Robots in forex services in the USA
About Banking Forex — What is called Banking Forex
The problem of choosing a broker for trading on Forex is faced by both beginners and experienced traders who want to open an additional account with another company or change a broker. The current trend in the development of the Forex services industry in the Forex market follows two paths: the usual scheme for working through a dealing center and the increasingly popular Banking Forex. Work through the bank, until recently, was available only to customers with large deposits. But now Banking Forex has become available to everyone. Below will be offered a classification of companies that provide Banking Forex services and their comparative analysis.
So what is Banking Forex? No source gives a clear definition. Someone thinks that “Banking Forex” is exclusively trading on Forex through a bank registered in Russia. Some companies also call “Banking Forex” services offered by a Russian bank through a partner company, usually a non-resident affiliated with a specific bank, with the withdrawal of all transactions on the interbank market.
In our opinion, the key point that distinguishes Banking Forex from the dealing center is the direct transfer of transactions to the interbank market through its own liquidity aggregator. Thus, the following definition can be given: Banking Forex is the services of a bank or a company operating under a bank's brand in the Forex market with the conclusion of transactions in the interbank market.
Banking Forex is a service of a bank or a company operating under a bank brand in the Forex market with the conclusion of transactions in the interbank market.
Definition of Banking Forex on Wikipedia
The main advantage of banks is that they are the main market participants. In fact, the Forex market is an interbank market. It is the banks that interact with each other, realizing both their own and client requests, thereby creating demand and supply for currency. It often happens that the dealing center, offering clients access to the foreign exchange market, simply works as an intermediary and trades through a bank. Banking Forex allows the client to work directly with the bank, or through a company affiliated with the bank, which entails the best conditions for the execution of orders and the best prices for the trader.
In the business of providing individuals with forex services there are a number of key points. The main one is the execution of orders of traders (clients of a particular broker) or “dealing”. Below is one of the options of bank dealing for the retail segment of clients trading in the Forex market. Dealing, first of all, is based on the principle of hedging all clients' transactions on counterparties. Briefly, this can be represented in the form of the following scheme:
Step-by-step process of trading in the Banking Forex is as follows:
Forex Aggregation Server receives quotes from counterparties (among them: UBS, Morgan Stanley, Nomura, HotSpot and a number of other major market players). market).
Sends received quotes to customers in MetaTrader. Some companies at this stage of the price received from UBS, add your markup (expanding the spread to generate their income).
A client makes a transaction: BUY 1 lot EURUSD in MetaTrader at the price that he sees on the screen.
MetaTrader through Forex Aggregation Server sends a request, for example, to HotSpot to make a BUY transaction 100,000 EURUSD.
The liquidity provider (in the example above, this is HotSpot, but it can be any other) makes a deal for a given volume for a given instrument.
Forex Aggregation Server provides confirmation of a transaction to a client in MetaTrader.
Advantages and disadvantages of Forex
Forex charts, advantages With every day, the Forex market is gaining more and more popularity, for example, on the Internet in 2013, the number of requests for the phrase “Forex charts” is already more than 5,500, which is almost 2 times more than in 2012. Many traders refuse traditional futures and stock markets in favor of forex. What attracts Forex private traders? Consider the main advantages and disadvantages of this market.
The content of the article
1. Relatively low entry barriers. For example, according to the requirements of the SEC, a trader for intraday trading in the stock market must keep at least $ 2,500,000 on his account. For access to the futures markets, brokers require the trader to have margin support and maintain a minimum amount of several thousand dollars on the account.
In this regard, the Forex market stands out very well. Usually, forex brokers offer minillots with a credit lever of 1: 500, which allow making deals of $ 1,000,000, having only $ 2,000 on their trading account. Some brokers allow traders to trade micro lots, while the account is enough to have only a few dollars. A quick response to market changes will help Forex graphics online.
All accounts can be replenished using credit cards or electronic payment systems, and in one day you can open an account and start trading. Thus, in the Forex market anyone can trade, no matter how much he has.
2. The ability to actively trade around the clock. In the Forex market at any time you can find active currency pairs for trading. Forex is open 24 hours a day, 5 days a week. For many traders, trading on Forex is a way of earning extra money, so people who work full time have the opportunity to enter into transactions on Forex after or before their main job. You can also monitor price movements around the market around the clock using Forex charts.
3. Free quotes and software. Unlike futures and stocks markets, where traders have to pay for their software for technical analysis and receipt of quotes, and some traders even pay a monthly fee for the trading platform. Almost all Forex brokers provide traders with excellent platforms for concluding trade deals, as well as Forex charts that reflect the latest news and market analysis.
4. The almost complete absence of fees. At Forex, traders pay a bid / ask spread to enter the market. Spread is the difference between buying and selling currencies, which can be determined by analyzing Forex charts. It should be noted that this spread may represent significant transaction costs, but in general it is the only fee for broker services.
Quite often, one can hear about the liquidity of the interbank market and its large size as the main advantage. All these factors are suitable for the institutional side of business, but are not particularly relevant for private traders. Anyone can learn the quotes of the interbank market by analyzing Forex charts online. In general, it should be borne in mind that private traders trade on Forex through retail brokers, while all transactions are recorded on broker servers and most of them are not displayed on the interbank market, but overlapped within the company.
1. Forex has no central regulation. There is no clearing center or centralized market at Forex. Private forex brokers are now and again accused of various types of fraud and fraud against their clients. And the most innocuous are the charges in the artificial movement of prices with the purpose of activating stop orders, which allow, using Forex charts, to close the transaction without the participation of the trader. These stop orders enrich brokers. As a rule, the way to avoid dishonest actions is to select well-known brokers with good capitalization.
The function of managing currency reserves at the moment belongs to central banks, on their websites it is possible, analyzing Forex charts, to get acquainted with the directions of currency movement. It should be noted that recently there has been talk about the formation of a centralized Forex market for 2 years, this should stop any deceptions from brokers.
2. Quite wide bid / ask spreads. Quite a few brokers on the main currency pairs have spreads of about 3 points. This suggests that when trading a standard lot of $ 100,000, a trader must pay $ 30. Therefore, when entering the market, traders immediately receive minus 3 points. At the same time, the market should shift by as much as 4 points in the necessary direction only for the trader to earn $ 10 on this deal.
Analyzing Forex charts, it is clear that this is a very big minus for an intraday trader. Of course, on fluctuations due to large profits, a trader will be able to easily cover the spread, but in any case this is the main obstacle for successful short-term trading in Forex. True, this has not been a significant disadvantage lately, since individual forex brokers offer relatively narrow spreads.
3. Negative swaps. Depending on currency pairs, swaps can be both positive and negative. At the same time, traders, using various Forex charts, in order to maintain a trading position, are forced to pay a daily percentage. For individual currency pairs, interest can be paid to a trader, but most brokers do not allow traders to take advantage of this opportunity, especially on micro accounts. Negative swaps are a major disadvantage of swing trading, so it is important to familiarize yourself with your broker’s policy regarding position transfer. So, given the possibility of a negative swap, it is imperative that you regularly study Forex charts to make sure that there is a trend in the right direction.
Here are the main advantages and disadvantages of Forex trading. But even despite its obvious shortcomings, many people prefer to trade here. Research and practice are the best ways to counter any shortcomings.
Banking Forex or dealing center? Overview from Larson Holz Ltd
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As you know, at the moment there are two popular schemes of work on Forex. Through banks and through offshore dealing centers. In this article, Larson Holz Ltd examines and analyzes both options in detail.
larson_holz.gifBankovskiy Forex in Russia and abroad.
Players in the Forex market, as well as players on the stock exchange are constantly faced with the need to choose a reliable and suitable broker for many conditions. That is, the organization that would give them the opportunity to enter the stock exchange. Numerous dealing centers are full of super-profitable offers of their services. In these “reasons for choosing our organization” it is easy to get lost and not see a forest behind the trees.
The fact is that there are fundamental differences between the three classes of brokers providing their services for access to the Forex market.
One type of broker is the so-called dealing centers formed by offshore companies. For example, the company Larson Holz IT Ltd, with the help of the specialists of which this article was written, refers precisely to this class. Here you enter into an agreement, as a rule, with a foreign organization whose work is not controlled by Russian legislation, since The company is non-resident and legally conducts business either at the place of registration or at the location of the clearing server. And in Russia, a dealing center, usually represented by a partner company (franchisee), which provides only information services (helps with paperwork, conducts paid thematic seminars, advises clients on current issues, etc.). According to Larson & Holz Ltd, this scheme certainly has significant drawbacks, but it is widespread in practice and fits into the legal field of almost any state. According to Larson & Holz, specialists' assessments regarding the reliability of such brokers are divided - many quite reasonably assume that solving “problematic” issues with a foreign (especially offshore) company is very complex and the result is rather doubtful. However, this drawback becomes relevant only if there are unsolvable problems with the dealing center, for example, the client’s disagreement with the quotation of closing his deal and the broker’s unwillingness to find a compromise option. Then the client may have certain difficulties in defending their interests through the courts, since the defendant is a foreign organization. It must be said that such situations are extremely rare, so many professional stock market players prefer to work with foreign companies and consider them to be the most convenient for online trading on Forex.
Another type of broker is betting organizations. Under this scheme, the purchase and sale of a synthetic currency contract is treated as a betting transaction. You bet with the bookmaker on the change in prices. If you are right - the office transfers a certain amount to your account, if you are mistaken, it takes it. However, according to Larson & holz it Ltd, in Russia this scheme has now lost its relevance due to the new legislation in the field of gambling. But in the UK, this scheme is used now.
Finally, the third option is to work through a Russian or foreign bank.
"Although Larson and Holz IT Ltd is also a classic offshore dealing center, that is, alternatively viable for bank forex, but we will be objective. Now, reputable banks with a good reputation are considered the most reliable broker who have received a license from the central bank to perform conversion operations with currency, "- this recommendation is given in Larson & Holz Ltd.
The reasons are obvious. The reliability of banking work is strictly regulated by the Centro
bank and state legislation. Therefore, any manipulations on client accounts do not pass - this is too great a risk for a bank ... When cooperating with a bank, a personal account is opened for the client, therefore, his money is in his own account and the chance of their accidental loss is not very large. Well, if difficult situations arise, the interests of the client are protected by the legislation of the Russian Federation. Usually, banks force their dealers to conduct foreign exchange operations through him. These funds act as a definite pledge for the bank. Unlike banks that have all licenses, there are no special laws for brokerage firms in Russia that regulate brokering activities related to the implementation of speculative actions on a margin basis with foreign currencies. Because of this, many brokerage companies are trying to offer "gray" schemes for opening accounts, transferring funds and not always a transparent system for making transactions. Dealing centers must either operate through banks or have access to Forex through foreign broker organizations. In these cases, dealing centers fulfill the role of intermediaries. Specialists Larson Holz Ltd believe that the participation of intermediaries does not always make sense. “Yes, dealing centers are very convenient for newbies, terms of trade, quotation mode, etc. they are greenhouse, but for serious customers, banking Forex would be preferable,” Larson & Holz Ltd. gives this tip about the applicability of the banking scheme. when performing operations in the foreign exchange market, it is that they are the main market participants, in fact, the foreign exchange market is the interbank market. It is the banks that interact with each other, realizing both their own and client requests, thereby creating demand and supply for currency. It often happens that the dealing center offering clients access to the real market simply works through any of the banks. Why do traders choose dealing centers so often? Larson & Holz IT Ltd identifies several reasons. Firstly, working with banks is far away. not all traders, as the required security deposit (funds necessary to start work) usually amounts to a much larger amount than when working through a DC. At the same time, the minimum amount of transactions that traders can implement ranges from 100,000 to 500,000 dollars! Banks typically provide a standard maximum leverage of 1: 100. If the client has $ 2,000, then he has the right to manipulate the amount of $ 200,000. Secondly, it takes more time and paperwork to conclude an agreement with the bank. In order to become a bank customer for conducting cash transactions in the foreign exchange market, it will be necessary to conclude an agreement on foreign exchange transactions, a bank account management agreement, provide identity documents and many other documents. The conclusion of an agreement on the part of the bank usually takes several days, since coordination is required at various bank structural units. Thirdly, for a bank, margin trading on Forex is not a core business for retail clients, therefore, very often customers suffer from a lack of technical attention. and attendants. For the pros, this may not matter, but for beginners, on the contrary, it is extremely necessary. DC and teach, and tell, and support the novice speculator in a difficult moment. Fourth, usually, the conditions for access to the Forex market through dealer organizations are more democratic and accessible. For example, a miniforex service is often offered when the minimum lot is 1/10 of the standard lot. In addition, dealing centers almost always have strict quotation rules, while banks have conditions that are close to “combat”, which means frequent spreading of news spreads, requoting, etc., which is absolutely normal, but can cause confusion for a beginner and drastically reduce efficiency of its work. In addition, DCs often have a very flexible marketing policy, which allows them to individually offer customers various service options, depending on their trading strategy. For example, Larson & Holz IT Ltd has such a program called Forex Family, other dealers also have similar ones. However, choosing a bank or DC, a personal business of a trader, says Larson & Holz IT Ltd. In any case, you can always change the service company, if you are not satisfied with the terms of service. But back to banking forex. At the moment, a retail client offers its services to several first-class banks at once. According to Larson & Holz Ltd., the leaders of banking forex banks that provide services in the Forex market in Russia are mainly Russian banks that are registered in the Russian Federation, have a foreign exchange license, are professional financial market participants and operate in accordance with the law. The most famous of them are MDM Bank, VTB 24, Alfa Bank, Nefteprombank and some others. It is interesting that Global Finance Magazine is in 20