This lesson will discuss methods of decision making, factors influencing the market, analysis of these factors, the interests of market participants Forex.What is Forex?
Foreign exchange market Forex (FX) - a shortening of the term Foreign Exchange Operations. The market currencies do not have a single center. Forex trading is conducted by telephone and through the facilities of a computer network.What drives the market Forex?
The main factors affecting the exchange rates:
movement of capital between states;
balance of mutual payments;
state of the economy of States;
projections made on the basis of charts and technical analysis;
political and psychological factors;
Inflation and interest rates.
Any of these factors may cause unexpected turns of the market Forex. In some cases, the mere expectation of economic change can affect changes in the Forex market is stronger than the factors themselves change. In addition, the movement of the currency market affects the behavior of managers. Most often, they are each in their logic, but when the curve motion currency reaches a critical point, the behavior of the Forex market is predictable and the reaction of managers is the same. As a result, a jump in prices, and capital are embedded in the same position.Participants in the Forex Market
The main participants of the Forex market are:
commercial banks;
currency exchange;
central banks;
companies carrying out foreign trade operations;
investment parties;
brokerage firms;
individuals;
commercial banks.
Below is all the more.Banks
Banks accumulate market demand for currency conversion, raise funds, clients and leave them to other banks. In addition, banks hold accounts of other market participants and carry with them the necessary conversion transactions.
Foreign Exchange Market Forex - a market of interbank transactions. On world currency markets are strongly affected by international banks, the daily volume of transactions that reaches billions of dollars. These include the following banks: Barclays Bank, Citibank, Chase Manhatten Bank, Deutsche Bank, Swiss Bank Corporation, Union Bank of Switzerland and others.Currency Exchange
Currency Exchange, thanks to the development of telecommunications, working around the clock (but not all). The largest international stock exchanges are the London, New York and Tokyo exchange markets.Central banks
Central banks have the following functions: conduct foreign exchange intervention, affecting the exchange rate, managing foreign exchange reserves, as well as regulate the levels of interest rates on investments in local currency.
The greatest influence on world currency markets has the Federal Reserve System (US Federal Reserve or FED), as well as the European Central Bank (European Central Bank) and the Central Bank of the United Kingdom (Bank of England, also known as the Old Lady).Companies that conduct foreign trade transactions
Participating in international trade business has stable demand for foreign currency (it's importers) and supply of foreign currency (ie the exporters). Typically, these organizations direct access to foreign exchange markets have not. They spend the conversion and deposit transactions via commercial banks.Investment participating
Participants represented international investment, pension, mutual funds, insurance companies and trusts are implementing policies of portfolio management, placing the funds in securities of governments and corporations of different countries.Brokers and brokerage companies
The brokerage firm, which has requested information on courses, is a place, where a real exchange rate on already deals.
Brokerages reduce the buyer and seller of foreign currency for foreign exchange transactions between them. Dealers brokerage firms are quoting the currency with the spread, which has already laid their fees, because the Forex market is no commission as a percentage of the transaction, or as a predetermined specific amount.
Commercial banks receive information about the current level of satisfaction from brokers and brokerage firms.Individuals
Individuals conducting non-trade transactions such as, for example, transfers of salaries, pensions, royalties, foreign tourism, the purchase / sale of foreign currency. This is the largest single group, conducting foreign exchange operations with speculative purposes.