Forex Capital market
It all began back in the years of the World War II when it was necessary to stabilize the world economy. And the most stable currency then was US Dollar. So the dollar was also pegged to the value of gold. As you know, an attempt was a successful one (It’s known as Bretton Woods Accord). And it brought some stability to the world economy.
Market Participants
The market participants can be divided:
- according to their effect on prices:
Market-maker
An organization that internally makes prices and that is ready to make a transaction if the other party does agree.
Market-user
An organization or a private individual who agrees to buy on the term that the market-maker offers.
- according to their goals:
Trader
A private individual who makes decisions regarding currency transactions.
Broker
An individual or an organization that backs traders in their affairs. Nowadays ForEx brokers offer traders services that are: currency rates information, uninterruptible work of means of connection.
Leverage
Brokers also provide leverage that give you an opportunity to operate the sums that are much more larger than you deposit. You can’t recycle this money. Leverage principles can be expressed through the notion of margin. Margin is the necessary percent from the sum of transaction. For example if the leverage is 1:100 then the margin is 1% and if the amount of transaction is $50,000 then the margin is $500.
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