The CIA is the foreign exchange market in context. Forex currency market: to help a novice trader Currency market: and who are the participants

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

I am sure that many of you have heard such a term as the "foreign exchange market", but not everyone fully understands what it is, how it can be useful, and why even navigate these economic processes.

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Foreign exchange market: in simple words about complex concepts

If you look at Wikipedia, you can find the following definition:

« Currency market(eng. Foreign exchange market, currency market) is a system of stable economic and organizational relations that arise in the course of operations for the purchase and / or sale of foreign currency, payment documents in foreign currencies, as well as operations for the movement of capital of foreign investors "

Currency market very versatile. Many economists are still arguing how to properly interpret this concept. There are dozens or even hundreds of definitions of the currency market, each of which has its own peculiarities. As they say, how many people, so many opinions. But no matter how you understand, interpret the concept of "foreign exchange market", its essence will not change, it will still have clear functions and fulfill the tasks set economically. If to speak plain language, then the foreign exchange market is a place where investors, sellers and buyers of currency values ​​​​come to a certain agreed opinion.

Perhaps this article would have been written much later, but the situation that is happening in the foreign exchange market of both Russia and Ukraine made us understand some concepts in more detail, understand why there are significant jumps in the dollar and euro, who influences these changes how you can protect yourself from losing the value of money. Of course, within the framework of one article it will be difficult to consider general concepts, give an analysis of what is happening, and even delve into financial analytics. But we will try to give answers to many questions that arise as concisely and informatively as possible.

Foreign exchange market: what is it?

As you already understood, the foreign exchange market is a system of special economic relations which are built on the sale and purchase of currency values. This market has all the attributes of an ordinary market: subjects and objects, supply and demand, structure, communications, the price of goods, even its own speculators and dishonest players. The most important difference lies in the specific product. Here the currency values ​​​​and the currency itself are the basis. different countries peace.

Modern currency markets did not arise by chance, but as a result of the evolution of society and economic relations. It is worth noting that operations for buying, selling and exchanging currency existed in ancient Rome, and in Russia there were even special money changers who exchanged money, taking a small fee for this. But the first currency markets, which became the "great-grandfathers" of modern ones, appeared in the 19th century. Economists identify the following basic prerequisites for the formation of the currency market:

• Development and formation economic ties between different states
• Creation of an international monetary system, which was designed to regulate world currency relations.
• The spread of lending not only among the population of a particular country, but also lending from one state to another.
• Development banking system and interaction of banks of different countries
• The development of information technologies (telegraph, telephone), which allowed market participants to quickly communicate with each other, negotiate faster and reach agreements.

It all started with national currency markets, the development of which made it possible to form a world, global currency market, in which everyone, having fulfilled certain conditions, could buy money from the leading countries of the world.

It is clear that now the foreign exchange market has no boundaries or restrictions. The global Internet network allowed participants to buy and sell currency in a matter of seconds, being in different parts of the world.

Foreign Exchange Market: Key Features, Features and Functions

The foreign exchange market has certain features that distinguish it from other financial markets. Modern market characterized by the following features:

• Internationalization and use of various electronic means to operate in the foreign exchange market. As mentioned earlier, the development of the Internet has made it possible to significantly speed up work on the foreign exchange market, and allow many people to trade in foreign exchange values ​​without leaving their homes.
• Round the clock and continuous work. The foreign exchange market is a mechanism that does not stop. It works always, at any time, in all parts of the world.
• Unification of all currency transactions
• Operations in the foreign exchange market are used to financial protection from all kinds of financial risks. For this use hedging.
• A huge number of speculative transactions that are aimed only at buying profitably and selling even more profitably. Moreover, not only large companies and huge banks speculate, but also legal entities and individuals.
• The static exchange rate, which does not always depend on real economic indicators.

Currency market- This is a multifaceted and complex system, which can not be sorted out in a few days. Many experts have been studying the specifics of working with the market for years, the influence of certain factors on the course, the causes and consequences of sharp jumps and collapses. 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 difficult to imagine the functioning of the economy. It, first of all, ensures the correct and uninterrupted economic cooperation between partner countries, but also performs a number of other functions:

• Ensuring timely international settlements of financial obligations
• Creates opportunities to protect against currency and credit risks
• Thanks to the world currency market, the exchange markets of various states are connected
• It creates opportunities for expanding the foreign exchange reserves of states (purchasing the required amount of foreign currency).
• Regulation of the exchange rate through supply and demand
• The foreign exchange market allows monetary policy states like constituent part general economic policy development.
• Provides an opportunity to earn money by speculating on the growth and depreciation of currencies

Many people know about the foreign exchange market only because of the 7th function. But as you can see, it's very multifaceted concept, which, first of all, is intended to be a regulator and guarantor economic development and interaction between states and large international companies.

Foreign exchange market: who are the participants?

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

1. 1. Central banks.

Central banks are the most important regulators of the domestic foreign exchange market of the country, are responsible for the economic and financial stability. Central banks act as subjects of the foreign exchange market, buying and selling currency as they need it.

1. 2. Commercial banks

Banks are concentrators of funds of the population of the country, carry out the bulk of foreign exchange transactions within the state. Many market participants have their personal accounts in commercial banks through which the purchase and sale of various currency values ​​is carried out.

We can say that banks are the subject of the foreign exchange market both directly, when they buy and sell currency, and indirectly, when buying, selling, and exchanging currency belonging to individuals and legal entities is carried out through their accounts.

Companies

Mainly international companies who cooperate with firms from other countries. Both importers and exporters of products need the currency of the country with whose companies they cooperate. This creates a certain supply and demand in the foreign exchange market.

By the way, jumps in the dollar, in the first place, are beneficial to those Russian companies, which sell their goods in dollar price tags abroad, and employees are paid in rubles.

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

Many countries have their own internal currency exchanges, designed to provide the population of the country with the necessary demand for foreign currency. The state regulates the activities of these exchanges, because the general economic situation in the country depends on a well-constructed policy of responding to supply and demand for currency.

Currency brokers

These are people who buy and sell valuables on the foreign exchange market. Their main function is to provide information to the buyer and seller, to conclude an agreement and conduct a transaction. For such work, the broker takes a certain% of the transaction amount. But the amount of this commission is often less than the difference between the loan interest of the bank and the rate on bank deposit. Banks can also perform this function. In this case, they do not issue a loan and do not bear the corresponding risks.

Private individuals

These are the smallest participants in the foreign exchange market. Every person, when exchanging, buying and selling currency, is part of the global currency market. Let the amount of transactions is relatively small, but the total set can be a very large part of all transactions carried out in the domestic foreign exchange market.

Operations carried out in the foreign exchange market

And the last thing I would like to deal with is the operations that different participants can carry out in the foreign exchange market. The following main operations can be distinguished:

Spot - currency transaction with immediate delivery

This term refers to the implementation of this type of operations that are carried out immediately. Banks undertake to deliver the currency no later than by the end of the second day after the conclusion of the transaction. Spot is very handy if needed large sum money in a very short period of time. But such operations involve a certain risk, because the exchange rate is a floating value, and if you buy today at the same price, tomorrow, at the time of delivery, the price may drop significantly.

With the help of the "spot" operation, banks meet the needs of their customers in foreign currency, the transfer of capital, including "hot" money, from one currency to another, carry out arbitrage and speculative operations.

Forward transactions with foreign currency

• forward transactions. Their peculiarity lies in the fact that the contract is signed in this moment, and the rate is fixed at the time of signing, but the delivery of the currency is planned for the future.
• Futures deals. These are standard contracts that are signed on exchanges for the purchase and sale of currencies. Futures have standard maturity dates. The most common is the three-month futures.
• Options. This is a financial instrument, which consists in the fact 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 the purchase and sale of various currencies at the same time with immediate delivery.

Here we briefly reviewed the basic concepts regarding the foreign exchange market. As has been said more than once, the topic is very extensive and multifaceted, therefore, within the framework of one article it is very difficult to analyze all possible aspects. Well, we gave a base, something from which you can start studying the foreign exchange market on your own.

And at the end of the article, we offer two rather interesting videos that will further replenish your knowledge of the currency markets, their structure, interaction, features of functioning and development.

We also recommend watching another rather interesting video about the foreign exchange market. We are sure that you will be able to discover new concepts, as well as find answers to dozens of questions regarding work and earnings in the foreign exchange market.

According to forecasts, the pace GDP growth in the US will gradually decline in 2007, however, consumption will decline much more rapidly as the housing market cools. How will the trajectory of US consumer and capital spending affect exchange rates? Problems in the US will also lead to problems in Japan, China and the rest of the Asian region; however, if these problems are in more caused by reduced consumption, China will be hit the hardest, ceteris paribus.

State of the US economy

Fed Governor Bernanke, in his speech to Congress (on Wednesday, July 19), presented a quite adequate forecast for the US economy. The reduction in domestic demand, fueled until recently from the housing market, against the background of inflationary risks, was also reflected in the Beige Book. While it is still difficult to say whether the rate will stop at federal funds at around 5.25%, or will continue to grow to 5.75%. However, it is clear that the reduction in consumption and the growth of capital expenditures will affect the economies of other countries and their currencies in different ways.

Key idea

Different countries have different export structure. Where exports of consumer goods dominate, in theory, the weakening resulting from reduced consumption in the US, or in the world as a whole, should lead to more significant negative consequences. At the same time, countries specializing in the export of capital goods in this case will suffer to a lesser extent. According to this criterion, Japan, Germany and Korea are focused on the export of capital goods, while Spain, Hong Kong and Italy export mainly consumer goods. Hong Kong is in quotation marks for a reason, because the trade data includes transit from China. Since we do not have reliable data for China, we can use the information for Hong Kong as a reasonable substitute. In other words, from the position of common sense, we can conclude that China specializes in consumer goods.

Thus, if global demand, and in particular U.S. demand, declines in terms of consumption rather than in terms of input costs, Spain, China and Italy would theoretically be hit harder than Germany or Japan. However, in order to more accurately assess the exposure of various economies and their currencies to the level of US consumption, it is necessary to take into account (i) the dependence of a country's exports on US demand, and (ii) the dependence of a country's economic growth on exports.

Observation 1. If the US economy deteriorates, Mexico, Japan, China and the countries of the Asian region will suffer the most.

About 80% of Mexican exports go to the US. Thus, the weakening of the American economy will have Negative consequences for the Mexican peso. Also, Japan, China and the countries of the Asian region are quite dependent on American demand. Therefore, their currencies will also suffer. Here we need to pay special attention to two aspects. First, the currencies of countries with a deficit are under pressure during periods of risk aversion against the backdrop of a reduction in global demand, however, the currencies of countries with a surplus can experience exactly the same problems. In other words, surplus countries tend to be economies with higher betas and are, in principle, more sensitive to changes in real demand. And deficit countries are more sensitive to nominal factors such as global liquidity. Thus, the conventional wisdom that the currencies of countries with a surplus will feel more confident than the currencies of countries with a deficit needs to be tested.

Secondly, in this case the concept of "dollar smile" applies. A soft landing in the US economy may lead to the preservation of risky strategies, while USD/Asia pairs will trade lower. However, if investors suspect that the weakening of the US economy will take on a wider scope, a risk reduction trend may begin, in which case the USD/Asia downtrend will face serious difficulties.

Observation 2: China is the most vulnerable in Asia.

Although all Asian countries are dependent on US demand, China is perhaps more sensitive to changes in the level of consumption in this country, while Japan and Korea are more resilient, as they export twice as much capital goods as commodities. This is another reason to believe that this period of weakening of the US economy will be less painful for Japan than the previous ones. In addition, China's vulnerability could also be exacerbated by Beijing's restrictive yuan policies. In this aspect, it is necessary to control not net exports, but capital expenditures and speculation in the housing market. If the US economy slows down growth rates, Beijing will be in a difficult situation, in the face of the need to tighten policy in a situation of a weakening global economy. However, at the same time, a blow to export volumes could ease the pressure on the yuan. But at the same time, Chinese exports can remain quite high, receiving support from Europe and Japan. But overall, this particular kind of easing will certainly stab Asian economies in the back.

Observation 3. European inequality.

Germany stands apart from other European countries. It is more than others dependent on the export of means of production. The divergence of world cycles of consumption and capital spending can only increase the divergence in Europe and complicate monetary policy decisions.

Our forecast for USD/Asia

Stephen Yen, Morgan Stanley

I rummaged in my archive ... it was written in September, but I think there is nothing to rewrite and comment on ...

CIA - foreign exchange market in context.

In 1972, David Rockefeller decided to become the ruler of the non-communist world. In 1973, under his leadership and with the active participation of Z. Brzezinski (who was then the coordinator of the actions of the State Department, CIA, FBI, NSA, etc. in the US Presidential Administration), the Trilateral Commission was created, a closed club of billionaires and their advisers. The Commission brought together the leaders and owners of the largest banks and monopolies in the United States, Western Europe, Japan. Main theme: in modern world the joint efforts of "individuals" can give more than a clumsy bureaucratic apparatus, moreover, being under at least weak, but still public control. In the conditions of the end of the crisis of the 70s, the commission began its work with attempts to resolve the main economic and monetary problems of the capitalist world. By a "strange" coincidence, in the early 70s, the CIA provocateurs Solzhenitsyn and Sakharov raised the topic of the importance of creating a world technocratic government.

Do not underestimate the connection of the US oligarchic clans with the CIA.

Members of the Mellon, Morgan, DuPont, Vanderbilt, Armor, Bruce, Ryan families, etc., served in the CIA. The American publicist D. Pearson wrote that about the OSS, the ancestor of the CIA during the Second World War, “it consists of bankers from Wall Street.” CIA director Wiesner, the owner of a huge fortune, threw paychecks on his desk and did not receive it for years (the checks were discovered after his suicide in 1957). In the governing bodies of the CIA there have always been representatives of the true masters of the United States, who gathered not to accumulate information, but to act - to ensure their class interests by methods of secret war. By the way, Allen. Dulles, one of the founders of the CIA, believed that the collection and processing of information should be no more than 1/10 of the total amount of work carried out by this department. The creation of the CIA was an important stage in the organizational design of the US secret government, and the last attempts to put the activities of this office under the control of Congress ended in failure back in the mid-70s.

On the importance of controlling the foreign exchange market, the CIA was indicated in one of the first directives of the Council national security- 4\A dated 12/14/1947: “... support for political parties; quasi-military methods, including assistance to insurgents and sabotage; economic activities related to foreign exchange transactions". As we can see, sabotage and direct support of the rebels are on a par with currency speculation. Another, similarly ancient CIA directive SNB 10/2 dated 18.6.1948 states: “... activities are planned and carried out in such a way that their source, the US government, does not appear outwardly, and in the event of exposure, the US government can plausibly deny to the end all responsibility for her."
The fact that the directives have not lost their relevance in our time is confirmed by the activities of Mr. Soros, of course, if you look at it more closely.

Of course, a legitimate question may arise, does the CIA have the resources to significantly influence the foreign exchange market? In 1975, Congressman Koch inquired with CIA Director Helms about the number of employees and the budget of the office.
To which he received an answer that the deputies of Congress are not required to know the CIA budget for which they vote, and the appropriations are included mainly in large appropriations for other departments. In the time of R. Reagan, even such questions were no longer relevant. But Congressman O. Pike's commission in 1976 got to the bottom of the CIA budget. An estimate of the total costs by eye, the commission was denied specific data, revealed an amazing figure - at least 10 billion dollars (and how much did they not accumulate?), while the official appropriations for the CIA amounted to about 3 billion and this was in the distant 70s !! ! (And today??? If there were no Al-Qaeda, it would have to be invented!!!) In relation to gold, the dollar has depreciated more than five times during this time.

The activities of the CIA in the information field are widely known: from the production of pornographic films to the financing of radio stations such as Free Europe, where S. Shuster began his career. Even in the distant 60s, about 1000 books were published at the expense of the CIA, annually in various countries world, not to mention periodicals. From the very beginning of its activity, the CIA has been developing methods for controlling the behavior of not only the individual and groups, but society as a whole. Back in the 70s, CIA representative D. Berend said: “We have enough doctors working in any field of knowledge to staff any university.” Where can Hayek, a grant-eater so respected by our Colleague umatv, to Professor W. Rostow, a staff member of the CIA with his anti-Marxist concept of "stages of growth". I would not be surprised if the so-called technical analysis, as a program for controlling the foreign exchange market, was developed there. How could imperialism, with such a serious approach, have missed the beginning of the crisis? As an explanation, I propose to turn to the primary source of a pragmatic bourgeois society, created by the bourgeoisie for the bourgeoisie - to money.

The diverse cooperation of academic science with the bourgeoisie has led to the service of the class interests of the ruling elite, not only in the United States, but also in Ukraine - the prostitution of science.
Bodies of political investigation, engaged in one way or another in the fight against dissent receive a significant part of the budget. (Military Intelligence, IRS, FBI, CIA, NSA, Police, Civil Service Commission, Office of Economic Opportunities, Passport Bureau, etc.) The Americans C. Osborne and A. Rosso began their joint article with the words: working more people, than in agriculture. More is spent on their payment than on the coal industry.”
I would like to note a significant increase in the number american army, in 2010, which has rich experience in suppressing riots in the United States (only in 1967 in Detroit 43 were killed, hundreds were injured, 7200 were arrested).
Considering the links of the CIA with the US oligarchic clans and their interpenetration, the office has unlimited resources to fulfill the main task of imperialism today: the effective export of the crisis. That is, a global scarlet run with the inevitable, as I believe, dollar hyper in the final - the death of the scarlet herd. The class hatred of American imperialism finds its expression through the activities of the CIA, which protects and spreads throughout the world the principle underlying American statehood - the exploitation of man by man.

The volatility of the exchange rate (volatility) and the high liquidity of the foreign exchange market are a powerful attraction that allows Forex players to feel free and receive significant income in a short time. And since you can make a profit both on an increase and a decrease in exchange rates, even during an economic downturn, 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 endurance, knowledge and experience, you can be left with nothing.

How the Forex market works

International Monetary Forex market(FX) is a platform for the free exchange of currencies and profit from exchange rate differences. Changes in rates are regulated only by supply and demand. Forex is not tied to any geographical point and works around the clock.

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

The main participants in trading processes are commercial and central banks, investment funds, companies that are engaged in import and export, multinational corporations, national exchanges, brokers (intermediaries between buyers and sellers who receive interest from transactions), dealers and individuals who carry out financial transactions for profit (traders).

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

This statement is both true and false at the same time. Despite the fact that any adult citizen without a diploma of economic education, the player himself must nevertheless take care of his continuous specialized training (usually through self-education) and increasing experience.

The main advantages of the global Forex currency market are high liquidity and globality. For a trader, there is another important advantage of Forex trading - the availability of leverage provided by brokers. Leverage allows you to conduct transactions in the absence of the required amount or to increase the volume of the transaction in order to increase your potential benefit (but at the same time - and risk!) From the exchange rate difference. Naturally, the larger the amount spent, the greater the gain (or loss) will be.

Introduction to the Forex currency market: trader's tools

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

Deals

The main instrument of any business is a transaction. Forex is no exception, this over-the-counter foreign exchange market has several of its own, specific, types of transactions. Consider the trader's tools.

• Spot- an instant transaction, but in interbank practice, settlement on it is made in real currency within two days. Therefore, a spot transaction is also called "cash", "cash", "T + 2" (Time + 2 days). The types of spot transactions also include TOD (today - today) and TOM (tomorrow - tomorrow). The exchange rate is fixed at the time of the transaction, and not on the day of delivery of the currency - "today", "tomorrow", "on the second day". Present current Conversion operations (“spot”), like all other types of foreign exchange transactions, are carried out by non-cash and even virtual methods, although the meaning of transactions and their terminology in the spot market have remained the same.
  In this way, spot price(or spot rate) is the price of a real commodity (currency) sold here and now on the terms immediate fulfillment of obligations (supply). The spot rate is determined automatically as a result of trading, but can be negotiated individually by counterparties - parties to a currency exchange agreement. This happens when making especially large transactions.

The term "forward market" - does not carry the meaning of "immediate", on the contrary, it assumes that all transactions in this market are made with a delay in the fulfillment of obligations (supply of currency) for a period of more than two days. This futures market is opposed to the spot market, which implies the immediate fulfillment of obligations. Playing tools on futures market, or types of transactions (contracts), are forwards, futures, options and other derivative instruments.

• Forward- a trading tool on the Forex currency market, which involves fixing the exchange rate for a future date (deliveries). As a transaction (contract), a forward cannot be broken, and is obligatory for execution on the established conditions. That is, by the time the obligations are fulfilled, the exchange rate may change up or down, but regardless of this, the exchange will be made at the rate at the time of the transaction. The deal can be concluded for a period of 3 days to 5 years. The participant gets the opportunity to withdraw money only after the expiration of this period. Forwards are concluded to play on the difference in exchange rates, they not are standardized and used in over-the-counter markets, and therefore less liquid than other types of transactions.
  Forward price (forward rate), usually always higher than the spot price (spot rate), since until the moment of settlement, the money can be put, relatively speaking, on a deposit in a bank, where additional interest on the contract amount will accrue. The forward price is calculated in two ways: either by adding a premium to the spot price or by subtracting the discount from the spot price. But first you need to determine the size of the premium or discount:
  where: P - premium; D - discount; S ($/€) - current spot rate (price); R€, R$ - bank interest rates on deposits in € and $ respectively (or in currencies from any other currency pairs); n - the duration of the forward transaction.

  In special bulletins you can find forward rates at different dates already calculated using interest rates LIBOR. To analyze and compare the efficiency of investing at the forward price in the international and domestic foreign exchange markets, the forward rate can be determined as the ratio of interest rates taken on an interbank loan multiplied by the spot rate.
  

  

  where: Fn($/€) - forward exchange rate (price); S($/€) - current spot rate (price); R - interest rate in the interbank domestic market; L - interbank LIBOR rate.
• Futures (slang - "fuch") . Such a transaction is similar to a forward, moreover, this is a kind of forward with the difference that it standardized in terms of size and terms of circulation and is of a repetitive, rather than one-time (unique) nature. Futures means the exchange of specific currencies on a specific day at a predetermined rate. Futures transactions are concluded in relation to individual lots. If necessary, the rights to the futures can be resold to another person. Currency futures differ from currency pairs in the form of a ticker, trading platform and contract expiration date, they allow you to analyze the volume of exchange trading, which in itself is very valuable. In other aspects, they are identical to a currency pair - even the futures chart repeats the chart of a currency pair.
  Futures price is based on the forward and spot prices and is usually identical to the former unless it is distorted by differences in tax legislation different countries, terms of guarantee payments and some other factors. The difference between the spot price and the futures price is usually called the "basis" or "base", which are usually positive (the "contango" state), but can also take a negative value (the "backwardation" state). Backwardation occurs when the futures price is below the spot price.
  Historically, the futures price is expressed in US dollars, more precisely, these transactions are carried out in world currencies against the dollar. In addition to Forex, futures are widely circulated on the Chicago exchanges (CME, CBOT, IM), Paris (MATIF), Singapore (SIMEX), Tokyo (TIFFE), London (LIFFE), Toronto (TFE) and Sydney (SFE) exchanges, are used in interbank trade ( over the counter).
• Option It's a kind of "deal for a deal". To be more precise, it is the provision by the seller of an option to its buyer of the opportunity, or the right (but not the obligation!), to conclude a certain transaction according to a previously agreed exchange rate on a specified date or time period. At the same time, the seller of such a right (contract) assumes the full obligation to make a deal in accordance with the terms of the option, and the trader, at his own discretion, may not use the purchased right.
  Considering that the transaction can be multidirectional, FX options are for sale ( put option) - are purchased in anticipation of a fall in the price of a currency pair, or to buy ( call option) - are in demand with the expected increase in its price, as well as bilateral ( double option). There are also exotic types of deal contracts, such as barrier options ( barrier options), also called trigger options, or options with obstacles. Their essence lies in the fact that payments under these contracts are "included" ( knock-in) upon reaching the trigger point - a certain level of the price of the underlying asset, and "turn off" ( knock-out) - when the price of the underlying asset falls. The underlying asset can be a currency pair. Barrier options and their variations (Up&In, Up&Out, Down&In, Down&Out) allow you to build complex and incredibly complex market strategies (for example, "Bull Spread"), which are used by sophisticated traders.
  FX options are more liquid than stock options, because in Forex there are contracts that are only a few days long, while in the exchange, expiration times can reach many months. At the retail Forex level, they became available to traders only in 2009. Options, in terms of value date (execution of obligations), are distributed during the year by months of delivery, and contracts with the month closest to closing account for the maximum activity of the Forex market. In this context, the options market begins to behave like a spot market. And if you have a desire to keep the position of the pair, say USD/EUR after June, then you will have to sell it and buy the July USD/EUR at the same time. There is no reason for this on spot trades, as all positions are rolled over to the next business day automatically due to overnight (see below).
  The profit of the option seller (writer) consists in the premium paid to him by the buyer for the opportunity to take advantage of a profitable deal, the size of which, in turn, changes based on market conditions. The main plus for the buyer of an option is that the risk is limited to the price of the option, the minus is that a premium is paid for transferring this risk to another party. In this vein, options can be viewed as a kind of insurance policy.
  So, FX options are used not only as trading instrument, but also an insurance (hedging) tool for managing risk in a cash transaction.
• Currency swap, or roll-over, storage, overnight. At its core, this is monetary transaction in the Forex market, and not a conversion deal, although it formally looks like one. It is the simultaneous purchase and sale of currency on equivalent amount, but with two different value dates (terms of currency delivery, fulfillment of obligations).
  An example of a standard swap: a counterparty (bank, broker, trader) bought 1 million EUR against USD on a spot value basis (immediately, up to two days) and immediately sold it on a three-month forward, i.e. made a three-month EUR to USD swap. Here the goal is to be able to "step over the night" - hence the name overnight- through the trading session, through the end of the delivery period, keeping trading position , as well as reduce currency risks, reduce the cost of borrowing funds in another currency. Swap operations are mainly used by large market players.
  And it is important for an ordinary trader to understand that these operations are carried out automatically at 21:00 GMT through a broker using an installed trading platform and are almost invisible to the client - everything looks like a continuation of the rate. As a result, a currency swap (overnight) is funds retained or added to the client's account (depending on the difference in interest rates for different currencies) for the prolongation (transfer) of an unclosed position to the next day. In many brokerages, this service has a fixed fee, which encourages clients (traders) to short strategies and close positions during the day. It goes without saying that overnight can only be held if you use leverage, that is credit funds broker, and not entirely with your own money.

So, only at the first acquaintance, the above types of transactions and operations may seem intimidating. In fact, they are quite simple technically, although it will take some time to master them, carefully working on a demo account, in order to get used to and get comfortable. The situation is much more complicated with the skills of analyzing the market situation and developing a trading strategy, especially with the use of FX options. Since Forex is, by definition, a spot market (over 90% of all transactions are closed within 48 hours), then any operations should begin with spot transactions. And it is better to open positions in the derivatives market, which is also a part of Forex, where forwards, futures, options and other types of derivatives are traded, after a couple of years, when personal professional experience has accumulated.

Analysis

To make deals with maximum profit, it is important to understand how the Forex currency market, which is part of the global financial and economic system, works. A novice trader needs to pay attention fundamental (FA) and technical analysis (TA) .

The first one involves studying the relationship economic processes, requires knowledge of the deep foundations global economy and politics. The bidder needs to know how macroeconomic and inextricably linked political factors affect the situation in the economy of individual countries and regions, take into account that force majeure circumstances (natural and man-made disasters, terrorist attacks, local wars, political upheavals) can have a decisive influence ) and mass psychology (expectations, rumors, self-fulfilling panic moods).

The fundamental difference between fundamental analysis and technical analysis lies in the approach: FA proceeds from the fact that the cost of currencies, like any commodity, is governed by the law of supply and demand. And supply and demand depend on a number of fundamental economic factors: the state and growth of the national economy, changes in the discount rate and monetary policy, trade balance dynamics, policies central bank etc. Consequently, the value of currencies can be influenced by certain economic and political measures. For FA, indicators are important not in absolute, but in relative terms, that is, indices consumer prices and sentiment, labor costs, unemployment, GDP growth, etc. In order to predict the Forex market, the most important events and news (expected and planned, unexpected and random) are studied, which can be:

• trade, economic and political negotiations;
• agreements and decisions of interstate and branch unions, alliances, cartels;
• meetings of the Fed and other central banks;
• statements by leading government officials on economic and political topics;
• speeches, reports and forecasts of leading economists, political scientists, rating agencies, large commercial banks, etc.

The national economy has one important property: it is inertial and cannot quickly slow down, turn around or accelerate, resembling a heavy icebreaker. But the prerequisites for future phenomena are being laid today. Therefore, FA is necessary when building medium-term and long-term trading strategies on Forex, which without it is simply impossible to implement.

To conduct FA, you need to “turn on the filter” and understand the true significance of the ongoing events - some of them, seemingly decisive, may not have any effect on the movement of currencies, others, almost imperceptible, may lead to a reversal of existing trends. This is a complex task that requires extremely high qualifications - understanding the communication channels and the mutual influence of currencies and other investment instruments competing with them, historical development interstate relations and national monetary systems - therefore, only large participants in the Forex market can afford FA: banks, investment funds, transnational corporations, some brokerage companies and outstanding traders.

But even if you have the necessary experience and education for the FA, this will not be enough. FA is not applicable and even useless for short-term and intraday strategies due to the above factors. And to play long, in addition to knowledge and skills, you need significant capital in order to place stop orders for months or even years in advance and suffer losses on open positions in several figures on the chart, which is implied by the use of long-term trends.

But the doctrine of technical analysis is diametrically opposed to FA and is extremely laconic: a real-time chart of changes in prices for currencies already takes into account the factors of influence described above - economic, political and psychological - which means that for success you should simply analyze this chart. It shows a retrospective of price movements and contains all the necessary clues (signals) regarding a change in trends (bullish, bearish, sideways, etc.). Since, according to the TA 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. A trader, using today’s rich toolkit (“Elliott Waves”, “Japanese Candlesticks”, MACD, RSI, etc.), must choose a forecasting horizon, in this time period it is correct to build a trend, determine its strength and possible reversal points, and therefore - entry points to the market and closing deals. As a result of Forex technical analysis, it becomes possible to say when, within what limits and with what probability a trend change will occur, how long the new direction of price movement will last.

The information basis of analytics are graphical and mathematical tools that allow you to analyze price dynamics, as well as statistical data and the principles of probability theory. Graphic display of the price can be presented in the form of graphs, histograms, charts and "Japanese candlesticks".

It is important for a novice trader not only to know the basics of analysis, but also to use a set of available tools, and primarily indicators, which are based on algorithms that allow you to calculate market price fluctuations. The indicator gives the trader the opportunity to enter trades with the least risk and close positions in a timely manner. Of course, the use of indicators cannot and does not give a 100% guarantee of success, but it allows minimizing possible losses. The main advantage of indicators is that they eliminate the need to carry out calculations manually, but by this they are able to lull the trader's vigilance.

There are a huge number of author's indicators, but the time-tested and most popular of them are MACD (uses three moving averages), Ichimoku (uses five lines), RSI (determines the strength of the trend and the likelihood of its change) and ADX (trend indicator).

So, fundamental and technical analysis, on the one hand, are antipodes, on the other hand, they are inextricably linked and complement each other. Technical analysis, like a vicious little dog, is trying to reject the postulates of fundamental analysis, which, in turn, does not comment on technical analysis tools in any way. It's like in physics: the laws of the micro- and macroworld - they differ, and sometimes contradict each other, but at the same time they operate in a single space and time. In any case, a trader has no other means than TA when playing at short distances, and there is nothing better than FA when building long-term strategies.

Strategies

Necessary condition successful Forex trading is the correct alignment of the tactics of their actions. Knowledge of strategies makes it easier to understand the market and the peculiarities of its movement, and, accordingly, helps to choose the right time and direction for opening a deal. Strategies can be simple (based on the rules for entering and exiting Forex), as well as indicator (their basis is the interaction of indicators) and non-indicator (based on graphic elements, their indicator is price).

Indicator strategies are most convenient for beginners, as rate changes are generated automatically. Traders in this case build their own trading scheme based on several indicators. However, it is important for beginners not to get carried away and use no more than three to five indicators, because otherwise there will be too many variables for analysis.

The main advantage of non-indicator strategies is the ability to effectively predict price changes, and, accordingly, high profitability with minimal risks. However, the use of this strategy requires certain skills and composure. Experts recommend launching it during a period of weak market movement.

There are also breakout strategies that are based on the principle of breaking highs and lows in value, and Martingale strategies that involve the simultaneous conclusion of several multidirectional deals with an increasing lot.

From non-professional people or outright scammers, you can hear that some specific Forex trading strategies are win-win, since even with several unprofitable transactions, an overall positive result will be achieved. This is not true. There are no universal strategies, as well as uniform conditions for their application.

For successful trading, you need to own two or more strategies and skillfully apply them. The most popular of them include:

• strategy for ADX and MACD indicators . Simple Strategy, in which the indicators of the MACD indicator are used as indicators of the direction of trade (the price chart is not used in this case). Perfect for a 15 minute price chart;
• nail-driving strategy. This universal strategy uses the Parabolic, Awesome Oscillator and Accelerator Oscillator indicators;
• scalping strategy "Waves MA" characterized by simplicity and aesthetics. It is based on the Moving Average group of indicators. The work is carried out on the main trading pairs with a reduced spread (up to 1.5–2 on four-digit quotes);
• THE7 strategy for daily charts characterized by simplicity and power. For work, a moving average and a cost chart are used.

Software

The analysis of a large amount of information and the efficiency of actions in the foreign exchange market are provided thanks to special applications for PCs and mobile devices. These softwares are called trading platforms, and their user applications are terminals. They are equipped with tools for technical analysis, news feed 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 analysis, but we do not recommend doing this. At least until you reach a certain professional level.

Although the possibilities of the platforms are quite wide, they are not always enough for traders. For comfortable work on Forex, special scripts are designed - small programs that allow you to place pending orders, close all orders simultaneously, calculate the breakeven level, manage open positions and perform other operations.

Website informers allow you to always be up to date with Forex news. These self-updating sources provide insight into trading progress and earnings large companies, as well as get an analysis of currency pairs, stocks and indices.

And finally, demo accounts. Brokers usually offer the opportunity to get acquainted with trading terminal, tools for analyzing and making Forex transactions by opening a demo account, which allows you to train on the market with the same software functionality, but without real money investments.

Books and information portals about the foreign exchange market

Trading on the Forex currency market provides for constant development - expanding the knowledge base and developing skills. Experienced players constantly study specialized literature, forums and blogs. A beginner should start by getting acquainted with the works that have become classics, for example, by Alexander Elder (“How to play and win on the stock exchange”, “Trading with Dr. Elder: an encyclopedia of the stock game”, “Basics of stock trading”), John Murphy (“Technical analysis Futures Markets: Theory and Practice"), Lewis Borselino ("Day Trading Textbook", "Day Trading Task Book"), Jack Schwager ("Technical Analysis. Full Course"). The novice trader will also be helped by Forex portals, such as www.financemagnates.com, www.forex.ru, www.mt5.com, www.fortrader.org, www.forexmaster.ru other.

Rules for successful trading in the Forex market

Many players are disappointed in Forex after the first unsuccessful steps. To prevent this from happening, a novice trader needs to follow simple rules that will help avoid losses and make the process of working on the market interesting and productive:

1. Study specialized literature, be sure to get acquainted with the principle of organizing Forex trading and understand the mechanisms of triggering transactions.
2. Start trading on a training account (demo account), which is a simulation of real trading and allows you to hone your skills. And only after trying various tools and strategies, switch to real money.
3. Trade small amounts Don't risk your entire deposit. Try to use no more than 10-30% of the deposit.
4. Learn from brokers, take part in webinars, attend courses.
5. Use additional features, for example, invest in joint accounts (PAMM), and also earn on affiliate programs.
6. Control your emotions and don't chase quick profits. Soberly assess the situation and do not panic because of a loss; allocate time wisely.
7. Use indicators and advisers. They will help you analyze the market and from time to time make transactions automatically.

Careful preparation, thoughtful analysis and composure are what a novice trader needs to successfully trade Forex. To master this way of earning under the power of anyone. Reputable brokerage companies provide extensive information opportunities and training programs that will help you understand the intricacies of trading and learn how to plan your actions.

Warning : the contracts or financial instruments proposed for conclusion are highly risky and may lead to the loss of the deposited funds in full. Before making transactions, you should familiarize yourself with the risks with which they are associated.