This type of trading is mainly used to make a profit when exchange rates change and has a clearly defined speculative focus, which allows you to earn pretty decent money.
Currency dealing – trading currencies on the world currency exchange forex or internal trading floors.
During the trading process, exchange rates are formed, which then form the basis for all settlements in international transactions. The exchange rate itself is formed in accordance with market laws, that is, based on supply and demand for a particular monetary unit.
Currency dealing participants – Dealing Centers , or as they are also called DCs, are intermediaries between ordinary traders and the currency exchange itself. Banks or specialized companies can act in their role.
Their main task is to transfer currency quotes to the trader’s trading terminal, and then execute his orders to open transactions on currency transactions.
Dealing centers receive the main profit in the form of a spread – the difference between the purchase and sale of monetary units.
Venue – in fact, currency dealing is not tied to a specific place, trading is carried out on electronic platforms that do not have their own address. That is, you can trade, with equal success, being in Russia or London.
Conventionally, trading is divided into trading sessions, but they concern more time based on time zones than its location.
Time – Forex trading is carried out almost 24 hours a day, except for weekends and holidays. In accordance with time zones, there is a clear division into trading sessions, this approach is associated with the work of financial structures in a particular region.
The main trading sessions are – Asian, European and American. Each of them has its own trading dynamics and preferred instruments depending on the demand for the currency.
Instruments – instruments that are used in the implementation of currency dealing are currency pairs that reflect currency quotes.
This entry allows you to characterize the current exchange rate of one currency in relation to another, for example, the entry – EUR / CHF 1.2020 indicates that 1.2 Swiss francs are given for one euro.
When making transactions, it is the base currency that is sold, which is always written first in any currency pair.
Transaction volumes have a clearly defined size, which is calculated in lots or their fractional parts, the standard lot on Forex is 100,000 units of the base currency.
The main objective of currency dealing is to make a profit as a result of changes in exchange rates, the profit is calculated in points (the last digit in the quote).
For example, 1 lot was bought in the EUR/USD currency pair at a price of 1, 2500, the transaction amount was 125,000 US dollars.
After some time, the price changed and the trade was closed at 1.2550 or $125,500 for a profit of $500.
At present, almost anyone can trade on the currency exchange, whether you just need to choose a dealing center and open a special trading account.
