Currency exchange- this is an element of the infrastructure, the activity of which is to provide services for the organization and conduct of trading, during which participants enter into transactions with. The currency exchange organizes the work of the basic elements of the infrastructure of the foreign exchange market: the trading system (search mechanism), clearing and settlement systems (transaction execution mechanism).
There are currency exchanges specializing in futures trading in currencies and financial assets - the London International Financial Futures Exchange, the European Options Exchange in Amsterdam (European Options Exchange), the German Derivatives Exchange in Frankfurt (Deutsche Terminboerse), the Singapore Exchange (Singapore International Monetary Exchange), Sydney Futures Exchange, Austrian Futures Exchange in Vienna (Oesterreichische Termin Option-sboerse), Russian, now called. From an economic point of view, a currency exchange is an organized participant in the exchange organized currency market. In the legal sense, a currency exchange is a legal entity that forms a wholesale market by organizing and regulating exchange trading in foreign currency.
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Currency exchanges organize the exchange currency market. The foreign exchange market is a system of economic relations, which is the implementation of purchase and sale operations. foreign exchange(and in some cases - securities in foreign currency and futures contracts for foreign currency), as well as operations for the investment of foreign exchange capital. It is in the foreign exchange market that the interests of sellers and buyers of currency values are coordinated. A currency exchange is an element of the infrastructure of the foreign exchange market, whose activity is to provide services for the organization and conduct of trading, during which their participants enter into transactions with foreign currency On the currency exchange, free purchase and sale of national currencies is carried out based on the exchange rate between them (quotes), which is formed in the market under the influence of supply and demand. This type of exchange has all the elements of classical exchange trading. Quotation on foreign exchange markets depends on purchasing power exchangeable currencies, which in turn is determined by the economic situation in the issuing countries. Operations on currency exchanges are based on the convertibility of the currencies exchanged for them. Currency convertibility is the ability to exchange the monetary units of one country for the currency of other countries and for internationally recognized means of payment. There are freely convertible, partially convertible and non-convertible currencies. Freely convertible currencies can be exchanged for foreign money equivalents without any restrictions in all types of transactions; they can serve as reserve currencies (US dollar, Japanese yen, Swiss franc, British pound sterling, Canadian dollar, etc.). Partially convertible currencies are the currencies of countries that retain restrictions on certain foreign exchange transactions at home and abroad. Non-convertible (closed) currencies are the currencies of countries where prohibitions (or serious restrictions) are applied on operations for its exchange for other currencies. Convertibility mode national currency determined by law and established by the state. Countries that are members of the International Monetary Fund may change the convertibility regime of the national currency only in agreement with the Fund. The direct purpose of currency exchanges is to determine the exchange rate, which is the value of foreign currency. On the stock exchange as an organized market, the value of the national monetary unit. Transactions are also made here in the interests of persons who have funds in foreign currency received from foreign economic activity and for other reasons, and persons who, on the contrary, need foreign currency for their economic activity, but they do not have independent sources of its receipt. Transactions on the export and import of goods, services and results of intellectual activity form the basis for determining the value of the national currency. Thus, the main task of the currency exchange is not to obtain high profits, but to mobilize temporarily free foreign exchange resources, to redistribute them by market methods from one sector of the economy to another, and to establish the actual market rate of the national and foreign currencies in conditions of fair and legal trade. Functions of currency exchanges and operations carried out by themThe task of the exchange is to identify market prices for foreign currency. As part of this task, the exchange performs the following functions: Identification and regulation of exchange prices The exchange participates in the formation and regulation of prices for exchange goods. The concentration of supply and demand on the stock exchange, the conclusion of a large number of transactions largely exclude the influence of non-market factors on the price, making it as close as possible to real supply and demand. Education and price forecast The concentration of sellers and buyers on the exchange, the massive nature of exchange transactions and their scale due to the fact that transactions are concluded on large sums in foreign currencies, make the exchange rate the most representative market price for the currency. It, in turn, is taken into account when concluding transactions on the futures market. As a result, exchange prices for currencies perform the function of pricing. In addition, currency exchanges perform all or most of the following functions:
The currency exchange acts as an intermediary in the implementation of foreign exchange transactions. In some of the countries where there are currency exchanges, foreign exchange transactions are allowed only through them. Participants in exchange trading in currencies in most countries are credit organizations, less often - other financial organizations, such as insurance and pension funds, investment companies operating through brokerage firms. All currency transactions of trading participants are reflected on the accounts of exchanges, and in this case the exchange acts as a guarantor of settlements. The main operations carried out on the currency exchanges are: , spot (spot) and the purchase and sale of currencies. The period of formation of currency exchangesIn the 50-60s of the XX century, exchange currency institutions were organized in a number of Western European countries - in France, Germany, Belgium, Holland, Luxembourg and Scandinavian countries. At the same time, significant changes were made to the legislation regulating the activities of foreign exchange market participants, and state control over the market was strengthened. It is advisable to consider in more detail the structure of the organization and the functioning of the currency exchange using the example of Germany. The German Currency Exchange was organized in accordance with § 1 of the Exchange Regulations as an integral part of the Frankfurt Stock Exchange. Credit institutions admitted to trading on the stock exchange were granted the right to participate in currency trading only if they passed the registration procedure in the currency section. Simultaneously with the organization of the currency exchange in Frankfurt, similar exchange currency platforms were created in other German cities - Munich, Hamburg and Düsseldorf. All of them are included in the system of currency exchanges of the country. After the reunification of Germany, the Berlin Currency Exchange was added to their number. The creation of a network of regional platforms for organized currency trading made it possible to ensure participation in the auctions of banks and enterprises throughout the country. In addition, the advantage of exchange trading in currency was actually achieved equality of all bidders. It should be noted that orders for large and small amounts in exchange trading are satisfied at a single rate, while in interbank trading it is sometimes quite difficult to conclude transactions for small amounts at a favorable rate. The Frankfurt Currency Exchange became the head of the German currency exchange system. It was on it that, until the introduction of the euro in 1999, the official exchange rate of the German mark was set in relation to other leading world currencies. Every day from 13:00 CET, the Federal Bank, following the results of trading, announced the rate of the mark against 17 currencies, which was used by regulatory authorities to record balances and financial statistics. The organizational structure of each currency exchange was unified and consisted of two chambers: the brokerage chamber and the board. The task of the brokers was to quote the currencies traded and work as intermediaries between credit institutions (registration of transactions, supervision of their execution, etc.). In turn, the board was made responsible for compliance with the statutory requirements in the course of official quotations, while direct supervision was carried out by members of the currency trading committee. The system of currency exchanges was rather tightly controlled by government agencies. In particular, the exchange (senior) broker of the Frankfurt Stock Exchange was approved in his position by the government of Hesse. The Federal Government, represented by the Minister of Finance, in accordance with Section 1 Chapter 4 of the Stock Exchange Act, had the right to intervene in the work of the stock exchange in urgent cases, in agreement with the Minister of Economics and the Bundesbank. For example, if there was a threat of significant market instability due to external shocks or an internal crisis, it was possible to suspend trading for a certain time. In the countries of Southern Europe in the post-war period, a policy of strict regulation of the domestic foreign exchange market was also consistently pursued in order to prevent internal financial crises and minimize the consequences of adverse changes in the external economic situation. Greece had an organized interbank market in the 1980s for major convertible currencies (excluding the US dollar). A special daily session was held in this market, where the fixing rates were the official rates for the respective currencies. During the same period, the country had a rule on the obligatory sale of foreign exchange earnings from exports to commercial banks within 90 days from the date of its receipt. An organized foreign exchange market was created in the countries of Southeast Asia in order to strengthen state regulation of the economy in general and the circulation of foreign currency in particular. Thus, in the Philippines in the 1970s and 80s, the Banking Association of the Philippines operated, whose functions included setting the peso exchange rate against the world's leading currencies and supervising the conduct of currency purchase and sale transactions by banks. It should be noted that during that period, when concluding spot transactions, banks had to adhere to certain limits on fluctuations in the peso exchange rate. In the 1980s, the Association began to set the limits of fluctuations on a market basis. The Central Bank did not obey the rules of the Association, but carried out the purchase and sale of currency within the indicated limits of exchange rate fluctuations. Trading on the interbank market took place in the Foreign Exchange Trade Center, where the Central Bank acted as both a buyer and a seller of currency. During the period under review, there was a rule for the mandatory sale of export foreign exchange earnings within three days from the date of its receipt. The buyer of the currency was a commercial bank, which was an agent of the Central Bank. The Banking Association of the Philippines became the prototype for the creation of a modern electronic dealing system for currency trading in this country. Currency exchanges in the modern worldCountry features of the functioning of currency exchangesThe US abandonment of the gold standard and the system of fixed exchange rates led to sharp shocks in the world currency market in the 1970s and 80s. This adversely affected the economies of developing countries, which were forced to resort to increased state regulation of domestic foreign exchange markets. The stabilization of the national currency market in most developing countries was carried out in two directions: the creation of an informationally transparent market infrastructure, convenient for central banks to intervene in the course of trading in times of crisis, and the tightening of administrative control over foreign exchange transactions. When solving the first task, the currency regulation authorities in a number of countries took the path of organizing specialized currency exchanges or institutions with similar functions. The exchange foreign exchange market in such countries remains one of the key segments of the foreign exchange market due to its transparency, information openness, and also due to the fact that exchange rates based on the results of trading on foreign exchange exchanges and the volume of transactions on the market serve as a guideline for transactions in the interbank and futures currency markets. markets. The creation of an organized foreign exchange market was envisaged in the most different countries ah related to different regions and differing in terms of their economic development. From this point of view, the examples of Chile, Croatia, China, Costa Rica and the Philippines are interesting. But first, it is necessary to make a reservation: we are talking only about an organized market for spot transactions with foreign currency. Exchanges and other trading systems where urgent transactions with foreign currency are concluded are present in the vast majority of developed and developing countries with market economies, therefore a separate section will be devoted to this type of transactions with foreign currency. It should be noted that the technological revolution in the exchange business has led to the fact that the traditional idea of exchange trading as always localized in a certain place (exchange floor) no longer fully corresponds to reality. A currency exchange in the modern world can mean not only a specific premises, but also an electronic trading system, into which offers are entered using modern means of communication, where the conclusion of transactions is registered, and subsequently, based on the results of the transactions concluded, the obligations of the participants in the trade are determined. At the same time, it does not matter at what distance from the location of the exchange the person participating in the exchange trading is located. Such transformations, firstly, eliminated the previous restrictions on the number of trading participants, secondly, gave rise to competition between exchanges located not just in different regions, but in different states, and, thirdly, led to the need for significant investment in the development of modern exchange trading technologies . In the mentioned countries, the organizers of trade are not only traditional currency exchanges, where trading is localized in a specific place (Chile), but also electronic trading systems. The latter perform the functions of an exchange if they provide the participants in the transaction with the opportunity to contact each other and at the same time have certain regulatory or supervisory powers or introduce a membership institution for participation in trading (China, Costa Rica, Philippines, Chile). China does not allow foreign exchange transactions in the interbank unorganized market. In other states, an organized market coexists with an unorganized one. ChileIn the legislation of this country, there is no mention of the organizers of trading in the foreign exchange market, but in fact there is one: spot transactions with US dollars are made on the Santiago Stock Exchange, which is essentially a universal exchange. It organizes trading in several markets at once, and one of them is a market in which spot transactions are made in gold and silver and in US dollars, with settlements on the same day or the next. Interest in making deals with US dollars on the Santiago Stock Exchange is explained by the fact that, firstly, dollar investments create an opportunity for a high level of profitability, and, secondly, the dollar is a universal means of payment. Along with the traditional currency exchange in Chile, there is an electronic organizer of trading in the foreign exchange market - the Electronic Exchange of Chile (Bolsa Electronica de Chile). It was created in 1989 in the form of an electronic trading platform. The exchange holds regular trading sessions during which transactions are made with securities, precious metals and foreign currencies. Brokers can participate in trading from any remote workplace in Chile. There are currently 89 terminals in total. The automation of the trading process on the stock exchange is provided by the Electronic Trading System (SITREL). It guarantees real-time trading, provides participants with a wide range of services, access to which is simple and convenient, and supplies participants with all the necessary trading information. It is possible to link this system with other electronic trading systems. CroatiaIt refers to those countries whose legislation not only mentions the possibility of creating exchanges, but regulates in detail their legal status and procedures. According to Article 12 of the Law on the Currency System, Currency Operations and Gold Deals, a currency exchange can be established as an independent legal entity or as a subdivision of the stock exchange. The founders of the exchange can only be banks authorized to carry out foreign exchange transactions. Other persons are entitled to take part in the auction only with the permission of the National Bank. The Exchange carries out its activities in accordance with the charter and procedural rules. The procedure for making transactions with foreign currency on the exchange ensures greater transparency of the foreign exchange market - in accordance with Article 13 of the same Law, the foreign exchange exchange is obliged to transfer to the National Bank all information related to trading, within the time limits and in the manner established by the Bank of Croatia. One of the most important functions of the exchange according to the Law is the determination of the official exchange rate of the national currency. Article 18 of the Law stipulates that the stock exchange daily establishes and announces the buying and selling rates and the weighted average rate of the national currency in relation to the foreign currencies traded on it. In this case, the exchange is guided by the ratio of supply and demand, as well as the number of transactions made on it during the trading day. The rate announced by the exchange is official by virtue of a direct indication of the Law and does not require approval by the National Bank. Only in the case when the currency exchange is not established, the National Bank itself sets the official rate. The exchange rate is applied to transactions with foreign currency between authorized banks and residents, unless otherwise provided by the parties to the transaction. Banks authorized to carry out foreign exchange transactions are obliged to carry out transactions with residents at a rate within the corridor formed by the buying and selling rates announced by the currency exchange. In addition, the weighted average foreign exchange rate announced by the exchange is used: when calculating the claims and debt obligations of residents in the national currency for accounting and statistical purposes; when executing court decisions on the recovery in national currency of amounts denominated in foreign currency; when calculating customs and other tax payments related to the import of goods. The National Bank of Croatia is always obliged to carry out purchase and sale transactions of foreign currency only at the rate announced by the stock exchange, with the exception of special interventions aimed at maintaining the national currency rate. ChinaA new system of foreign exchange regulation in this country was introduced in 1994. At present, foreign currency purchase and sale transactions in the domestic market are made only through the China Foreign Exchange Trade System (hereinafter - CFETS) by banks that are its members. CFETS is an integrated nationwide interbank electronic foreign exchange trading system. Prior to its creation, the exchange rate was determined on the basis of exchange rates set by various swap centers. The formation of CFETS was caused by the elimination of the dual exchange rate and the transition to a single rate set on the basis of trading in the unified national market. All foreign exchange transactions in China can only be carried out within the framework of CFETS. The center of this system, located in Shanghai, is connected by electronic network with 36 regional centers. CFETS is vested with certain powers to oversee the course of trading. The Central Bank exercises control over trading in the system in order to implement the state monetary policy. In addition, the current oversight of CFETS activities is carried out by the State Administration of Foreign Exchange (SAFE). All financial institutions involved in foreign exchange transactions, including foreign banks, must obtain permission from the Ministry of International Trade and Cooperation to trade in CFETS, and then become a member of the system. Moreover, there are special restrictions for foreign banks. While Chinese banks have the right to buy and sell foreign exchange for their own account and on behalf of their clients, foreign banks can only sell or trade foreign exchange among themselves on behalf of their clients. Bidders get access to the system both from the nearest trading floor of CFETS, and from specialized workstations of bidders, equipped in the premises of customers. Applications up to 50 thousand US dollars have priority in the system, larger applications undergo additional verification procedures before they are executed. Spot transactions are made in the system with the US dollar, Japanese yen and Hong Kong dollar. CFETS provides clearing for both national and foreign currencies. Regional centers of the system carry out clearing at the local level. The information is then transmitted to the CFETS central terminal. The People's Bank of China announces the benchmark rate of the national currency against the US dollar, Hong Kong dollar and yen. It is based on the weighted average price of foreign currency transactions made during the previous trading day in СFETS. The centralization of currency trading on CFETS made it possible to maintain the yuan exchange rate at a stable level during the second half of the 1990s, even during the financial crisis of 1998, thus creating preconditions for the implementation of a policy of low interest rates in order to stimulate economic growth. PhilippinesForeign exchange trading is conducted through the Philippine Dealing System of Bankers Association of the Philippines (PDS), which was established in 1992 and is being developed by the Banking Association in conjunction with the Central Bank of the Philippines in order to liberalize and modernize the foreign exchange market. This is an electronic system where trading takes place in real time. The vast majority of peso-dollar transactions are conducted through PDS. The amount of foreign currency that can be sold without documents and prior permission is $10,000. On PDS, transactions are concluded with execution both on the same day and the next day. Trades are held among members of the Banking Association with the participation of the Central Bank of the Philippines. Banks make transactions both for their clients and in their own interests, for their commercial needs. When banks trade for their own account, they are bound by position limits set by the Central Bank (no more than 5% of their unencumbered capital to buy or $10 million (whichever is less) and 20% of it to sell ). Philippine banks can transact directly with each other or through foreign exchange brokers. Through a broker, member banks may use telephone or even another electronic system such as Reuters Dealing. In order to make a deal through brokers, two banks that are members of the PDS must confirm their deal through the PDS. PDS is served by the Telerate information system, which automatically collects information, which allows all member banks to easily track in real time the weighted average rate of the peso and the total volume of all transactions at any time of trading. Trading on PDS starts at 9.00 and ends at 16.00. In the PDS system, the exchange rate is determined based on the ratio of supply and demand in the market. Banks continuously issue two-channel quotes with the usual interbank bid and ask price spread of 0.005 pesos. The quoting bank undertakes to complete the transaction at the offered price, unless the price is changed or canceled prior to the transaction. At the same time, the banks that issue quotes remain anonymous. The peso against the dollar is the weighted average of all foreign exchange transactions made through the PDS during the previous business day. USD transactions are settled in PDS through the Philippine Domestic Dollar Transfer System (PDDTS). PDDTS is a local clearing and electronic communications system operated by the Banking Association of the Philippines and other organizations. The system makes it possible to carry out periodic netting of obligations and claims (netting) both in real time and at the end of the trading day. In this case, the final settlements are made on the same day. PDDTS is arguably the most complex internal funds transfer system in the world due to the speed of transactions and flexibility in terms of delivery and settlement. Electronic currency exchanges in developed countriesElectronic trading systems, similar to those that exist in China, Costa Rica, Chile and the Philippines, have been successfully operating in developed countries since the late 1990s. Their difference from the exchanges of developing countries is a larger market coverage - while the headquarters of the exchange in most cases is based in a particular city, financial institutions located in various cities of the world participate in the exchange trading. Thus, a modern electronic exchange acts as a "link" between a huge number of residents from different countries who want to buy or sell foreign currency. The obvious advantages of such electronic exchanges include:
Currenex (Carrinex), Atriax (Atriax) and FX Alliance - FXall (Forexall) belong to the most famous and largest electronic exchange markets for foreign exchange in developed countries. Currenex is the first independent and open financial exchange that connects buyers and sellers of foreign currencies around the world. It was established in 1999 in California and now has offices in Chicago, New York, London and Singapore. Only persons who have received membership on this exchange are eligible to participate in trading through Currenex. Currenex members include banks, corporate treasury departments, corporate finance managers, government departments, international organizations and central banks. Current members of Currenex include powerful corporations such as Autodesk, Compaq, Ericsson, Intel Corporation and some 40 of the world's leading market maker banks, including ABN Amro, Barclays Capital and Merrill Lynch. Currenex provides trading participants with a full range of electronic services called Straight Through Processing (STP), which means the complete automation of the trading process - from the placement of an order by the client to its execution and all settlements. Currenex provides its members with news, foreign exchange market information, research and analysis information so that they have the full range of information to develop the best strategy and adjust plans. In addition, the system allows participants to request and immediately receive quotes for spot and forward and swap transactions from a single data bank. Currenex trades around the clock in real time, providing their participants with constant access to the foreign exchange market with a daily turnover of more than 1.5 trillion. dollars. Due to the huge number of Currenex members, the exchange charges a fee for the services it provides. This fee consists of a monthly membership fee and a transaction fee. The responsibility of Currenex includes, among other things, ensuring the confidentiality of information about the participants and the transactions they make. Atriax is the youngest of the world's leading electronic exchanges. It was established in the UK in June 2001 and is based in London. As such, it is subject to the UK Financial Services Act 1986 and is subject to the oversight of the Financial Services Regulatory Authority. Atriax is an independent company whose largest shareholders are corporations such as Citibank, Deutsche Bank, JP Morgan and Reuters. To participate in trading on this exchange, you must go through the registration procedure. Exchange members can be corporations, financial institutions and banks from all over the world (individuals are not allowed to trade). Unlike Currenex, which allows you to trade any currency in the world, 43 currencies are traded on Atriax. Bidders can get quotes of the currency they are interested in in relation to any other foreign currency traded on the stock exchange. Atriax deals with spot foreign exchange transactions, as well as forward and swap transactions. The exchange plans to provide the possibility of concluding forward-forward transactions, settlement forwards and foreign exchange transactions. Atriax also provides its members with a range of Straight Through Processing services, ie. full automation of the trading process. Confidentiality of information is perhaps the most important priority of the exchange. The exchange divides bidders into price makers - participants who determine prices in the foreign exchange market, and price takers (price takers) - participants who accept prices offered by price makers. About 60 price makers are constantly present at Atriax, including such powerful participants in the foreign exchange market as Citibank, Deutsche Bank and JPMorgan. FXall is an electronic organizer of trades in the foreign exchange market, which began its work in May 2001 with the launch of a fully automated trading portal. This exchange has several offices - in New York, London, Tokyo - and a representative office in Hong Kong. FXall services can be used by corporate treasury departments, corporate finance managers, hedge funds, central banks and other institutional clients. In order to participate in trading on FXall, these organizations must enter into an appropriate agreement with the members of the exchange - its market makers. Members of the exchange can make both spot transactions with foreign currency and forward, option trades and swap transactions. In addition, the exchange offers a service such as "portfolio trading" - making several transactions with different currency pairs and value dates. Through the electronic trading system, clients have the opportunity to request foreign currency quotes simultaneously from several banks, having received a clear picture of the situation on the market. The exchange has created a security system comparable in reliability to the systems used by the largest financial corporations in the world. It includes an access authorization procedure, as well as various control and identification procedures. This system guarantees the protection of all information about transactions and their participants. Sources of information
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Trading on the Moscow Exchange takes place on various markets. One of the key markets is the foreign exchange market, where private traders - clients of brokerage companies - can, on a par with banks and other financial organizations, make not only speculative trading, but also conversion transactions with currency (buy and sell foreign currency with the possibility of its actual withdrawal to bank accounts). ).
It is based on the results of trading on the currency market of the Moscow Exchange that the Bank of Russia calculates the official rates of major currencies, which it publishes on its website. The currency market of the Moscow Exchange is the center of liquidity for trading in foreign currencies. It is here that the Bank of Russia conducts interventions and implements monetary policy, which makes the foreign exchange market extremely important for the country's economy. The average daily turnover on it exceeds 1 trillion rubles.
History of the foreign exchange market
Exchange trading in currency in Russia originates from the formation of the MICEX exchange - the Moscow Interbank Currency Exchange. It was intended to replace the State Bank's currency exchange, where Vnesheconombank's currency auctions were held. So the exchange history of Russia in the post-Soviet time period originates precisely from currency trading. Moreover, the Central Bank already in those years used the results of trading on the MICEX foreign exchange market to determine official rates. Further, the MICEX exchange begins to develop actively, already in 1993, trading in GKOs (government short-term bonds) begins on it, which makes the MICEX a universal exchange on which a whole list of various assets is traded.
In 1995, the RTS (Russian Trading System) exchange appears, on which large blocks of shares of Russian companies are traded for US dollars. In 1997, the MICEX foreign exchange market implemented currency trading using the electronic lot trading system (SELT). Also on the MICEX begin trading in shares of Russian companies and corporate bonds.
In 2001, FORTS (and RTS) was launched on the RTS exchange, on which the most liquid asset of this market is traded today - a futures contract for the US dollar (Si). It is non-deliverable (only the ruble cash difference is transferred through it), and trading on the foreign exchange market is accompanied by real deliveries (but it is also possible to simply extract the financial difference).
In the 2000s, the stock exchanges of the world and Europe began to actively consolidate, Russian stock exchanges were no exception. So, on November 19, 2011, the MICEX and RTS exchanges begin the merger process, during which it is formed, which inherited trading on the foreign exchange market from the MICEX. And from February 13, 2012, the Moscow Exchange opens access to currency trading for banks and brokerage companies. It is from this stage that individuals get the opportunity to make transactions with the currency on a par with banks and take part in the formation of exchange rates.
Today, more than 500 professional participants trade on the foreign exchange market - these are mainly banks (over 400), as well as non-credit organizations, including the largest brokerage companies. Moreover, on the website of the Moscow Exchange there is information about who is a participant in trading on the foreign exchange market. Thus, if you decide to trade currency on the former MICEX and are looking for a reliable broker, then check out the list of companies admitted to trading in advance.
Organization of trading in the foreign exchange market
Today, the foreign exchange market trades currencies such as the Swiss franc (CHF/RUB), Chinese yuan (CNY/RUB), euro (EURRUB), British pound sterling (GBP/RUB), Hong Kong dollar (HKD/RUB) and US dollar (USD/RUB). Naturally, these currencies can be both bought and sold for the domestic currency. Moreover, trading in these currencies is implemented in several modes: TOD (today - with delivery "today"), TOM (tomorrow - with delivery "tomorrow"), TODTOM (the so-called SWAP transactions or transfer transactions - a combination of two opposite conversion transactions for the same amount with different value dates), SPT (spot - trading mode with delivery on the second day). For the US dollar, trading in the form of a discrete auction (USDRUB_DIS) is available.
Despite the fact that there is a large proportion of banks in foreign exchange trading that make transactions with foreign currency in their own interests, the minimum lot for instruments in the TOM, TOD, SPT and DIS modes is a very democratic 1000 conventional units (c.u.), and for swaps ( TODTOM) - $100,000 At the same time, the minimum price step for trading CHF, EUR, GBP and USD in TOD, TOM and SPT modes is 0.0025, which is much lower than bank spreads for making similar transactions, and for transactions in TODTOM mode - 0.0001. For CNY trading and HKD in TOD, TOM, SPT modes, the minimum price step is 0.0001, and for TODTOM mode - 0.000001. Moreover, for liquid instruments, the spread often makes up the minimum price step, and the volumes of buy and sell orders are very high and are present at almost every price level.
The foreign exchange market is open from 10:00 to 23:50, which allows you to make transactions with currencies in a mode convenient for the trader. At the same time, currency trading in the TOM, TODTOM and SPT modes is held from 10:00 to 23:50. USD trading in TOD mode takes place from 10:00 to 17:15, EUR and GBP trading in a similar mode - from 10:00 to 15:00, and trading in currencies such as HKD, CNY and CHF in a mode with delivery "today" are held from 10:00 to 11:00. This allows you to choose the optimal calculation mode for the trader for each currency.
At the same time, not only conversion operations are possible on the foreign exchange market - no one forbids making transactions within the day or transferring them through the night and extracting speculative profit. At the same time, the fifth “shoulder” is available in foreign exchange trading, which allows you to speculate on exchange rates as efficiently as possible.
Output
The foreign exchange market is of great interest to and, as it allows you to earn on fluctuations in exchange rates and carry out conversion operations at a much more attractive rate than in a bank, and without the queues that often happen there.
Now I will list all the trading platforms that I work on:
Here are the platforms that themselves extract money from the exchange, you just need to set everything up correctly, be sure to follow the links that I gave, I wrote everything in detail there, and remember that everything can be tested on demo accounts without investing your money at all !!!
Video about platforms
Here is a video about the first two platforms, so that you have an idea how they work:
You can download courses on working with these platforms from my blog, I gave the link a little higher, I also have a lot of articles on this topic and a lot of video clips.
The third platform is generally intended for manual trading, it is called, follow the link, you can download it there, but it was also adapted for automatic receipt of money, so study it, it is interesting and profitable.
In these articles you will find video interviews of these traders, so be sure to go and have a look, I think anyone interested in a steady income will love it!
I want to mention that it also exists, or otherwise they are called experts or robots, the meaning is as follows, you download the adviser, install metatrader 4 in the trading terminal and it trades for you according to its strategy, it just needs to be configured correctly.
On this blog you can find advisers of different profitability, for example, an adviser, which is very risky, but an adviser is safer, but less profitable -.
Thus, we see that the modern foreign exchange market is quite difficult to understand (be sure to read -
In Russia, everyone hears such a word as forex, thanks to the aggressive advertising of this financial market. Many people begin to open accounts and make speculative transactions with currencies in this particular market. Therefore, in this article, I will try to reveal the basic concepts of the exchange and forex, as well as tell.
And so, what is the stock exchange and the forex market:
1.
The exchange is a legal entity, which through its infrastructure organizes trading in financial instruments, and is a centralized platform for various markets that are under state regulation.
Depending on the trading of various instruments, there are so-called: stock, currency, commodity, futures, options, as well as universal exchanges where different financial assets are traded simultaneously.
Mainly in Russia the exchange is called stock exchange (market).
Forex is global over-the-counter market interbank currency exchange at free prices, where there is limited or no state regulation. Forex is not a centralized platform. Operations are conducted through a system of institutions: central banks, commercial banks, investment banks, brokers and dealers, pension funds, insurance companies, transnational corporations.
Therefore, the expression trade on forex exchange, fundamentally not true.
In Russia there is 7 exchanges(licensed auction organizers):
OJSC Moscow Exchange MICEX-RTS;
-JSC "St. Petersburg Exchange";
-JSC "Moscow Energy Exchange";
- CJSC "St. Petersburg International Commodity and Raw Materials Exchange";
-CJSC "Saint Petersburg Currency Exchange";
-CJSC "St. Petersburg Stock Exchange";
- CJSC "National Commodity Exchange"
The largest of them, Moscow Exchange is Russia's largest exchange holding, formed in December 2011 as a result of the merger of exchange groups: MICEX (Moscow Interbank Currency Exchange) and RTS (Russian Trading System).
The Moscow Exchange provides trading services for shares, bonds, derivatives, currencies, money market instruments and commodities.
Moscow Exchange includes the following trading platforms:
Stock market - stocks and bonds are traded.
— Derivatives market — financial instruments such as futures and options on stocks, indices, currency pairs are traded.
-Foreign exchange market - transactions are carried out with foreign currency pairs dollar / ruble, euro / dollar, euro / ruble, Chinese yuan / ruble, as well as the Belarusian ruble, Ukrainian hryvnia and Kazakh tenge. Based on the trading platform of the foreign exchange market, gold and silver are also traded.
-Money market - REPO transactions are concluded with government securities, money market instruments.
In Russia the currency market of the Moscow Exchange and the forex market (forex) are different concepts, since forex is not an exchange and is not an exchange platform.
In an English-speaking environment, the word Forex commonly called currency market as well as currency trading.
In Russian, the term forex usually used in a narrower sense and is meant solely as speculative currency trading through commercial banks or dealing centers.
Forex in Russia:
In Russia at the moment there are no laws regulating the forex market. Dealing centers providing currency trading services are mainly registered in offshore zones and semi-legally extort money from the population, calling themselves exchange brokers and hiding behind the word forex. There are also brokers who cooperate with such dealing centers, and the latter act on behalf of these brokers and push their services to the gullible population.
In Russia, dealing centers do not bring your transactions to the real interbank forex market, that is, to foreign currency trading. They themselves set favorable prices for the exchange rate, that is, they trade against you and prevent you from trading for profit. Access to the real forex market can only be provided by a broker with a license. He will work with you for a commission if you have an account of at least several thousand dollars. Therefore, real forex in Russia is available to a limited number of people. By the link you can read an article about the real experience of trading on Forex of one of the traders through a dealing center: .
New law on the regulation of dealer activity in the Forex market.
On October 1, 2015, the law on the regulation of dealer activities in the Forex market came into force. From October 1, forex dealers will need to obtain a license and join a self-regulatory organization (SRO) by January 1, 2016, and the law also limits the amount of leverage provided to an investor (up to 50). Market participants say that this law not only legalize the market, but also lead to a change in its structure. Wait and see.
Differences between the exchange and forex:
1. The activity of the stock exchange is regulated by law, unlike the forex market.
2. Trading on the stock exchange is carried out through an intermediary - a broker. In the forex market, trading takes place mainly through dealing centers. If you make transactions with amounts ranging from hundreds to tens of thousands of dollars, then you will have to deal with a dealing center. Working with a forex broker will be the exception rather than the rule, since the broker provides access to trading on the “real”, “big” forex only for amounts starting from several thousand USD.
Dealing centers in the forex market, they make transactions with clients on their own behalf and at their own expense. The work of a dealing center is reminiscent of the work of a currency exchange office, which, at its discretion, puts up quotes for buying and selling currencies.
The broker makes transactions on behalf of clients and at the expense of clients, on the basis of a brokerage agreement. If you are dealing with a broker, he brings your order to the exchange market, where it finds a counter order and is executed. The broker is just an intermediary, he does not give you quotes and does not trade with you.
3. On the stock exchange, trading takes place between market participants (physical, legal entities). For making deals, they pay exchange and broker commission. In the forex market, trading takes place between the client and the dealing center. In this case, any loss of the client goes to the dealing center, and any customer win is a loss for the dealing center
4. The most famous Russian brokers are licensed to carry out brokerage activities. Most dealing centers in Russia do not have such a license.
5. In the forex market, there is no order book, no data on trading volume and open interest. Unlike the stock exchange, which provides this data.
6. The broker does not care whether you earn or lose, it is important for him to have a large number of completed transactions. The more transactions are made, the more commission he will receive. The dealing center, on the contrary, is interested in your losses, since the client's money remains with him.
Conclusions:
If you decide to seriously engage in trading financial instruments (stocks, futures, currencies) and make speculative transactions, you need to open trading accounts with a broker who, as an intermediary, provides access to trading on legal exchanges ( moscow exchange or foreign exchanges NYSE, NASDAQ, etc.). Currently, trading in forex in Russia is a waste of time and money. Perhaps in the future, something will change.
What is a currency and currency and stock exchange? How to act in the game on the online currency exchange? How to trade on the currency exchange online in real time?
Let's start the conversation with a little calculation. Have you ever heard of an "information currency" called "Bitcoin"? In November 2011, Bitcoin was worth $2. And the American dollar at the same time cost 30-31 rubles. Let's say you had 100,000 rubles. You exchanged them for dollars (received $3,333) and bought bitcoins (1666 pieces). Wait.
April 2017. A dollar costs 57 rubles. And bitcoin? "Information currency" is now more expensive than gold, one bitcoin costs $1230. You exchange again, get 1666*1230 = $2,049,180. Or, if in rubles, 116,803,260 rubles. Not bad?
In the article below, we will talk about the currency exchange. Why do you need this knowledge? In order not to miss in the future equally excellent opportunities to get rich. In addition to the dollar and bitcoin, there is, after all, the euro, yen, franc, pound and many other things.
Yes, I forgot to introduce myself. Aleksey Morozov, an expert on the Forex currency market, is in touch. So let's go!
It is already clear from the title that currencies of different states are sold and bought on the currency exchange. The synonym of the name is Forex. At first, it was created for the most convenient exchange of one currency for another, but gradually turned into a money machine for traders.
The total amount of money on the currency exchange is not exactly known, but, as studies show, four trillion dollars is recruited without problems. Everyone trades currencies: from ordinary amateur traders to large funds and Central Banks.
In addition to people and companies that trade, brokers operate on the currency exchange - intermediaries who execute trade orders. For their work, they take a small fee called a spread.
As for the spread, you probably heard in the news: "The Central Bank buys the dollar at 55 rubles, sells it at 57 rubles." The difference is the spread, the bank's income. You will find some clarifications about the spread in the article "".
The currency exchange operates 5 days a week, trading is conducted around the clock. Now more and more brokers open access to both currency trading and stock exchange instruments at the same time.
If you still don't know what is - be sure to read, because you will be confused. It happens that you read it and still do not understand it - then leave comments, I will be happy to advise.
The Forex market, unlike the stock market, is traded only on the Internet, there is no separate building for it in any country. True, there are currency sections on various exchanges, including the Moscow one, but this is only for convenience, prices are not formed there.
The advantage of the currency exchange is in the peculiarities of price fluctuations. If stocks take off and fall, then the currency moves relatively steadily, does not make sharp jumps (and if they do, the rate usually returns to previous levels).
Agree, if the dollar today cost 56 rubles, and tomorrow 156 - the economy would not survive.
Accordingly, exchange rates are easier to predict, collapses do not happen very often. But that doesn't mean they don't exist at all.
By the way, let's summarize the main differences in the table.
Differences between the foreign exchange market and the stock market:
Forex is attractive for beginners because of the opportunity to trade with leverage. What it is? Take a look at the material ”, there is a simple and understandable explanation.
Leverage allows you to buy $1,000 with only $10 in your account, and it's completely risk-free. You cannot use leverage when speculating in securities, and the instruments are usually expensive, especially in the US and European markets.
Example
One Facebook share costs about 8,000 rubles, Amazon - 50,000 rubles, Berkshire Hathaway (Warren Buffett's company) - generally about 14,000,000.
The securities of Russian companies are cheaper, they are convenient for a novice trader: the share price of Gazprom is only 123 rubles, Sberbank - 160, Aeroflot - 127.
The currency exchange serves not only traders. Let's take a look at other goals of her work.
2. What functions does the currency exchange perform - 4 main functions
If you give free rein to the "sharks" of trading, they will turn the market upside down in pursuit of profit.
This cannot be allowed, because the uncontrolled growth of the exchange rate or its decline will cause a distortion in the state's economy.
Function 1. Determination and regulation of exchange prices
So that the activity of speculators does not lead to a catastrophe, the prices of currencies are monitored by Central Banks. They make foreign exchange interventions (transactions for the purchase and sale of foreign currency) in order to influence the rate of their own. There are other price adjustment tools.
For a crowd of speculators who cannot manage market movements on their own, such “attention” of banks to the economy is only a plus. If the currency fluctuates within certain limits, this is a great opportunity to make good money by buying and selling from the "overbought" and "oversold" zones.
Sometimes the Central Bank refuses to fix the exchange rate. As a result, there are sharp jumps, on which the majority of traders lose money (and the minority - the largest players - earn).
This happened to the franc (Swiss currency) in January 2015. The well-predictable currency rushed up and rose by a third against the dollar, euro and other instruments. Then it gradually returned back, but stability was forever left in the past.
Function 2. Education and price forecast
Do you know what price is? Agreement between seller and buyer? The definition is correct, but not entirely beneficial for the trader. Absolutely everything depends on a correct understanding of the essence of price. You should be familiar with the article " "- look there if you missed it.
Prices do not arise by themselves, they are based on something. And the dynamics of fluctuations, the degree of predictability, and so on, depend on this “something”. The currency market takes into account absolutely everything: political and economic news, natural disasters, the mood of most traders, etc.
Speculators who have been trading for several years in a row can tell a lot about price changes: all currencies have their own characteristics. So, for example, the Japanese yen can “freeze” and fluctuate within certain limits for several months, and then shoot up / down and move on to a powerful movement with virtually no rollbacks.
But bitcoin from state economy does not depend, so he walks by leaps and bounds:
Function 3. Ensuring bidding
Brokers create comfortable conditions for traders, provide them with trading terminals for placing orders (orders) and market analysis. Therefore, the foreign exchange market does an excellent job with the third function.
Function 4. Selection of participants in exchange trading
Absolutely all people have the right to trade on the currency exchange, but only large players (the above-mentioned Central Banks, funds and other wealthy organizations) have the opportunity to influence market trends.
No one is allowed to start trading. However, amateurs, greedy or timid traders themselves fly out of the market in the course of "natural selection": they succumb to emotions and quickly drain money.
3. How to play the currency exchange online - 5 easy steps for beginner traders
If you are burning with the desire to start trading on the foreign exchange market, where to start moving towards success?
I’ll note right away that the path awaits you is thorny, do not expect easy victories.
Step 1. Choose a broker
If you do not choose an intermediary or entrust the money to an unscrupulous partner, you will definitely be left without capital. Fortunately, there are enough high-quality brokerage firms today, it is not difficult to choose a reliable intermediary.
Below you will find a list of several companies that have proven their reliability and promise to millions of people over the years.
Step 2. Opening an account
I think there will be no problems with opening an account. It's simple: register, deposit the amount (brokers have different minimum deposits) and proceed to the next step.
Step 3. Market Analysis
When the trading account is activated, it's time to move on to direct exchange trading. It is impossible to open deals relying on intuition. Trusting the sixth sense is allowed only when speculating in options (for this is guessing), although even there analysis is indispensable.
Usually brokers hold free seminars on technical and fundamental analysis. At least the company , which I recommend to you as the most reliable partner, offers a lot of free educational webinars on a variety of topics.
Step 4. We develop a strategy
There is no universal and forever profitable trading strategy and cannot be. There are different approaches to the consideration of market movements, they must be able to use.
“We develop a strategy” - that is, we check the market for profitable entry signals using graphical or indicator methods, candlestick patterns, patterns, etc. If a profitable signal is found, we build a trading plan - where to enter the market, where to take profit, at what level to get rid of the transaction if the assumption is not justified.
When the measurements are made, we evaluate the risk - how much money we will lose in the worst case (if the market goes against us and does not turn in the right direction). The risk should not exceed 2% of all money in the account. If the possible loss exceeds 2%, we do not open a position, no matter how profitable it may seem. Otherwise, sooner or later you will lose all your money, and you will not save your nerves.
Step 5. Start trading
To start trading means to click on one of two buttons: “Buy” - to buy a currency (based on its growth) or “Sell” - to sell (based on a decrease). Yes, before opening a position, a lot is indicated - exactly how many units of currency we buy or sell.
It is very important not to give in to emotions and not violate the trading plan, not to close even with a solid plus on the balance sheet.
If the profit is twice the loss, then one successful transaction with two unsuccessful ones will leave the deposit unchanged. What if the possible loss is twice the profit? You will inevitably go downhill.
4. The most famous brokerage companies - an overview of the TOP-3 popular
If you choose one of the three companies we offer as your broker, you will receive good (and often free) training, better trading conditions, reliability and quality assurance.
Learn, choose and decide.
Almost all my knowledge about the Forex currency market was obtained in the company . First, I watched webinars on the basic course from different authors (Alexey Kuznetsov, Eduard Sungatullin, Alexander Volverin), then I studied specific trading strategies: indicator analysis, patterns, Elliott waves (though I don’t trade on them).
Classes are divided into free (most), paid and conditionally paid. In the case of the latter, you need to replenish the account by a certain amount. The money does not go anywhere, the broker will withdraw it back as soon as necessary.
Most of the shareware seminars require a deposit of $100, the most luxurious courses - $1000 (for example, "Scalping with Marat Gazizov" or "A. Elder's system based on three screens"), but they are already for the pros.
Finam, like Alpari, is licensed Central Bank RF. The broker, in addition to trading on the foreign exchange market, offers traders to speculate in the securities of Russian and foreign companies.
To cooperate with Finam, you need large sums of money, if you don’t have any, it’s better to choose another broker. Education here is mostly paid, but in-depth and high quality.
3) BCS Broker
The company works similarly with currencies and securities. BCS Broker began its journey in 1995, and after five years it became a leader. If you do not want to trade yourself, there is an opportunity to invest in investment products with the condition of 100% capital protection.
I suggest watching a short video about the benefits of BCS.
For the most successful trading, BCS offers traders the services of a financial consultant who will help you not to make mistakes even in the most difficult market situations.
5. How to make money on the currency exchange - 6 simple tips for beginners
I have always thought that the advice below is empty talk. In the process of real trading, I realized how important they are after all.
When you start trading for real money, you will understand that the complexity is not in strategies, but in self-control.
I will never forget how I was drawn to move from a practice account to a real one. Especially when one after another there were profitable transactions. It seemed to me that I was missing out on huge profits by continuing to trade on the demo.
Then I read from Alexander Elder, the famous trader, best-selling author on stock trading:
The exchange is not going anywhere, months and years later, the prospects for it will even improve.
And I realized how true it is. Before moving on to trading with your own money, you have to go through a lot, analyze dubious trading signals, lose some money on gaps (“gaps” in prices before and after weekends when the market is closed), and so on.
Some traders say that you can only master stock trading on a real account. In some ways, they are probably right, because the emotions on the demo and in real life are very different, but the pilots do not immediately get into real planes.
Tip 2. Take a course on playing the currency exchange
It is advisable to undergo paid training at the broker's office in the "1 on 1" format. If this is not possible, study webinars, read books, form basic knowledge. Practice shows that attempts to independently develop the market take a lot of time.
Example
One day I was talking to a trader I know. He has a huge deposit, he receives about 10% profit per month (on average), risks 2-5% of the funds. I asked him how he came to his result and how much time he spent.
His response: “It took me six years to break even. Six! I will deposit money - for a year in salt, I will deposit again - again in salt. In the sixth year of trading, after all the transactions, my deposit decreased by only 1% - it was an achievement! From next year, I went into the plus.
I also asked who he studied with, what books he read. Answer: “I studied everything myself. Sitting in front of the monitor, drawing levels. Tried one strategy, another, a third. And what was my surprise when I realized that they did not work! I would have paid, of course, paid for the education, but there was no one.”
Sometimes you have to pay large sums of money for training, but it's worth it.
Tip 3. Start playing with small amounts
Deposit an amount into your account that you are not particularly afraid of losing and start trading. Once I watched a recording of a lesson at Alpari, where Eduard Sungatullin was asked a question about the minimum amount money for normal trading.
He said that it is generally recommended to start trading with $250. I remember his phrase: "Deposit money into the account and do not increase the deposit until you double it." That is, until you earn another $250, you cannot deposit money again.
In my opinion, the technique is very correct. With a risk of 2% of the deposit, you will have to trade long enough to double your deposited funds. You will gain tremendous experience.
The currency exchange is more technical than the stock market, meaning that prices tend to move in and out of trends even after a news shake-up.
However, if you trade on small timeframes, the news can eat up a lot of money, because there are sharp price jumps. To prepare for the release of the news, pull up protective orders, look at economic calendars.
Tip 5: Don't Focus on Losing Trades
Earlier, I repeatedly wrote about this amazing property of amateurs. The price goes against the trader, it would be high time to close the deal, but he is still delaying: “The market will turn around soon.” Very often, because of this view of things, the entire deposit is lost.
But it's even worse if the market does turn around. Then, as trader Anatoly Radchenko says, the amateur begins to consider himself just a professional stock game. In the future, most likely, he will merge more than one deposit.
Follow the Warren Buffett principle:
Chop your losses in the bud!
Set a protective order for each trade and don't move it. If the market goes against you, let the position close with minimal loss.
Tip 6. Don't make decisions based on emotions
Emotions must be turned off completely. Get rid of them. Let your cold mind control you. If you can't control your feelings, you will never become a trader.
The desire to quickly close a losing trade or take profits (“what if the market turns around, I won’t even get this money???”) will never make you a professional player.
6. Conclusion
Dear friends, we got acquainted with the currency exchange and determined which way you will go to profitable trading. If you have any questions - ask them in the comments.
Question for readers
If you want to start trading Forex, what questions are you most concerned about? Reliability of brokers, difficulty in choosing a strategy, doubts about the reality of making money on the foreign exchange market? Ask in the comments, I will help you get out of the difficulty.
How to play the stock market online - tips for beginner traders + step-by-step instruction how to start playing on the stock exchange for beginners
