Forex Central Banks

Forex Central BanksCentral banks are major participants in the foreign exchange market, although the reasons forthey are not speculative. The main objective of central banks is to control and regulateamount of money offered in a nation to achieve its economic objectives. A bankCentral may intervene in the currency market for the following reasons:· To gain stability in the exchange rate and prices· To protect certain levels of the exchange rate and inflation· When the main economic objectives are to be achieved.Some central banks are more conservative than others, some regularly involved(As the Bank of Japan *) and not so often as the Federal Reserve (bankCentral America).The major central banks are:

1. Federal Reserve US
2. The Bank of Japan
3. The Bank of England
4. The European Central Bank
5. The Central Bank of Canada
6. The Swiss National Bank

* The Japanese central bank used to intervene much in the past, but not recentlythere has been much intervention.

Forex Top Participants

Forex Top Participants Decades ago the most important participants in the Forex market were banks commercial taking positions against other banks for a variety of reasons including speculation, to cover, among others, and companies (exporters and importers of goods and services) used to banks for their transactions.

 This was approximately 70% of the generated volume of currency transactions. These days this has changed. With the development of technologies and the ability to perform intercontinental transactions more easily other financial institutions and non- Financial can participate in the Forex market. Likewise do investors and operators around the world. Now, speculation has a stake of more than 80% of the volume generated daily.

These transactions are conducted from banks to small operators and investors. The main market participants are banks, central banks, companies commercial operators and individual investors and brokers.

They make operations for a variety of reasons such as: • profit from currency fluctuations • To protect against currency fluctuations (hedging) • For interest earnings generated by interest rates. Banks Banks are the main participants of the currency market. Most transactions are made through the banks themselves (speculative and commercial).

Great Transactions are made by these banks (billion dollars a day) and are made by account own and client orders. Speculation of banks is about 70% of volume generated daily. Ttē

Forex vs Stocks vs Futures

Comparation Forex vs Stocks vs Futures

Forex vs other markets

Forex vs other markets

Forex vs Stocks

Forex vs Market

Operate from anywhere

Operate from anywhere

The fact that the transactions have no physical location
all happen, we do operations anywhere in the world.


 We just need a phone or Internet connection where we can access the broker.

Below we look at two tables between the Forex market and other financial market.

Operations Specialist

Operations Specialist 

 Market liquidity allows us to operate only some
currencies, higher volume.

About 85% of transactions occur in the seven
major currencies mentioned above. This allows us to monitor, follow detail and
know each instrument better.

Forex need minimum Capital Risk

Forex need minimum Capital Risk

To the forex market requires less capital risk
other markets. Algunosbrokers incluse allow the opening of accounts with $ 1 (yes, you read

All right, just one dollar).

On average, the minimum investment is usually $ 300.
Of course, we can not expect to make a fortune in the capital, but definitely we
It can serve to enter the world market without risking large amounts of
money

Low transaction costs

Low transaction costs

The forex market is considered one of the markets Financial with lower operating costs.
Most brokers charge based on the following two schemes:

  Spread - The brokers charge a different price for buying and operations sale, the difference is that the broker stays.

  Spread and Commissions - Most brokers in this scheme charge a commission, but usually the spread is very small, so even transaction costs can be lower than the brokers that charge only spread.

 Powered by Easy trading

Forex Leverage

Forex Leverage

Trading in the Forex gives you the opportunity to have more to buy / sell other financial markets. This allows us to operate large amounts of money with a deposit small margin. Some brokers offer leverage up to 400: 1, you can control a position of $ 100,000 with only 25% or $ 250.

This in turn It allows us to maintain our risk capital to a minimum. This feature is like a double-edged sword. If leverage is not used properly it can work as a disadvantage. The more leverage we use, more of our "venture capital" at risk there. Imagine the following scenario: Two operators with the same capital but using different levels of leverage:

Operator A: uses 400: 1 with an account of $ 2,000
Operator B: uses 100: 1 with an account of $ 2,000

 If the two operators open a standard operation (100,000 units), the operator A will have at risk US $ 1.750 (2.000 to 250 = 1,750), while the B operator will only be at risk US $ 1,000 (2.000 to 1.000 = 1.000) *. * There are risk management techniques that allow you to reduce risk capital as stop orders or "stop loss".

 We will discuss this in more detail in the next lesson.

That's why we do not recommend using a higher leverage than 100: 1.

 Remember: the margin is always used as a deposit, the rest of the capital account is at risk.

Forex 24 hour market

Forex 24 hour market It is said that the forex market revolves around the clock. this means you can open or close positions from Sunday at 5:00 PM EST when New Zealand begins operations until Friday at 5:00 PM EST when San Francisco ends operations.
Operating sessions

Here is a table illustrative:
Sessions table

 Thinking - As you can see in the picture above, there are 4 hours that sessions London and New York meet, What might this mean in terms of volume?

 Map of the sessions of the World

Benefits of Forex Market

Benefits of Forex MarketTrading theForex market has some advantages over other financiaros market, among theimportant ones are: liquidity, 24hrs market, leverage, low transaction costs,small investment, specialized operation anywhere operations among others.Liquidity - The Forex market is by far the most liquid market in the world with more than2 trillion daily volume according to the Bank of International Settlements.Why is liquidity important to us? It helps in the following ways:- The most important advantage of all is that with the superior liquidity helps to have moreprice stability. With such a large market, almost always going to be someone interestedbuying or selling in the "current" price, making it easy to open and closeoperations. Recall however, that there are periods of high volatility which isprobably we do not have a difference between the price you want and they give us.- In the highly liquid, most of the time, we can enter the market with executionsconsistent, but as other markets in periods of extreme volatility we haveinconsistent performances.- The very high liquidity also makes the forex market is very difficult to manipulateextensively. If any of the participants would like to manipulate, I need hugeamounts of money (millions) making it virtually impossible.Volume Generated by Country[Table 1]Source: Bank of International Settlements (BIS) 2006 SurveyIn the above chart we can see that UK and US They have about 50% oftotal volume, as a rule of thumb, the more volatility there is, the larger themarket movements. We'll talk about this in future lessons.Market 24

6 -Forex Course - Where all transactions occur?

Forex Course - Where all transactions occur?


Unlike other financial markets, there is a physical place where all operations
They are made in the forex market. All transactions are made through systems
electronic communication (telephone, online platforms, etc.) between banks, large
companies, investors, operators, etc. This is called market "Over the Counter"
(OTC).

Thinking - How do you think that all transactions are measured at the Market
Forex? Let's put the stock market perspective, all transactions
New York Stock Exchange (NYSE) are performed in the NYSE building, so they can
measure the volume of purchase and sale made at any point in time.
But as in the forex market there is not a physical place where all transactions occur,
How can you measure its volume?

What is exchanged in the forex market?

What is exchanged in the forex market? Money, simple as that. Currencies are bought and sold freely on the market. This transaction involves simultaneous purchase and sale of two currencies. For example, you have information that suggests that the Euro will go up in value, Here what we will do is buy the Euro pair: EUR / USD (Euro / US Dollar). When you buy EUR / USD, which actually doing is buying EUR and simultaneously selling USD. When you buy EUR also said that you are "Long" in Euros. When you sell the EUR, also it is known as "short" in Euros. More than 80% of the volume in the forex market is generated in what is known as the seven big pairs: - The US dollar (USD)
- The Euro (EUR)
- The British Pound (GBP)
- The Swiss Franc (CHF)
- The Canadian dollar (CAD)
- The Australian Dollar (AUD)
- The Japanese Yen (JPY)

3 - Section II: The Forex Market

Section II: The Forex Market What is the forex market? Forex is the acronym for "Foreign Exchange" or exchange currency.

2- First lesson is structured as follows

This lesson is structured as follows: Section II: The Forex Market - In this section, we will ask, What is the market Forex? When did it all begin? What is exchanged in the Forex market? Where is the place physical forex? Section III: Benefits of Forex Market - Forex market compared to other financial markets and see what makes it attractive. Section IV: Key Participants - We'll see who participates in the foreign exchange market and which is the way they do. Good luck!

Section I - Forex Course Introduction

Section I: Introduction Welcome to this your first lesson in the course SF Free Forex Course free. We expect find the content of this interesting, informative and to help your future as operator. In this lesson you will learn all the basic information about the operation of foreign exchange (Forex). Although these lessons will find great depth in the more advanced topics covered themes can be found in the course Advanced SF Forex training. In any business, from used car sales, even in the forex market, it is very important to understand all aspects of it, from the aspects more essential to the most complicated issues. Imagine this scenario, if you venture into the used car business, buy a car lot and trying to sell them without information? I do not think, if I did this probably end with a different car to use each day. What would you do then? The most Chances are that at first do some research about the used car market: who are your customers, see the strategies of competitors, an analysis of the advantages and disadvantages of the market, and more. The same applies to the operation of the market. I have seen many traders get a margin call, when you do not even know what it means to leverage other even know what a margin call! (Do not worry if you are unfamiliar with these terms, discuss in the next lesson). In this lesson, we will analyze basics of the forex market from as formed, main participants, advantages and disadvantages as compared market exchange with other financial markets like stocks or futures market.