In the previous materials, we acquainted you and . And now time in practice to test that such trade in the market Forex came. On InfoAdvisor.net you learn from this article, in what currencies it is possible to trade on Forex that such currency pairs what transactions happen, and, at last, learn the transactions mechanism.
In what currencies it is possible to trade on Forex
For a start I will tell that your deposit is usually expressed in US dollars. Here it is necessary to understand one important point: that your account is expressed in dollars, does not mean at all that you can make only such transactions where any currency is bought for dollars. As it is paradoxical, you can buy dollars for other currency of which you naturally do not have (after all the account – in dollars). For example, you can buy dollars for euro. Such transaction is carried out when expect falling of euro exchange rate in relation to dollar and called "to buy dollar against euro". Besides, you can make the transaction in which the dollar does not participate at all, for example, to buy Japanese Yen against Swiss franc. Anyway, the sum in dollars, equivalent to the cost of the carried-out transaction is charged off your account, and converting of currencies is made automatically at a current rate.
In the world currency market the greatest specific weight is occupied by such currencies as:
- US dollar – USD;
- euro – EUR;
- the British pound – GBP;
- Japanese Yen – JPY;
- Swiss franc – CHF.
The same currencies are the most popular at transactions in the market Forex. For convenience of work so-called "currency pairs" are used. For example, EURUSD – I think, you guessed that it is couple of euro dollar. Speak "to buy euro dollar", "to sell euro dollar". The most popular currency pairs are: EURUSD, GBPUSD, USDCHF, USDJPY.
Pay attention that in USDCHF, USDJPY vapors the dollar is on the first place, and in vapors EURUSD, GBPUSD – on the second. It is not casual. The matter is that at designation of a currency pair on the first place designation so-called "basic currency" is put. The dollar is basic currency in relation to the majority of currencies of the world, except for euro and English pound, these currencies are basic for dollar. The concept "basic currency" means that at designation of a course the quantity of the quoted currency which needs to be paid for unit of basic currency is specified.
Trade in the market Forex
Transaction at trade in the market Forex it is accepted to call "opening of a position". Therefore, instead of speaking "I bought euro", it is possible to speak "I opened a position on euro". Thus if the second currency is not specified, it is meant that it is about a currency pair of EURUSD, that is to euro is bought for US dollars. Depending on that you bought or sold currency against basic, positions are called "long" ("Long", "bull") and "short" ("Short", "bear"). So that in our case it will be absolutely correct to tell "I opened a long position on euro".
I will explain how there is a trade, on an example. Let's say we consider that euro will grow, that is the price chart "will spread" up. In this case we open a long position − we buy euro. If we expect decline of euro in relation to dollar, we sell euro, we open a short position.
A little bit in a different way trade in currencies for which basic currency is the American dollar looks. If we consider that the Swiss franc will grow in relation to the American dollar, the price chart, unlike a situation with euro, will go down. In this case, we open a short position on a currency pair of USDCHF. That it became absolutely clear, I will tell that for any currency pair, the rule will be fair: if the movement of the price chart is expected up, we buy (we open a long position) if the price chart planned the movement down, we sell (we open a short position).
Along with the concept "open" a position in trade in the market Forex exists also the opposite – "to close a position". It means to make the transaction the return that which we made when opening a position. If we bought euro for dollars, now we will sell euro besides for dollars; if we sold the British pound for dollars, now we will buy it for dollars. Thus to us into the account the proceeds from the transaction will be enlisted, whether and depending on that the transaction was successful, we will get profit or a loss.
Trade systems in the market Forex (Forex)
The different dealing centers can use different trade platforms (systems), but the most popular is the Meta Trader program. Thus other trade systems can not only differ in the interface, but also have a bit different ideology of work, terminology, etc. Therefore Forex we will consider all actions at transactions in the market on the example of trade Meta Trader system. The program has the multilingual interface, among available languages there is also a Russian. With its installation of problems, I think, will not be. At the first start the program will suggest to register the new trading account. Each dealing center has features of registration therefore answers to the possible questions arising at registration need to be looked for on the site of your dealing center.
The trade Meta Trader system has simple, I even would tell the "standard" interface.
You easily will be able independently to deal with its settings. For us it is now important to learn to open and close positions, in this program they still are called as "warrants".
The most most part of a window is occupied by the price chart. You can switch between different schedules, choosing currency necessary to you or type of the schedule. Opening of a position is made by means of the New Warrant button, or pressing of the F9 key on the keyboard. Thus the dialog box in which it is necessary to specify transaction parameters will open.
The Symbol parameter allows to choose a currency pair for the opened position.
Let's a little dwell upon the Volume parameter. The volume of the transaction is expressed in lots. Usually 1 lot is equal 1 000 000 units of the bought or sold currency though in the different dealing centers it can be a miscellaneous. During transaction we specify, how many currency lots we want to buy or sell. So, if it is specified 0,1, we make the transaction in 100 000 units of currency. For euro at a course, for example 1,3100 and a credit shoulder 1:100 for transaction it will be required 100 000: 100 * 1,3100 = 1310 US dollars.
It is still possible to leave the Stop Loss and Teyk-profit parameters without change. We will consider these concepts when we speak about management science the capital – attract management.
In the line "Comment" it is possible to write a note for himself.
Warrant type so far also we will leave invariable – "Immediate execution".
The Sell and Buy buttons in trade Meta Trader system are intended for opening of a short and long position respectively. We press one of them, some seconds we wait for the answer from the dealing center and – it is ready. The transaction took place.
After some time when the course changes in the party, favorable to us, it is possible to close a position. For this purpose we right-click on a line with information on the warrant and in the appeared menu we select the Close the Warrant item. Just the same window will open, as well as when opening the warrant, but on it the Close button will be available. We press it, besides we wait for some seconds, and our warrant is closed. In line the graphics is lower we see a condition of our account.
I will add to it that on the virtual account it is quite good to fulfill such, purely technical moments well to understand how positions open and closed. In it the main essence of trade in the international currency market also consists. How to automate we will tell in the following article.