1.2.1. Currencies and quotes
1.2.1.1.Kotirovka and spread
Quote - this is the value of one currency unit (the base), expressed in units of another currency (the quote). In marking traded currency pair (for example, USD / DEM) base currency is recorded first quoted - the second one. Quotation is composed of two digits. The first figure - We (Bid) - The price at which the client can sell the base currency, the second - ASK (Ask, or Offer) - price at which the customer can buy the base currency for quoted. The difference between these rates is called the spread (spread). The amount of spread depends on the pair of currencies, the amount of the transaction and the market. Minimal change in quotes is called a point or slang Traders - pips (Point, Pips). Miscellaneous tools (a pair of currencies) are traded, with varying accuracy, ie with different number of decimal places in the listing. Most currencies are quoted with an accuracy of 0.0001, some, such as the yen and its crosses - with an accuracy of 0.01. As senior figures quotes (Big Figure) change relatively slowly, quotation, usually given in abbreviated form: EUR60/65, which means, for example, EUR / USD 1 .2660/1.2665.
Sample
Quote USD / CHF 1.6630/35 means that the client can sell dollars at a price of 1.6630 Swiss francs for 1 USD; customer can buy dollars at a price of 1.6635 Swiss francs for 1 USD; spread is 5 points, the base currency - USD, quoted - CHF.
Quote GBP / USD 1.6310/15 means that the client can sell pounds at a cost of 1.6310 dollars for 1 GBP; customer can buy a pound at a price of 1.6315 dollars for 1 GBP; spread is 5 points, the base currency - GBP, quote - USD.
1.2.1.2. Direct and inverse quotation
Direct quotation - the amount of domestic currency per unit foreign.
Contact quotation - the amount of foreign currency per unit of national.
Using direct and inverse quotes historical justification. The main global reserve currency is the U.S. dollar, so for most of the quotations used by currency type USD / JPY, USD / CHF, t.e.dollar is the base currency. However, in listing the pound sterling (GBP / USD) a pound is the base currency and the dollar - quote. Similarly, quoted former British colonies currency: Australian dollar (AUD / USD) and the New Zealand dollar (NZD / USD). The European currency euro also quoted the U.S. dollar as the base (EUR / USD). It is necessary to know, as often in information systems to record a pair of currencies to reduce USD, ie USD / CHF denote as CHF, and GBP / USD mark as the GBP, EUR / USD mark as the EUR.
1.2.1.3. podeshevleniya Rates
uniformity in the quotes of different currencies is a certain inconvenience, especially for beginners. Thus, for the pound and the euro (direct quotation), the increase rate (motion graphics up) mean rise of these currencies and the dollar podeshevlenie. And to mark, franc, yen (reverse quote) an increase in the rate (motion graphics up) means podeshevlenie of these currencies and podorozhaniedollara. In general, up to schedule expensive base currency desheveet quoted.
To profit from the deal to buy cheaper (lower graphics) and sell the more expensive (better graphics), and the sequence of these actions is of no importance, ie You can first sell the above, then buy below. However, in most cases in practice, for the convenience of customers brokerage firms configure their software in such a way that the client committed the least possible mistakes: For example, if the rate goes up, then in such programs, in any case, the operation should be "BUY" - to buy . In the case of direct exchange operations are buying the base currency (for example, GBP / USD - buy pounds for dollars) and back - for example, for the Swiss franc, USD / CHF - buy dollars for Swiss francs. If the rate goes down, it all happens the other way around - in any case (only for software brokers are configured accordingly) carried out an operation "SELL" - to sell. For direct currency sales operations base rates (for example, GBP / USD - sells pounds for dollars) and back - for example, for the Swiss franc, USD / CHF, - sells dollars for Swiss francs.
1.2.1.4. Cross-training
Foreign exchange transactions on the FOREX market are not just the dollar. The exchange rate between the currencies of non-dollar cross-rate call. The greatest value and highest trading volumes have the following cross-rates: EUR / GBP, EUR / JPY, EUR / CHF, GBP / JPY, GBP / CHF, and others.
Cross rates can be calculated through the rates to the U.S. involved in these currencies. There are three options for calculating the cross rates, depending on the base or quote against the dollar is the currency components of the cross.
Example 1. CHFJPY = USDJPY / USDCHF
2. GBPCHF = GBPUSD / USDCHF
3. EURGBP = EURUSD / GBPUSD
1.2.1.5. Currency Codes
Symbol
Currency Code
Name Currency
Jargon
$
USD
U.S.
USA
Green back, Buck
DEM
German mark
EUR
Euro
JPY (YEN)
Japanese Yen
GBP (STG)
British Pound
Cable
CHF (SFR)
Swiss Franc
Swiss, Swissy
FRF
French franc
Paris
SEK
Swedish Krona
Stokie
A $
AUD
Australian Dollar
Aussie
C $
CAD
Canadian Dollar
NZD
New Zealand Dollar
Kiwi
XAU
Gold (Spot)
XAG
Silver (Spot)
1.2.2. The conclusion of transactions and a profit
1.2.2.1. Transactions
The conclusion of the transaction consists of several stages: request quotes, obtaining quotes, making the team, confirm the transaction. When asked, you need to specify a couple of interest rate (instrument) and the amount of the transaction. This should not be the broker to communicate about their intentions - buying or selling. After receiving the quotes you need to click Buy (buy) or Sell (sell) or Out (off, nothing). The decision to accept in advance, because the answer should be given within seconds - the prices on the market are constantly changing and may cancel the listing broker and suggest another. Then the broker will confirm the conclusion of the transaction, after which it can not be undone. On the Forex market made to conclude the transaction, indicating the amount of the base currency, with the usual amount of the transaction is 100 000 (a lot). However, sometimes allowed to work non-standard - specifying the amount in the quote currency, or to make a deal with "nekruglye" amount. For example, it allows Forexite when trading via the Internet.
1.2.2.2. Open position
Open position - a condition where the trader has bought or sold the currency, and its position had not yet closed. At this time it was exposed to, every second of exchange rate changes affect the state of its accounts. At that time, he can make a profit or loss from changes in exchange rates. If the trader has carried out the operation of purchase of currency, it said that he had a long position (Long - Long). If sold - a short position (Short-Short). The condition, when there are no open positions, traders are often called "square" or "I am in the park." This slangy expression originated from the word Square.
Sample
The opening position. If a deal Buy 100 000 GBP at the exchange rate of 1.6200 and, respectively, Sell 162 000 USD, then came a long position on the pound (or one can say for the GBP / USD) and the short position - on the dollar. Closing position. If we conclude a deal Sell 100 000 GBP, is thus the position would be closed. This will make a profit or loss, depending on the rate of closure.
1.2.2.3. The calculation of profit or loss
If you buy goods (a currency) at the same price, then sold it to another, then the gain or loss will be the difference between the sale price and the purchase price multiplied by the amount of the transaction. Profit or loss = sum of the transaction (Selling price-purchase price)
A few observations:
1. The result of calculations by this formula is reflected in the quote currency.
2. The deal in this formula must be expressed in base currency, the amount sold and bought the base currency should be equal.
3. If there is profit from operations, after payment is received a positive result if the loss - no.
4. The result does not depend on how the operation was carried out: first buy, then sell or vice versa.
Sample
Suppose the current quotation of EUR / USD 1.2650/55 and you play on the increase, ie prognoziruete that the euro will rise. You open the position of buying dollars to 1.2655. After a certain period of time, say, when the rate 1.2675, you decide to close the position. Profit or loss = 100 * 000 (1 .2675 - 1 .2655) = 200USD
1.2.1.1.Kotirovka and spread
Quote - this is the value of one currency unit (the base), expressed in units of another currency (the quote). In marking traded currency pair (for example, USD / DEM) base currency is recorded first quoted - the second one. Quotation is composed of two digits. The first figure - We (Bid) - The price at which the client can sell the base currency, the second - ASK (Ask, or Offer) - price at which the customer can buy the base currency for quoted. The difference between these rates is called the spread (spread). The amount of spread depends on the pair of currencies, the amount of the transaction and the market. Minimal change in quotes is called a point or slang Traders - pips (Point, Pips). Miscellaneous tools (a pair of currencies) are traded, with varying accuracy, ie with different number of decimal places in the listing. Most currencies are quoted with an accuracy of 0.0001, some, such as the yen and its crosses - with an accuracy of 0.01. As senior figures quotes (Big Figure) change relatively slowly, quotation, usually given in abbreviated form: EUR60/65, which means, for example, EUR / USD 1 .2660/1.2665.
Sample
Quote USD / CHF 1.6630/35 means that the client can sell dollars at a price of 1.6630 Swiss francs for 1 USD; customer can buy dollars at a price of 1.6635 Swiss francs for 1 USD; spread is 5 points, the base currency - USD, quoted - CHF.
Quote GBP / USD 1.6310/15 means that the client can sell pounds at a cost of 1.6310 dollars for 1 GBP; customer can buy a pound at a price of 1.6315 dollars for 1 GBP; spread is 5 points, the base currency - GBP, quote - USD.
1.2.1.2. Direct and inverse quotation
Direct quotation - the amount of domestic currency per unit foreign.
Contact quotation - the amount of foreign currency per unit of national.
Using direct and inverse quotes historical justification. The main global reserve currency is the U.S. dollar, so for most of the quotations used by currency type USD / JPY, USD / CHF, t.e.dollar is the base currency. However, in listing the pound sterling (GBP / USD) a pound is the base currency and the dollar - quote. Similarly, quoted former British colonies currency: Australian dollar (AUD / USD) and the New Zealand dollar (NZD / USD). The European currency euro also quoted the U.S. dollar as the base (EUR / USD). It is necessary to know, as often in information systems to record a pair of currencies to reduce USD, ie USD / CHF denote as CHF, and GBP / USD mark as the GBP, EUR / USD mark as the EUR.
1.2.1.3. podeshevleniya Rates
uniformity in the quotes of different currencies is a certain inconvenience, especially for beginners. Thus, for the pound and the euro (direct quotation), the increase rate (motion graphics up) mean rise of these currencies and the dollar podeshevlenie. And to mark, franc, yen (reverse quote) an increase in the rate (motion graphics up) means podeshevlenie of these currencies and podorozhaniedollara. In general, up to schedule expensive base currency desheveet quoted.
To profit from the deal to buy cheaper (lower graphics) and sell the more expensive (better graphics), and the sequence of these actions is of no importance, ie You can first sell the above, then buy below. However, in most cases in practice, for the convenience of customers brokerage firms configure their software in such a way that the client committed the least possible mistakes: For example, if the rate goes up, then in such programs, in any case, the operation should be "BUY" - to buy . In the case of direct exchange operations are buying the base currency (for example, GBP / USD - buy pounds for dollars) and back - for example, for the Swiss franc, USD / CHF - buy dollars for Swiss francs. If the rate goes down, it all happens the other way around - in any case (only for software brokers are configured accordingly) carried out an operation "SELL" - to sell. For direct currency sales operations base rates (for example, GBP / USD - sells pounds for dollars) and back - for example, for the Swiss franc, USD / CHF, - sells dollars for Swiss francs.1.2.1.4. Cross-training
Foreign exchange transactions on the FOREX market are not just the dollar. The exchange rate between the currencies of non-dollar cross-rate call. The greatest value and highest trading volumes have the following cross-rates: EUR / GBP, EUR / JPY, EUR / CHF, GBP / JPY, GBP / CHF, and others.
Cross rates can be calculated through the rates to the U.S. involved in these currencies. There are three options for calculating the cross rates, depending on the base or quote against the dollar is the currency components of the cross.
Example 1. CHFJPY = USDJPY / USDCHF
2. GBPCHF = GBPUSD / USDCHF
3. EURGBP = EURUSD / GBPUSD
1.2.1.5. Currency Codes
Symbol
Currency Code
Name Currency
Jargon
$
USD
U.S.
USA
Green back, Buck
DEM
German mark
EUR
Euro
JPY (YEN)
Japanese Yen
GBP (STG)
British Pound
Cable
CHF (SFR)
Swiss Franc
Swiss, Swissy
FRF
French franc
Paris
SEK
Swedish Krona
Stokie
A $
AUD
Australian Dollar
Aussie
C $
CAD
Canadian Dollar
NZD
New Zealand Dollar
Kiwi
XAU
Gold (Spot)
XAG
Silver (Spot)
1.2.2. The conclusion of transactions and a profit
1.2.2.1. Transactions
The conclusion of the transaction consists of several stages: request quotes, obtaining quotes, making the team, confirm the transaction. When asked, you need to specify a couple of interest rate (instrument) and the amount of the transaction. This should not be the broker to communicate about their intentions - buying or selling. After receiving the quotes you need to click Buy (buy) or Sell (sell) or Out (off, nothing). The decision to accept in advance, because the answer should be given within seconds - the prices on the market are constantly changing and may cancel the listing broker and suggest another. Then the broker will confirm the conclusion of the transaction, after which it can not be undone. On the Forex market made to conclude the transaction, indicating the amount of the base currency, with the usual amount of the transaction is 100 000 (a lot). However, sometimes allowed to work non-standard - specifying the amount in the quote currency, or to make a deal with "nekruglye" amount. For example, it allows Forexite when trading via the Internet.
1.2.2.2. Open position
Open position - a condition where the trader has bought or sold the currency, and its position had not yet closed. At this time it was exposed to, every second of exchange rate changes affect the state of its accounts. At that time, he can make a profit or loss from changes in exchange rates. If the trader has carried out the operation of purchase of currency, it said that he had a long position (Long - Long). If sold - a short position (Short-Short). The condition, when there are no open positions, traders are often called "square" or "I am in the park." This slangy expression originated from the word Square.
Sample
The opening position. If a deal Buy 100 000 GBP at the exchange rate of 1.6200 and, respectively, Sell 162 000 USD, then came a long position on the pound (or one can say for the GBP / USD) and the short position - on the dollar. Closing position. If we conclude a deal Sell 100 000 GBP, is thus the position would be closed. This will make a profit or loss, depending on the rate of closure.
1.2.2.3. The calculation of profit or loss
If you buy goods (a currency) at the same price, then sold it to another, then the gain or loss will be the difference between the sale price and the purchase price multiplied by the amount of the transaction. Profit or loss = sum of the transaction (Selling price-purchase price)
A few observations:
1. The result of calculations by this formula is reflected in the quote currency.
2. The deal in this formula must be expressed in base currency, the amount sold and bought the base currency should be equal.
3. If there is profit from operations, after payment is received a positive result if the loss - no.
4. The result does not depend on how the operation was carried out: first buy, then sell or vice versa.
Sample
Suppose the current quotation of EUR / USD 1.2650/55 and you play on the increase, ie prognoziruete that the euro will rise. You open the position of buying dollars to 1.2655. After a certain period of time, say, when the rate 1.2675, you decide to close the position. Profit or loss = 100 * 000 (1 .2675 - 1 .2655) = 200USD
CARLO, FOREXTRADER.RU
E-mail: trader_karlo@mail.ru
E-mail: trader_karlo@mail.ru
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