:
- So market Forex means there is no in what that to the certain country and it does not have administration?
MasterForex:
- It has no concrete sales area, as, for example, exchange rate futures. Trade occurs through Internet, by phone, through terminals simultaneously in hundreds banks all over the world. The future and share markets have one more essential difference and, simultaneously, limiting – trade is interrupted in the end of day and renewed only by morning of next day. Thus if you trade in the Russian market, and some events essential to the market have occurred in the USA in the morning the market position can appear completely not such as you expected.
Beginner:
- When the market opens and in the auctions so much begin?
MasterForex:
- Market Forex works 24 hours a day, and exchange within all working week does not cease. The auctions in this unique market begin in Sydney and as in different parts of the Earth there comes day, transfer in Tokyo, London, New York and other financial centres. Wishing to quote currency are practically in all time zones. Unlike other financial markets, on Forex investors can react to the course change of currency called by economic, social or political events at any time.
Beginner:
- Heard, is abrupt - Traders. Who they?
MasterForex:
- The trader, according to an explanatory dictionary - the worker of the broker company, bank or other financial structure directly participating in exchange trade. To it it is possible to add, what is it not always (and even it is very frequent) the worker of any organisation. The majority of traders is the people, operating on itself and risking only the capital. And, besides, it is the people receiving special pleasure from the process of trade and profit earning "from air". The sense of job of the trader consists in profit earning from realisation of speculative tradings in the various markets with any instruments traded at exchanges (petroleum, gold, wheat, coffee, orange juice, securities, indexs and so forth). I.e. currency purchase on low and its sale after a while at higher price.
Beginner:
- I too wish to be the Trader. What for this purpose it is necessary for me?
MasterForex:
- For arrival of positive results the following is necessary for the trader:
- Fast access to the financial information (it can be received on satellite channels or on the Internet).
- Ability correctly to analyse a market situation and correctly to advance the moment of an input and an output from the market. Now there are two basic methods of the analysis of financial markets: the fundamental and technical computer analysis.
- Ability to bridle the emotions (greed, fear, etc.) Is better use of trading systems helps with it.
Beginner:
- What minimum deposit is necessary for job on Forex?
MasterForex:
- In market Forex the contract minimum amount makes 100.000 USD. Clearly, that is far not to each such means is accessible. Limitation in a means limits also possibilities. However speculative tradings on the international financial markets can be spent by a principle margin trading. The essence margin trade consists that for an enter into a market it is completely not obligatory to have all value of the contract. It is enough to introduce the lien making from 1 to 10 % from an amount of contract. That is for settlement of a transaction on currency purchase/sale, Forex centre credits you the missing sum (grants "shoulder" (leverage)). Thus, for purchase of $100.000 of the contract the minimum lien only 1000 is required. Thus, naturally, potentialities of the player are increased: having in stock rather small means, it can operate in the market with the sums many times over the big. Thus all profit which has arisen from variation of rates of exchange, enter the name on its bill.
Beginner:
- Means, having only $1, I can start to work on Forex?
MasterForex:
- Yes, certainly. Only the profit will be small. Look at currency steams and if at it quotations for a day hardly vary, you have a chance to earn much pips. Naturally having informed for such happiness a spread with your broker - forex centre.
Beginner:
- What is the spread, pips and quotations?
MasterForex:
- The quotation is an unit value of one currency (base) expressed in terms of other currency (quoted). In a designation of a traded couple of currencies the base currency enters the name the first, quoted - the second (for example, EUR/USD). The quotation consists of two figures: Bid - the price on which the client can sell a base currency, Ask - the price on which the client can purchase a base currency. The difference between Bid and Ask, is called as a spread. The spread dimension depends on an amount of transaction, from a market position and is metered in pips (they points, they items). 1 pips = to is minimum possible variation of the quotation of currency. For the principal currencies traded in our company, this figure is equal 0,0001 and only for yen is equal 0,01. The minimum spread is equal 1 pips (such spread meets in trade between large players of the market - the market-mejkerami), maximum can reach to 30 pips and more in the "nervous" market.
Beginner:
- But after all there are quotations direct and return. What to use?
MasterForex:
- Direct quotation - quantity of the national currency for one unit foreign. The return quotation (indirect quotation) - quantity of a foreign exchange for unit national. Now a direct quotation in the market have euro, the British pound sterling and currencies, the former English colonies (for example, Canadian dollar - CAD). It is coupled by that before the basic world reserve currency there was a pound since accounts in all numerous English colonies were conducted in pounds, but after the First World War beginning on leading items in the world there is an US dollar. After a panic on a financial market of London in 1931 the US dollar is final assigns to itself a title of the world reserve currency. Since then all currencies (except for above-stated) have the return quotation concerning US dollar.
Beginner:
- But after all there is a large quantity of currency couples which the dollar does not concern. It how to understand?
MasterForex:
- Currencies can interchange among themselves without dollar sharing. Such rates are called as cross rates and settle up through rates of currencies participating in a distributing frame concerning dollar. Cross rates by means of the standard reductions are designated, for example, EURGBP is an euro exchange rate to the British pound.
Beginner:
- Well, I cannot sit and look all time how the currency moves. Suddenly when I will sleep, it will be in more favorable rate for open bargain (closings). Also what to me now to become the sleepwalker?
MasterForex:
- Quotations of currencies in market Forex are changed every second and at times it is possible simply not to have time to close an item under the price necessary to you. Besides, there are cases when the trader for any reasons cannot interrogate itself the quotation and close an item (being out of a job, having problems with communication facilities etc.). To avoid losses in such cases warrants allow.
Beginner:
- Warrants?
MasterForex:
- Well. You exhibit the warrant with certain parametres and you go to walk with the liked little girl. And when you will return, warrants will work as it is necessary and will earn for you for a romantic supper at restaurant with your girl-friend.
Beginner:
- Well, has made laugh...
MasterForex:
- Anything ridiculous. Learn terms and run to exhibit warrants:
- Stop Loss Order is an order for item closing at severe movement of a rate with the small loss, allowing to avoid still the big.
- Take Profit Order is an order for item closing after a remunerative price and reception of scheduled profit.
- Market order – instructions of the client to the stock broker immediately to make the bargain for the most favourable market price.
- Buy limit order – «the limited order for purchase» instructions to the stock broker to make the bargain under the price in the stipulated interval.
- Buy order – the order to the broker to purchase certain number of securities for a determined price.
- Fill or kill order = immediate or cancel order – the order of the client to the broker who should be either is immediately executed, or cancelled.
- Pending Order - at arrival of a market price of the mounted level will open an item in a desirable direction.
Beginner:
- Well it is fine, I have run...
MasterForex:
- Only store a couple of good rules - put in warrants no more than 5 % from the deposit! Calmness and only calmness...
Author: Nikolay Sabunaev |
The disproof of the well-known article "The Currency Deceit or the Truth about Forex". To beginning traders it is devoted. We start to publish dialogues of the Beginner and the MasterForex. Our problem to explain, that it is necessary to know and how to operate, to increase the money. The first story about FOREX - Foreign Exchange.
