Large commercial banks that trade between each other through Electronic Brokerage System (EBS). Each bank will have its own price quote is reserved only for banks related. The market of this type can not directly access the retail trade.
Retailers may access the Forex market through online market, which generally operate outside the United States and Britain. This type of market such as this usually have relationships with several banks on EBS; the greater the trading volume on the market, then the closer relationship with the bank.
Market Hours
Forex trading is a market that is active during any bank that is open at one of the world's financial center. Effective trade policies began early Monday morning in Tokyo until Friday afternoon New York time. If it refers to the time of GMT, trading week occurs from Sunday night until Friday night, or 5 days = 24 hours per day.
Price Reporting Trading Volume
Unlike other markets, there is no consolidated tape in Forex, price and trading volume are not reported. However, it is possible trades occur simultaneously at different rates among the various parties on the market. Market prices are usually closely related to a larger market. Pricing is usually relatively close between the market, however, major differences between Forex and other markets is the lack of data volume that has traded in any time.
Recent technological developments have succeeded in breaking the barriers that once stretched between the Forex market retail clients with inter-bank market. Online forex trading revolution was originally conceived in the early 90s, who opened the doors to retail clients by connecting with the end user market.
With sustained by fast internet access and CPU power, the online trading platform located on the user pc computer now serves as a gateway to the Forex market is liquid. Retail clients now able to transact with the world's largest banks, with the same price and execution. This business was once dominated and controlled by large inter-bank and is now not uncommon for individuals that have the same opportunities as big banks.
Breakthrough in the technology sector is not only changing the way people access the Forex market, also change the way decisions in trading. Research shows that the main reason for failure is the lack of benefit from the discipline that is dedicated to achieving a successful trading and risk management. Develop iron discipline is among the attitudes that must be put forward by the trader.
With the help of modern trade or software, then the trader can now develop a comprehensive trading system, with detailed trading plans including the point of entry, exit and risk management models. Furthermore, the trader can do is stand back and test and trials in progress as part of the draft strategy in a demo account before injecting capital in the real account.
When trading system software first introduced, the trader need programming expertise and solid background in analyzing technical mathematics. Software company's efforts to make its products more adaptive to the general public, trading system software is currently easier to use. At this point, a non-programmer with the technical understanding of the mathematical analysis of the basic level can enjoy a trading system which he said is easy to do.
However, you need to understand, that the trading system does not provide an advantage scraper concept only, because this system serves as a guide for beginners to start a trade. Over time, traders are able to develop a trading system that suits their individual trader.
Spread
Spread the cost to be incurred by a trader. In other words, Spread is a source of revenue for the company that organizes trade. Forex market, spreads can be quite different depending on the company that organizes and parties involved.
Inter-bank Forex market can have up to 1-2 pips spreads and spreads can be widened to 30-40 pips when dealing with individual customers. If you look at Forex shops spread around the tourist areas or tourist, then you will find the spreads of 400 to 600 pips.
Margin
Margi is the amount of equity that must be maintained so that the position remains open. Margin serves as a deposit for a trader to determine if the transaction at a loss. Margin account gives consumers the opportunity to open a position with a higher value than the value of funds that have been incorporated into the previous account.
Order Types
The forex market has various types of orders. Here are some of the major types of orders that can be found on any forex broker.
Market orders - Purchase Order / buy or sell / for execution according to the best price available at a time when it is. Usually called the market price.
Entry orders - Request from a client to the broker to execute buy or sell a certain amount and the currency pair as well as a specific price.
Stop Loss - An order to close a position when it reaches a certain price. The concept is designed to limit the loss to a trader's position. If the position is opened by buying a currency pair, the stop loss is a request to sell the position when the price falls to a certain level and vice versa. Traders are strongly advised to use stop loss orders to limit losses. Stop loss orders are also important when the investor will enter into a situation where they can not monitor the trade in unlimited time.
Take Profit - Where a request to close the position when the price has reached a specified level of profit. It is designed to lock in a profit position. Once a price advantage over a predetermined level then take profit becomes a market order and closing the position.
Good Until Cancelled (GTC) - In forex trading, most orders are GTC, that is, an order will be valid until canceled, regardless of the trading session. Traders have to explain the order GTC order is canceled before it expires. Generally, the entry orders, stop loss orders and take profit orders in online forex trading are all GTC orders.
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